Rural markets outpace urban centres in growth for FMCG goods: NielsenIQ

India’s fast-moving consumer goods (FMCG) sector grew 5.7 per cent by value and 4.1 per cent by volume in the July-September quarter driven by rural demand which grew faster than urban markets for the third consecutive quarter, according to the latest report by consumer intelligence firm NielsenIQ.

Rural demand growth was recorded at 6 per cent which was twice as fast as the 2.8 per cent increase in urban demand during this period, it said.

“Traditional trade volumes grew by 4.1 per cent in Q3 2024 (July-September), compared to 3.0 per cent (April-June) in Q2 2024. Despite the slowdown, modern trade manages to outpace urban growth,” according to the NielsenIQ statement.

The uptick in volume growth is largely attributed to staple categories such as edible oils, packaged atta, and spices despite the price rise.

“The Indian FMCG industry shows resilience with steady value growth and marginal price increase. Rural volume growth at 6 per cent continues to surpass urban markets, despite softer consumption in both regions this quarter. Small manufacturers are rebounding after the recent decline, while major players trail in value growth,” said Roosevelt D’Souza, head of commercial – India at NielsenIQ.

FMCG saw a slight improvement in volume growth in Q3 2024. Food consumption growth increased to 3.4 per cent in Q3’24 compared to 2.1 per cent in Q2’24. This uptick in volume growth is attributed to Staple categories – Edible oils, Packaged Atta, and Spices despite price growth. In HPC categories, the consumption growth stabilises at 6.0 per cent in Q3’24 compared to Q2’23 at 6.7 per cent. This stabilisation in consumer demand for HPC categories is observed in both urban and rural markets, the report said.

Over-the-counter categories like Rubefacient, and Analgesics exhibited growth in value sales to 11.7 per cent in Q3’24 backed by price growth.

Large players continue to demonstrate stronger performance compared to small, mid players, and giants. Small manufacturers recovered from the consumption decline in the last 3 quarters and grew faster than the giants. This is led by a sharp recovery in volume growth in the food augment for small players, the report added.

(With inputs from IANS)