India’s FMCG market grew in September quarter as rural recovery continued
India’s fast-moving consumer goods (FMCG) market grew in the July-September quarter, while rural markets continued to recover in the quarter, according to data from NIQ (formerly known as NielsenIQ).
India’s FMCG industry has seen value growth of 9 percent, while volumes grew by 8.6 percent, indicating positive consumption patterns at an all-India level, the research house said.
Rural markets grew 6.4 percent in the quarter ending September, with both food and non-food categories also growing 8.7 percent.
NIQ also said volume growth in the quarter was 8 percent higher than last year.
“The FMCG sector has witnessed a further decline in price growth compared to the last quarter and has provided a necessary boost to consumer purchasing power. This is clearly visible in rural markets, where there is an increase in consumption across all categories. Overall, there has been a cooling of inflation in the country, fueled by base effects; a recent decline in unemployment rates and LPG prices, among others, have contributed to consumers’ willingness to spend,” said Satish Pillai, Managing Director, NIQ India.
Consumption is stimulated by an increase in the number of units sold in rural, traditional and modern trade.
“Unlike other APAC markets, where subdued growth is driven by price increases, the Indian story is about higher consumption. Continuing the gradual trend of the past few months, rural consumption is witnessing a positive trajectory,” said Roosevelt D’souza, Lead, Customer Success, NIQ India.
Consumers in rural areas are also opting for smaller packages, while average package sizes in urban markets are becoming positive. However, there is still a preference for larger packages.
“Rural markets are showing signs of recovery, with consumption picking up this quarter (Q3 2023) compared to Q3’22. Meanwhile, urban markets maintain a stable pace of consumption growth,” NIQ said in its report.
Modern trade saw strong double-digit growth of 19.5 percent, while traditional trade is also on the rise, with consumption improving to 7.5 percent over the period, up from 6.2 percent in the April-June quarter.
Growth in the food sector was driven by products that gained momentum, including categories such as salty snacks, chocolate and confectionery, and in addictive categories such as biscuits, tea and coffee, etc.
Small manufacturers are experiencing faster growth rates in the non-food categories compared to their large counterparts, while in the food sector, the big players are growing faster in volume than the small players.
Local brands have been able to capture market share as raw material prices are lower, making it easier for them to produce and sell FMCG products at lower prices.
Hindustan Unilever (HUL) and ITC both pointed out after announcing their September quarter results that regional brands have gained momentum.
According to HUL’s investor presentation, market value growth of regional players in the last three months compared to last year in tea was 1.4 times that of major brands in August and in detergents, regional brands grew six times faster over the same period.
The country’s largest consumer goods maker had already pointed out this problem in the quarter ended June, going on to say that regional tea players grew 1.6 times faster than national brands in the three months ended May compared to last year and three times faster in detergents compared to last year. to last year.
In terms of market share, the maker of Rin detergent continues to witness pressure from the mass side.