 "FMCG")
India’s fast-moving consumer goods (FMCG) industry witnessed robust growth in the July-September quarter (Q2FY24) as rural markets continued to recover amid easing inflation, the data by NIQ, formerly NielsenIQ, showed on Tuesday.
The FMCG industry clocked a 9 per cent year-on-year (Y-o-Y) growth in terms of value in Q2FY24, while sales volumes rose 8.6 per cent in this period, indicating positive consumption patterns at all-India level. Volumes in rural markets grew 6.4 per cent Y-o-Y in the quarter, the research firm said. Within FMCG, both food and non-food categories grew at 8.7 per cent Y-o-Y in Q2FY24.
Rural markets are showing “signs of recovery”, with consumption picking up during the September quarter compared to the year-ago period.
Urban markets, on the other hand, are maintaining “a stable rate of consumption growth”, NIQ noted in its report.
“The FMCG industry has witnessed a further reduction in price growth from last quarter, which has given a necessary impetus to the spending power of the consumer. This is evident in rural markets, where there is an uptick in consumption across categories,” Satish Pillai, managing director, NIQ India, said.
“Overall, the cooling of inflation in the country fuelled by base effects, and the recent decline in unemployment figures and LPG prices, amongst other factors, have contributed to the willingness of the consumer to spend,” Pillai said.
Consumption is pushed by an increase in the number of units sold across rural, traditional trade, and modern trade.
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“Unlike other APAC (Asia-Pacific) markets, where subdued growth is driven by price hikes, the India story is all about higher consumption. Continuing the gradual trend observed in recent months, rural consumption is witnessing a positive trajectory,” said Roosevelt D’souza, lead, customer success, NIQ India.
In rural markets, consumers are opting for smaller-sized packs, while in urban markets, there is a continued preference towards larger packs.
Modern trade witnessed a strong double-digit growth of 19.5 per cent in the quarter, while traditional trade was also on the rise with consumption improving to 7.5 per cent in the period, up from 6.2 per cent in April-June.
Small manufacturers are experiencing faster growth rates in non-food categories when compared to their larger counterparts, while in foods, large players are growing faster in volume than small players.
Local brands have been able to capture market share as prices of raw materials are lower, making it easier for them to manufacture and sell FMCG products at lower prices.
Hindustan Unilever and ITC both pointed out after announcing their September quarter results that regional brands have gained momentum.
