 "Urban demand slows down for FMCG products as rural picks up steam")
Rural demand has overtaken urban demand in the quarter, but urban demand, which was driving fast-moving consumer goods sales, is now starting to witness a slowdown.
According to Kantar Worldpanel, rural has overtaken urban growth at the quarterly level quicker than expected.
“In fact, urban has considerably slowed down. It was growing at 5.6 per cent in the fourth quarter of calendar year (CY) 2023; however, that dropped to 4.7 per cent (January-March),” K Ramakrishnan, managing director, South Asia, Kantar Worldpanel, said.
In its outlook for the year, Ramakrishnan stated, “We expect growth to be muted for another quarter at least, led by urban slowdown. However, rural seems certainly on a path of revival, as can be noted, and if we see a solid performance from rural, it is likely to bring back growth towards the second half of the year.”
In non-food, personal care continues to grow at a faster clip at 4.8 per cent in January-March compared to 3.5 per cent in the corresponding quarter last year, and this comes on the back of shampoos, talcum powder, rubs and balms, and hair colour witnessing higher demand in the quarter.
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Household care also grew at a faster pace at 3.8 per cent in the January-March quarter of CY 2024, as compared to 3.4 per cent growth clocked in the October-December quarter of CY 2023 led by a return in the growth of surface cleaner categories; this is also twice the growth rate of 1.9 per cent the segment posted in the year-ago quarter.
Food and beverage remained largely stagnant sequentially, according to Kantar Worldpanel data. The segment growth stood at 5.6 per cent compared to 4.8 per cent in the same period last year as demand has slowed down in categories such as biscuits and noodles.
“They have grown at just 3 per cent and 2 per cent, respectively, in the first quarter CY 2024. The marathon that the snacking category has been on since the beginning of the pandemic is finally appearing to slow down,” Ramakrishnan said.