India only country to deliver double-digit sales growth of FMCG: Report

India is the only country in the Asia-Pacific region, where sales of FMCG and tech durable sectors from modern trade channels are consistently delivering double-digit growth, helped by premiumisation and festive period sales, data analytics firm NielsenIQ said in a report.

India has a dominant position in the Asia Pacific region in modern trade sales, where the premium-plus pricing segment accounts for nearly 40 per cent of FMCG sales and 30 per cent of tech durables sales, according to the findings of the report.

"India emerges as the only market consistently delivering double-digit growth in both the FMCG and tech & durables sectors, underscoring the resilience and evolving preferences of Indian consumers," said NielsenIQ report titled 'Full View of Modern Trade Retail Trends'.

 

Though online channels continue to grow rapidly in India, modern trade channels remain a preferred channel, it added.

Modern trade involves selling goods through large, organised stores like supermarkets, hypermarkets, department stores, and mini-markets.

The latest data reveals a 2 per cent growth in FMCG sales and 4 per cent in tech durables from modern trade channels on MAT (moving annual total) basis in March 2024.

"Despite inflationary pressures, modern trade has shown resilience, with double-digit volume growth continuing regardless of price fluctuations. Interestingly, there is a growing preference for products in premium-plus pricing, which accounts for approximately 40 per cent of FMCG sales and 30 per cent of tech durables sales, both experiencing significant growth," it said.

The report also added festive seasons and peak shopping periods remain key for both the FMCG and tech durables sectors.

These periods "contribute 20 per cent of incremental sales for FMCG and 60 per cent for tech durables. Non-food categories, in particular, grew 1.8 times faster than food during these periods, driven by deep discounts and consumer preference for non-essentials," it added.

It also highlights the challenges faced by large companies from small manufacturers and private labels from retailers that are gaining traction.

"Private labels are growing 1.5 times faster rate than large manufacturers, particularly within the mainstream pricing segment. Small players, on the other hand, are driving 70 per cent of new launches in modern trade, focusing on natural ingredients and luxury pricing that is more than 200 times of the category average price," it said.

The report also noted the shift happening towards smaller packs at MT channels.

"While large packs have traditionally dominated modern trade, there is a noticeable shift towards smaller pack sizes, which are now growing at double the rate of large sizes," it said.