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Time of India
08-05-2025
- Business
- Time of India
Rural India's consumer demand outpaces urban areas for fifth straight quarter, NielsenIQ says
HighlightsIndia's consumer goods sector experienced an 11 percent growth in value in the March quarter, with rural areas outpacing urban growth for the fifth consecutive quarter, according to market research firm NielsenIQ. Rural consumption growth, although slowing to 8.4 percent in the March quarter, still surpassed urban demand growth, which was recorded at 2.6 percent. Consumer goods manufacturer Marico reported fourth-quarter profits exceeding analysts' expectations, driven by improved rural demand and price increases, while larger companies like Hindustan Unilever and Nestle India faced weaker profits. India's consumer goods sector reported an 11 per cent growth in value in the March quarter, as rural growth outpaced that in urban areas for the fifth straight quarter, market research firm NielsenIQ said on Thursday. Rural areas - which account for just over a third of overall consumer goods sales - have become a bright spot for an industry that is struggling with higher living costs and slow wage growth in large cities. "Rural markets continue to drive growth, whereas urban metros continue to see a shift toward E-commerce," Roosevelt Dsouza, head of customer success for consumer goods at NielsenIQ, said. Although rural consumption growth slowed in the March quarter, with volumes rising 8.4 per cent compared to 9.2 per cent in the previous three months, it still outpaced urban demand, where growth decelerated to 2.6 per cent from 4.2 per cent . Price increases also contributed to the overall value growth, with the cost of staples such as edible oil rising 5.6 per cent during the quarter, compared with just 0.3 per cent in the same period a year ago. Low base, rural growth, and easing inflation are helping smaller players, which saw 17.8 per cent growth in value, outpacing the broader FMCG market, the report said. Indian consumer goods maker Marico reported fourth-quarter profit above analysts' expectations, boosted by improving rural demand and price increases for its key packaged oil brands-underscoring the strength of non-urban markets. The company also said it plans to expand its presence in villages across India. Smaller manufacturers are driving consumption compared to larger players, whose volume growth has halved compared to the December quarter, NielsenIQ said. Hindustan Unilever and Nestle India reported weaker fourth-quarter profits, with Hindustan Unilever cutting its margin forecast amid high commodity costs and sluggish urban demand. Going ahead, NielsenIQ said revised tax slabs and a favorable monsoon forecast could further lift consumption in the coming quarters.
Mint
08-05-2025
- Business
- Mint
India's FMCG industry clocks 11% growth in March quarter on higher edible oil prices
The Indian fast-moving consumer goods (FMCG) industry reported 11% year-on-year value growth in the March quarter, driven by a 5.1% volume increase and a 5.6% price hike, according to NielsenIQ. While overall inflation is easing, high edible oil prices are keeping the basket of staples expensive, resulting in higher value growth. But higher unit growth compared to volume growth suggests consumers are choosing smaller pack sizes. "The FMCG sector is showing mixed signals—while volume growth is slowing across categories, non-food segments are still outpacing food. Inflation is easing overall, but high edible oil prices are keeping staples expensive,' said Roosevelt Dsouza, head of customer success, FMCG, NielsenIQ India. Rural markets continue to drive growth, while metros continue to see a shift toward e-commerce, with higher shopper engagement. Dsouza said with a favourable monsoon forecast and revised tax slabs, consumption is likely to pick up in the upcoming quarters. Interestingly, small players are gaining ground owing to a low base and changing market dynamics, though their long-term momentum remains to be seen, he added. NIQ follows a January-to-December year. Although rural demand growth slowed slightly in the March quarter compared to the previous one, it still significantly outpaced urban demand, expanding four times faster. Urban market growth decelerated in the March quarter. Rural markets saw an 8.4% volume increase, a slight dip from the December quarter. In contrast, urban market volume growth slumped to 2.6% year-on-year, declining both sequentially and annually. Across most of India, rural markets continued to perform better than their urban counterparts. Large consumer goods companies, which act like proxies for household consumption, have shared similar views in recent earnings calls. Last week Hindustan Unilever Ltd (HUL) pointed to a recovery in rural markets. These markets have been 'resilient and robust' over the last few quarters, Rohit Jawa, CEO and managing director, HUL, said after the company's earnings call last week. 'Monsoons have been good, projections have been decent, reservoirs are full, and agri output is strong. We believe this will be an important trigger, given companies like ours have a large rural portfolio. Urban demand has been subdued in recent quarters, but macro tailwinds are building,' he added. NIQ data revealed that food consumption growth slowed to 4.9% in Q1 2025 from 6% in Q4 2024, primarily due to decreased volumes in staple categories such as edible oils and palm oil, which saw prices increase. The home and personal care (HPC) category saw consumption growth of 5.7% in Q1 2025, with higher demand in rural areas, NIQ noted. Meanwhile, small manufacturers are leading the way in driving consumption, supported by steady volume growth in both the food and HPC categories. In contrast, larger players are seeing slower volume growth, which has halved from the December quarter of 2024. A low base, rural growth, and easing inflation are helping small players outpace overall FMCG growth, NIQ said. The popularity of e-commerce, including quick commerce, was felt across trade channels during the March quarter, with both modern trade and traditional trade reporting a sequential slump in volumes. Traditional trade volumes increased to 6.2% in Q1 2025 from 5% in Q1 2024, but declined versus the December quarter. Modern trade volumes were down 3.3% year-on-year. E-commerce continues to strengthen its presence significantly in eight metros, hitting the share of offline channels. Both modern and traditional trade saw their share decline in the March quarter. Traditional trade reported a 1.5% year-on-year decline in overall share of FMCG trade to 62.5%, while the share of modern trade slumped 2.8% from a year ago. This growth was on account of increasing online shopper penetration, more purchase occasions, and increasing basket sizes (more units purchased per shopper), NIQ said. E-commerce is increasingly contributing to the revenue of major FMCG companies, with this trend accelerating each quarter. For Nestle India, e-commerce, largely driven by quick commerce, constituted 8.5% of its domestic sales for the financial year ending 31 March 2025.
