Rural demand continued to outpace urban in April-June period: NielsenIQ

India's fast-moving consumer goods (FMCG) market saw a value growth of 13.9% in the April-June quarter, driven by strong rural demand and a steady recovery in urban areas, according to NielsenIQ. This period marked the sixth consecutive quarter in which rural demand, which grew by 8.4%, surpassed urban demand, which grew by 4.6%. However, the gap between rural and urban growth narrowed as urban markets showed signs of sequential recovery, particularly in smaller towns. Volume growth for the quarter was 6%, with unit growth outpacing this as consumers increasingly chose smaller packs. E-commerce continued to expand, gaining ground on modern trade in the eight largest metropolitan areas. The southern metros were leaders in e-commerce, holding an 18.4% share, which was higher than the 15.8% for all eight metros combined. NielsenIQ stated that although e-commerce only represents 11-13% of the FMCG market in metros, it is responsible for over half of the omnichannel growth.

Head of FMCG customer success at NielsenIQ in India, Mr. Sharang Pant, highlighted the Indian FMCG sector's resilience and noted that while urban recovery is gaining momentum in smaller towns, rural demand remains the "cornerstone of volume expansion". He added that with easing inflation and a positive monsoon forecast, the consumption outlook is optimistic. He suggested that to maintain this positive momentum, the industry must focus on deeper channel engagement and offer "sharper, value-led propositions". He also pointed out that the rapid growth of small manufacturers, which is outpacing the overall industry, indicates a shift in market dynamics and increasing competition. In the quarter, food consumption remained largely stable with a 5.5% growth, boosted by higher volumes in staples and impulse categories. Home and personal care products saw even stronger growth with a 7.5% increase in consumption. Over-the-counter categories experienced a significant 14.2% rise in value sales, mainly due to an 11% increase in prices.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.