Rural Markets Dominate as FMCG Volume Growth Slows in India

The FMCG industry's volume growth in India slowed to 5.1% in the March quarter due to increased small-value pack purchases. Non-food segments continue to outperform food, with rural markets growing faster than urban ones. Small players are gaining ground amidst changing dynamics, despite high edible oil prices.

The FMCG industry's volume growth in India has decelerated, as reported by NielsenIQ. The latest figures for the March quarter indicate a slowdown to 5.1%, attributed largely to a preference for small-value pack purchases among consumers.

While non-food segments continue to outperform food items, the rural market remains a vital driver of growth, expanding faster than urban areas, despite also seeing a slowdown compared to previous periods. This shift underscores a more significant consumer inclination towards smaller packaging, benefiting smaller and often unbranded players.

The industry faces mixed signals, with inflation easing, but persistently high edible oil prices maintaining staple costs. E-commerce continues to draw urban consumers, marked by a notable uptick in shopper engagement, while large manufacturers experience slower growth.

(With inputs from agencies.)