Sri Lanka’s consumer sector has demonstrated notable resilience and recovery in recent years.
The economy as a whole registered 5% real GDP growth in 2025, and it was observed that the consumer sector grew at an above-average rate, accelerating from 5% in 2024 to 7% in 2025, indicating a gradual improvement in consumption patterns and purchasing confidence.
However, domestic demand alone is unlikely to structurally sustain the next phase of long-term growth. For many businesses, the path forward lies beyond national borders.
In fact, when examining the export data for 2024, it is noted that the export of food, beverages, and tobacco recorded an exceptional growth of 20.8% and 37.5% in 2025.
Leading strategy consultants from Deloitte South Asia share their perspectives on why this is a pivotal moment for Sri Lankan companies to expand regionally and how such expansion can be approached.
In a conversation with Echelon, Ruvini Fernando, Head of Strategy, Risk & Transactions at Deloitte Sri Lanka and Maldives; Lasanga Abeysuriya, Commercial DD, Valuation & Modelling Leader at Deloitte Sri Lanka and Maldives; Tiyasa Khanra, Senior Director, Strategy & Business Design at Deloitte South Asia; and Soumya Dwibedi, Senior Director, Strategy & Business Design at Deloitte South Asia, discuss how Sri Lankan companies can approach regional expansion with clarity, discipline, and strategic intent.
Why is this an opportune time for Sri Lankan companies to explore regional markets?
Ruvini Fernando: Sri Lanka has made a strong recovery from its recent economic crisis, supported by consistent policy direction, particularly through ongoing structural reforms that are critical for sustained growth.
According to provisional estimates by the Department of Census and Statistics, Sri Lanka’s per capita GDP surpassed $5,000 in 2025. While this signals a positive trajectory, especially in moving towards premium segments, a domestic market of approximately 22 million people inherently limits long-term scale.
In contrast, South Asia, home to nearly 2 billion people, offers access to significantly larger and faster-growing consumer bases, including emerging premium segments.
Lasanga Abeysuriya: As an import-dependent economy, Sri Lanka must prioritise the creation of foreign revenue streams to build foreign exchange resilience.
Encouragingly, export diversification remains a key policy focus, reflected in the growing emphasis on trade agreements and regional blocs. However, research indicates that many developing economies still underutilise existing free trade agreements, highlighting an untapped opportunity for Sri Lankan businesses.
What options do companies have when expanding geographically, and what should they evaluate?
Tiyasa Khanra: A structured and disciplined approach is essential.
Companies should begin by evaluating three critical dimensions of target markets: potential, accessibility, and risk. This requires going beyond headline GDP figures to assess category-level demand, urbanisation patterns, per capita consumption, and cultural alignment.
Tiyasa Khanra, Senior Director, Strategy & Business Design at Deloitte South Asia
At the same time, practical considerations such as regulatory frameworks, tax regimes, logistics infrastructure, and ease of doing business can significantly influence success.
Examples of entry routes include strategic partnerships, export-led models, licensing or franchising arrangements, overseas subsidiaries, and acquisitions.
Each comes with its own set of trade-offs and fits certain categories better. Some allow faster entry with lower capital, while others provide greater control and long-term margin potential.
The right choice for each company depends on its long-term objectives, risk appetite, availability of capital, and the nature of the product or service offered in the market.
Soumya Dwibedi: The lens through which a market is evaluated may also differ depending on whether the objective is manufacturing, consumption, or both.
Notably, the rise of digital commerce and increasing access to Asia-centric supply chains have lowered entry barriers, enabling companies to test and scale in new markets with greater agility and reduced capital intensity.
Which regions currently present the most attractive opportunities?
Tiyasa: Within Asia, India stands out as a key anchor market, driven by its expanding middle class and rising affluence.
Bangladesh represents a strong adjacent opportunity, while Vietnam offers a strategic gateway into ASEAN markets.
These geographies present a compelling balance of scale, growth, and accessibility, provided companies adopt a disciplined and well-informed approach.
Beyond Asia, Africa presents promising long-term potential, underpinned by a young and growing population. However, market entry often requires partner-led models due to infrastructure and regulatory complexities.
Why is India often seen as a priority market, and what should companies keep in mind?
Soumya: India’s scale and growth trajectory are difficult to overlook. With a rapidly expanding middle class, rising incomes, and strong consumption patterns, it is fast becoming one of the largest consumer markets globally.
That said, success in India requires a nuanced approach. It is not a homogeneous market, but rather a collection of diverse micro-markets. Winning strategies are therefore rooted in regional customisation rather than standardisation.
Distribution is another critical success factor. While many companies initially leverage modern trade and e-commerce channels, sustainable scale often depends on deep penetration into traditional retail networks.
In this context, selecting a distribution partner with strong regional presence, relevant category experience, on-ground market intelligence, and financial stability can help accelerate effective market entry.
