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WPP eyes 20% growth in India despite Brexit turmoil
MUMBAI: Despite Brexit impacting global markets, WPP expects to post a 20% growth in India in the current financial year. This indicates that advertising expenditure in India will remain strong, at least for the top performers.
WPP is expecting its revenue to cross $600 million this year compared to $500 million last year, WPP group CEO Sir Martin Sorrell told The Economic Times in an interview.
Among the BRICS markets, Brazil and Russia will have a tough time while China is slowing. “India remains a stellar market for us,” Sorrell told the business daily.
For India to reach the top five WPP markets in terms of employee productivity and margins, it will take time.
“At the moment we have 15,000 people generating $600 million of revenue. In the top markets you find a smaller number of people generating the same and more. If I look at Germany for example, our third largest market, it’s $1.6 billion for 8,000 people. It’s a function of smaller size, labour intensity is greater. Also, Germany’s economy is double the size of India’s. Right now, India is the second most populous country in the world. Soon, it’ll be the most populous. India will be a fair way behind the US, so will China. But on an absolute GDP growth – China will be No. 1, the US second, and India – third,” Sorrell told ET.
Sorrell ruled out a global recession. The WPP chief, however, said that certain markets like Russia will go into recession. “Brazil has gone into a recession even before Brexit. Growth will slow a bit, but it’s already slowed to 3.5%. Inflation is virtually non-existent. There’s lack of pricing power, therefore more focus on cost. That makes it very difficult for our clients. Brexit is going to make it more difficult. Uncertainty is the enemy of growth,” he told ET.
Out of WPP’s top 10 markets, four are in Europe. They are Germany, France, Italy and Spain. “The UK may be coming out of Europe but we have to get further into Europe. We will escalate our activities in those markets. Horizontality, which is our key strategy, becomes more important,” Sorrell said.