FMCG volume growth moderates amid GST transition in September quarter, value up 12.9%: NielsenIQ

New Delhi: India’s fast-moving consumer goods (FMCG) sector reported a 5.4% increase in September quarter volumes, according to data released by consumer intelligence platform NielsenIQ; this increase gradually slowed due to the transition to new goods and services tax rates; The sales value increased by 12.9%.

Rural markets, which account for 38% of FMCG volumes, grew faster than urban areas for the seventh consecutive quarter. Urban volumes reported a sequential slowdown.

The FMCG sector recorded a 7.1% increase in pricing-based growth; unit growth outpaced overall volume growth; This points to consumers’ preference for smaller packages. FMCG volumes rose 6% in the June quarter.

“The Indian FMCG sector continues to demonstrate resilience, leading the rural markets for seven consecutive quarters,” said Sharang Pant, Head of Customer Success at NielsenIQ FMCG in India. “Rural demand remains the cornerstone of volume expansion, while urban recovery is gaining momentum, especially in smaller towns. “E-commerce continues to be an important growth engine, especially in the top eight metros.”

He added that the outlook for consumption remains optimistic as inflation eases and the impact of GST changes on consumption is expected in the next two quarters.

September quarter marked by transition to revised implementation GST rates have caused temporary stock losses in trade as companies look to pass on the benefits of lower prices to consumers. This caused consumers to delay their purchases.

As a result, most companies reported GST-related disruptions during the quarter. Mumbai-based Hindustan Unilever Ltd reported flat volume growth. Dabur India’s quarterly volumes rose 2%, while consolidated revenue rose 5% year-on-year.

NielsenIQ said there was a 7.7% increase in annual volumes in rural markets, compared to 3.7% growth in urban areas. Urban markets reported 4.1% volume growth in the June quarter. Rural growth slowed from 8.4% in the previous quarter.

revival trajectory

“This recovery is primarily driven by small urban towns. Offline sales continue to decline in metropolitan areas due to the shift to e-commerce. But modern commerce is also on the rebound,” NielsenIQ said in a report on Monday. he said.

Food demand remained broadly stable at 5.4% in the September quarter, driven by rising volumes in staples (rice, flour, spices) and decline in volumes in impulsive and habit-forming categories (snacks and ready-to-cook foods). Growth in home and personal care volume slowed to 5.5% on an annual basis.

Most categories reported a decline in September quarter volumes. Another factor contributing to this slowdown is a decline in the number of consumers turning to cheaper options or postponing purchases in a category.

Growth of small manufacturers continued to drive FMCG consumption during the quarter, supported by steady volume growth in both the food and home and personal care categories. In contrast, major players have seen a slowdown in consumption.

Non-prescription categories recorded a 14.8% increase in value sales, driven by a 9.7% increase in prices. Volumes increased by 4.8%.

The share of e-commerce increased by 1% in the largest metropolises.

“Omnichannel volume growth continues to be driven by e-commerce, with modern commerce also contributing in the quarter. However, e-commerce volume growth remains marginally soft in the September quarter,” NielsenIQ said.