Importantly, companies should adopt a long-term perspective. Building brand equity and distribution networks takes time, but successful players often achieve margins that are competitive with, or exceed, global benchmarks.
How should companies decide on the best route to enter a new market?
Tiyasa: Entry strategy should be guided by four key considerations: ambition, level of control, investment capacity, and speed to scale.
For instance, companies seeking rapid market testing or early revenue validation with limited capital may pursue distributor-led exports, licensing arrangements, or marketplace models.
Those aiming for accelerated scale with local expertise may consider joint ventures. Where long-term growth and margin optimisation are priorities, establishing a wholly owned presence becomes more relevant.
In distribution-intensive categories, acquisitions can provide an immediate foothold, though they introduce integration complexities.
Ultimately, the most successful expansions are those that are carefully staged, focusing on specific corridors, clearly defined target segments, and well-structured execution plans spanning pricing, channels, and partnerships.
Taking an example from our work, we advised an Asian personal care brand on its India entry. Through detailed market assessment, forecasting, field research, and partner scan, we narrowed the entry model choice to either a joint venture or a wholly owned entity.
Given its long-term ambitions and need for control, the client set up a wholly owned presence where we supported them across marketing, sourcing, and sales and distribution over a year-long journey.
In another case, for an international bakery player, market assessment and analysis of their synergies indicated that acquisition was the most effective entry route. We supported target identification to enable scale and portfolio expansion in India.
For several other clients, particularly in the retail sector, we have advised entry through joint ventures and helped them in identifying the right partners.
What are the key challenges Sri Lankan companies face in cross-border expansion?
Ruvini: Access to capital remains a key constraint.
Foreign exchange controls imposed by the Central Bank of Sri Lanka limit outward investments by local companies, primarily to preserve national reserves. As a result, Sri Lankan companies will have to find external sources of capital to enable outward investment.
Ruvini Fernando, Head of Strategy, Risk & Transactions at Deloitte Sri Lanka and Maldives
Therefore, developing a robust business case, supported by strong governance frameworks and risk mitigation strategies, is critical to attracting multilateral agencies and external investors such as funds.
This requires robust and timely financial reporting, board governance that will give comfort to investors, protection of external investor interest, and strong compliance with regulatory frameworks, including ESG practices.
Lasanga: Insufficient understanding of on-ground market dynamics can significantly hinder success.
Companies must carefully assess regulatory environments, taxation, non-tariff barriers, and compliance requirements, alongside cultural nuances and competitive dynamics.
Distribution and logistics are equally critical, particularly in high-growth markets where fragmented retail networks dominate.
Partner selection also plays a pivotal role; while the right partner can accelerate entry, misalignment can result in costly delays.
How has Deloitte helped companies that are looking at cross-border transactions and expansions?
Soumya: Deloitte supports clients across the full transaction lifecycle, combining strategic insight with execution expertise.
This begins with market scanning and prioritisation, applying a structured framework to evaluate potential, accessibility, and risk.
Soumya Dwibedi, Senior Director, Strategy & Business Design at Deloitte South Asia
From there, teams work closely with clients to define portfolio and channel strategies, identify optimal entry routes, and develop actionable execution roadmaps.
This includes corridor selection, price-pack architecture, distributor and partner operating models, and broader capability development required to compete effectively.
Lasanga Abeysuriya, Commercial DD, Valuation & Modelling Leader at Deloitte Sri Lanka and Maldives
We also highlight key non-trade barriers, including regulatory requirements, licenses or permits, local sourcing norms, administrative constraints, and tax and import duties, as critical considerations in entry decisions.
A strong emphasis is placed on disciplined decision-making and local execution.
Rather than spreading resources thinly, the focus is on entering the right markets with the right model and scaling through targeted micro-market strategies supported by digitally enabled supply chains.
Tiyasa: Recent examples of how Monitor Deloitte has supported clients highlight its strong track record in enabling cross-border growth and market expansion across South Asia.
The team brings proven expertise in advising leading global companies, combining deep industry insights with practical market entry and growth strategies.
This includes designing and executing go-to-market strategies across sectors, with a focus on market entry, product positioning, and increasingly, digital-first distribution models.
In addition, Deloitte provides end-to-end support spanning partner identification, evaluation, and negotiation, ensuring seamless execution on the ground.
This is complemented by close collaboration across Deloitte member firms, enabling clients to leverage local market intelligence while driving coordinated regional expansion.
Core advisory capabilities, including long-term sales acceleration support, commercial diligence, financial assessment, tech solution implementation, and tax structuring, remain integral to these engagements, helping businesses navigate complexity while optimising value.
This breadth of experience is reflected in a diverse client portfolio that includes global and regional leaders, underscoring Deloitte’s ability to deliver impact at scale across diverse markets and industries.