Indian consumers' spending on FMCG items at modern retail stores is set to nearly triple to $5 billion by 2015 from $1.8 billion at present, according to market research firm, the Nielsen Company.
In what would be good news for organised retailers in the country, sales at modern trade stores have increased by 31% this year over last year.
"The Indian consumer is clearly enjoying the modern trade shopping experience and is increasingly shopping there, as is evident from the increased spending a modern trade stores," Nielsen India Executive Director Roosevelt D'Souza said in a statement.
This is also a strong indicator of the growth potential of the modern trade format, he added.
"While modern retail represents 5% of India's retail sales, Indian shoppers are expected to increase spending on fast moving consumer goods (FMCG) at modern retail stores from $1.8 billion (at present) to $5 billion by 2015," a study by the Nielsen Company said.
The report further said inflation is one of the key factors which is leading value conscious consumers to shop at the moderns stores, thereby driving up sales of private labels in the process.
"Inflation is also encouraging Indian shoppers to be more discerning with many seeking value through promotions, sales and private label brand purchases," it said.
According to the study, Indian shoppers spend over $100 million on private label items per year and is expected to increase to $500 million by 2015.
"Indian consumers have always been value conscious but now even more so, given inflationary pressure on the household budget," D'Souza said.
The access to both modern and traditional format coupled with an awareness of various deals being offered in the market, allows the consumer to make a more informed value for money shopping decision, he added.
Interestingly, compared to China, where the private label products contribute only 1% to the total modern trade sales, in India private label accounts for about 7% of the total sales, the report said.
According to the report, the top 5 categories in private labels in India are packaged rice, floor cleaners, tissue paper, glass cleaner and packaged 'atta'.
