Deloitte Sri Lanka hosts forum on cross-border growth for consumer sector

From top left: Silvermill Group Chief Financial Officer Cedric Wijegunawardene, Deloitte Sri Lanka and Maldives Partner – Head of Tax Charmaine Tillekeratne, IFC Sri Lanka and Maldives Country Management Unit Operations Officer Rukshila Gooneratne, and Deloitte South Asia Partner – M&A, Private Equity and Financial Services Tax Vivek Gupta, Deloitte Sri Lanka and Maldives Head of Strategy, Risk and Transactions Ruvini Fernando, Monitor Deloitte Partner Soumya Dwibedi, and Partner Tiyasa Khanra 

Deloitte Sri Lanka hosted an exclusive senior-leadership forum titled ‘Growth beyond Borders: Pathways for Sri Lanka’s Consumer Sector’ on 4 March at the Sapphire Hall, Courtyard by Marriott. 

It brought together leaders and decision-makers from Sri Lanka’s prominent consumer-sector companies to explore opportunities for regional expansion, particularly into India, one of the fastest-growing consumer markets in the world.

Deloitte Sri Lanka and Maldives Country Managing Partner Channa Manoharan highlighted the increasing urgency for Sri Lankan companies to look beyond domestic markets for growth. He also emphasised the need to have a deep understanding of on-ground realities, including tax and regulatory framework, and make meaningful collaborations to ensure success in foreign markets, either as exporters or via different forms of strategic partnerships.

Monitor Deloitte Partner Tiyasa Khanra in her keynote speech addressed three key questions: (1) Where Sri Lankan consumer brands can win cross-border; (2) Why India is an attractive market; and (3) What it would take to enter and win in new markets. She touched on key demographic and consumer trends and other benchmark indicators which are useful when assessing the potential of a new market. She also briefly profiled the fast-growing, scaled consumer economies in Asia (India, Bangladesh, and Vietnam, among others) which offer attractive growth rates and demographics. 

In her assessment of India as a potential market, she emphasised the country’s strong macroeconomic fundamentals and highlighted how India’s young population and expanding middle-income and working population will underline India’s consumption-led expansion. She also provided valuable insights on Indian consumers who are becoming increasingly brand conscious, with purchasing decisions shifting from purely price-driven to value-driven, signalling growing demand for trusted and differentiated brands. 

While noting the significant opportunities in the market, she also highlighted that India presents several complexities, including fragmented markets, a large unorganised retail sector, and intense competition. However, she observed that multinational consumer companies that remain invested in the market over the long term are often rewarded with stronger growth prospects and higher margins. 

The keynote address was followed by an insightful panel discussion moderated by Deloitte Sri Lanka and Maldives Head of Strategy, Risk and Transactions Ruvini Fernando. The distinguished panel featured Silvermill Group Chief Financial Officer Cedric Wijegunawardene, International Finance Corporation (IFC) Sri Lanka and Maldives Country Management Unit Operations Officer Rukshila Gooneratne, Deloitte South Asia Partner – M&A, Private Equity and Financial Services Tax Vivek Gupta, Monitor Deloitte Partner Soumya Dwibedi, Partner Tiyasa Khanra, and Deloitte Sri Lanka and Maldives Partner – Head of Tax Charmaine Tillekeratne.

The discussion opened with Wijegunawardene relating his experience having worked with multiple companies that have ventured overseas successfully. Referring to the Silvermill Group, whose revenue is primarily driven by exports, and which has established operations in Indonesia and India, he highlighted several key considerations when entering foreign markets. These include the need for patience in realising returns from cross-border ventures and the importance of conducting proper due diligence and feasibility assessments. He noted that such processes may be further strengthened by involving a multilateral lender depending on the size of the investment. 

He also emphasised that strict legal compliance, including environmental, social, financial, and labour regulations, is essential. 

Dwibedi provided deep insights on identifying the right market as well as the right partner – considering both macro and micro factors – to ensure winnability in the market. He also emphasised the importance of distinguishing between locations chosen for their consumer markets and those selected for manufacturing, as each involves different decision-making considerations. 

Gooneratne also offered insights on how the IFC, the private sector arm of the World Bank Group, provides growth capital and other non-financial support for companies to explore cross-border opportunities that have strong growth potential; and provided guidance on compliance and governance standards expected by global investors. The IFC, through its Sri Lanka office has invested close to $ 1 billion in Sri Lankan corporates over the past five years.

Deloitte’s tax experts Gupta and Tillekeratne emphasised the importance of conducting a detailed assessment of the regulatory requirements, including potential benefits from existing Free Trade Agreements (FTAs), when exploring new markets.

Questioned about setting up trading offices in hubs like Dubai and Singapore, Tillekeratne highlighted that whilst it is a feasible operational model, investors need to be cognizant of “substance over form” in the value chain. Adding on to this, Gupta further emphasised on the importance of considering risks relating to permanent establishments when setting up such trading entities.

The value of strong and reliable partners, data-driven and credible business plans, and the importance of playing the long game were sentiments echoed by all panellists throughout the discussion. The panellists also discussed the importance of strong environmental, social, and governance (ESG) standards which are essential to accessing foreign capital.

Deloitte in harnessing the collective expertise of its global network reaffirms its commitment to supporting companies through every phase of their international expansion journey – from strategy formulation and market assessment to regulatory navigation, identifying credible partners, tax planning, and on-ground execution for successful launch and scale up across key regional markets.