Reuters
08-05-2025
- Business
- Reuters
Rural India's consumer demand outpaces urban areas for fifth straight quarter, NielsenIQ says
May 8 (Reuters) - India's consumer goods sector reported an 11% growth in value in the March quarter, as rural growth outpaced that in urban areas for the fifth straight quarter, market research firm NielsenIQ said on Thursday. Rural areas - which account for just over a third of overall consumer goods sales - have become a bright spot for an industry that is struggling with higher living costs and slow wage growth in large cities. "Rural markets continue to drive growth, whereas urban metros continue to see a shift toward E-commerce," Roosevelt Dsouza, head of customer success for consumer goods at NielsenIQ, said. Although rural consumption growth slowed in the March quarter, with volumes rising 8.4% compared to 9.2% in the previous three months, it still outpaced urban demand, where growth decelerated to 2.6% from 4.2%. Price increases also contributed to the overall value growth, with the cost of staples such as edible oil rising 5.6% during the quarter, compared with just 0.3% in the same period a year ago. Low base, rural growth, and easing inflation are helping smaller players, which saw 17.8% growth in value, outpacing the broader FMCG market, the report said. Indian consumer goods maker Marico ( opens new tab reported fourth-quarter profit above analysts' expectations, boosted by improving rural demand and price increases for its key packaged oil brands—underscoring the strength of non-urban markets. The company also said it plans to expand its presence in villages across India. Smaller manufacturers are driving consumption compared to larger players, whose volume growth has halved compared to the December quarter, NielsenIQ said. Hindustan Unilever ( opens new tab and Nestle India ( opens new tab reported weaker fourth-quarter profits, with Hindustan Unilever cutting its margin forecast amid high commodity costs and sluggish urban demand. Going ahead, NielsenIQ said revised tax slabs and a favorable monsoon forecast could further lift consumption in the coming quarters.
Reuters
06-02-2025
- Business
- Reuters
Rural demand, price hikes power India consumer goods sector growth, NielsenIQ says
Feb 6 (Reuters) - Solid demand in rural areas, as well as higher prices of staples including edible oil and wheat flour, helped the consumer goods sector report a 10.6% sales growth in the December quarter, market researcher NielsenIQ said on Thursday. India's rural areas - which account for just over a third of consumer goods sales - have proven a bright spot for an industry struggling with an inflation-led spending slowdown in large cities. "Rural markets (continued) to lead the charge, outpacing urban consumption (during the December quarter)," Roosevelt Dsouza, head of customer success for consumer goods at NielsenIQ, said in a statement. Sales volume jumped 9.9% in rural areas in the December quarter, up from 5.7% in the previous quarter - double the 5% increase in urban centers, NielsenIQ said. But it added urban pockets also improved from the September quarter's 2.6% growth. Rural areas have outperformed urban locations for the last four quarters, benefiting from income support schemes rolled out by several Indian states, while slowing salary increases in cities have squeezed consumer spending. In the October-December quarter, overall volume rose by 7.1% - the highest in over a year - driven by demand for laundry products and edible oil, even as prices rose by 3.3%, according to NielsenIQ. Dabur India ( opens new tab and Hindustan Unilever ( opens new tab reported a higher December-quarter profit on recovering rural demand. However, large consumer goods makers, with topline exceeding 50 billion rupees ($571.2 million) are also facing stiff competition from smaller rivals, whose sales increased roughly twice as fast during the festive quarter, NielsenIQ said. Consumer goods makers have also raised product prices to counter price increases in commodities such as copra and cocoa, with cooking oil maker Adani Wilmar ( opens new tab and Hindustan Unilever warning of further hikes. Indians also preferred smaller product packs during the quarter, NielsenIQ said, echoing comments from Hindustan Unilever. ($1 = 87.5400 Indian rupees)
