Growth in the FMCG industry in India has slackened in the last three months of 2022 from the previous quarter as rural shoppers spent less on packaged food, washing powder, and shampoo, market intelligence firm NielsenIQ reported.
FMCG companies have struggled to pull in sales from cash-strapped rural consumers, worst affected by the COVID-19 pandemic and Russia-Ukraine war-led inflation. India’s FMCG industry grew 7.6% in October-December after a 9.2% rise in the previous three months, though consumption declined in the south and west, NielsenIQ said.
Satish Pillai, managing director of Nielsen IQ in India, said that over the last year, consumer spending was impacted primarily because of inflation, echoed by consumers in the shift to smaller packs and by manufacturers via grammage reduction.
Consumption of non-food items such as washing powder, detergent bars, and toilet soap has decreased across consumer groups, according to NielsenIQ, with manufacturers offering lower discounts. Still, consumers in urban areas bought more, with big-format supermarkets and hypermarkets growing in double digits for the second straight quarter.
Prices of products rose an average of 7.9% in October-December, marking the first single-digit growth after six quarters. It recorded growth of 9.9% to about 13% during the period. Easing inflation and a pickup in farm incomes are leading to a gradual recovery in rural markets.