India's FMCG Sector Soars With Unmatched Double-Digit Growth: Report

The report shows that India is leading in modern trade within the region, with the premium-plus pricing segment representing nearly 40 per cent of FMCG sales and 30 per cent of tech durables sales

India stands out as the sole country in the Asia-Pacific region where FMCG and tech durables sales through modern trade channels are consistently experiencing double-digit growth, according to a report by data analytics firm NielsenIQ titled 'Full View of Modern Trade Retail Trends'. This growth is driven by premiumisation and festive season sales. 

The report highlights that India is leading in modern trade within the region, with the premium-plus pricing segment representing nearly 40 per cent of FMCG sales and 30 per cent of tech durables sales.

"India emerges as the only market consistently delivering double-digit growth in both the FMCG and tech & durables sectors, underscoring the resilience and evolving preferences of Indian consumers," said the report.

While online channels in India are expanding rapidly, modern trade channels continue to be highly favoured, according to the report. 

Modern trade refers to selling goods through large, organised retail outlets such as supermarkets, hypermarkets, department stores, and mini-markets. Recent data shows that modern trade channels experienced a 2 per cent growth in FMCG sales and a 4 per cent increase in tech durables sales on a moving annual total (MAT) basis as of March 2024.

"Despite inflationary pressures, modern trade has shown resilience, with double-digit volume growth continuing regardless of price fluctuations. Interestingly, there is a growing preference for products in premium-plus pricing, which accounts for approximately 40 per cent of FMCG sales and 30 per cent of tech durables sales, both experiencing significant growth," it said.

The report also highlighted that festive seasons and peak shopping periods continue to be crucial for driving growth in both the FMCG and tech durables sectors.

These periods account for 20 per cent of the incremental sales in FMCG and 60 per cent in tech durables. Non-food categories, in particular, experienced growth 1.8 times faster than food during these times, driven by substantial discounts and a consumer preference for non-essential items, the report noted.

It also underscores the challenges large companies face from smaller manufacturers and private labels from retailers that are gaining ground. "Private labels are growing at a 1.5 times faster rate than large manufacturers, particularly within the mainstream pricing segment. Small players, on the other hand, are driving 70 per cent of new launches in modern trade, focusing on natural ingredients and luxury pricing that is more than 200 times of the category average price," the report said.

The report also highlighted a shift towards smaller pack sizes in modern trade channels. 

The report also said that although large packs have traditionally been dominant in modern trade, there is a clear shift towards smaller pack sizes, now growing at twice the rate of their larger counterparts.