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Rural India's consumer products' demand outpaces urban areas, NielsenIQ says

Consumer goods-makers in the world's fifth-largest economy have been struggling with sluggish demand, especially in the hinterlands.
Last Updated : 07 May 2024, 09:51 IST
Last Updated : 07 May 2024, 09:51 IST

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Bengaluru: Indian fast-moving consumer goods' sales rose in January-March, with rural growth outpacing that in urban areas for the first time in five quarters, market researcher NielsenIQ said on Tuesday.

Consumer goods-makers in the world's fifth-largest economy have been struggling with sluggish demand, especially in the hinterlands, as higher prices of essentials including milk and tomatoes have forced people to cut back spending on non-essentials.

Sales volumes for fast-moving consumer goods rose 6.5 per cent in the March quarter from a year earlier, NielsenIQ said, quickening from a 6 per cent growth in the previous quarter.

Sales rose 7.6 per cent in rural India, boosted by the personal and home care categories, against a 5.8 per cent growth in the previous quarter.

Meanwhile, urban sales growth slowed to 5.7 per cent from 6.9 per cent in the previous quarter, as consumer goods makers struggled with rising competition.

Sales in the non-food segment rose at double the pace compared with the food segment, NielsenIQ said.

Consumer goods majors including Nestle India and Dabur have posted strong results for the March quarter as demand for products such as biscuits buoyed their bottom-lines.

Indian consumer giant Hindustan Unilever said a rural recovery has started while Marico said a demand recovery is underway even as the companies missed fourth-quarter profit estimates.

"Post-election, post-monsoon, we would be aiming towards a double-digit volume growth for sure. I think the first quarter is flattish," Varun Berry, managing director of Britannia said in a post-earnings call.

The consumer goods maker expects the demand environment to be "slightly inflationary" after the national elections which end in early June.

India anticipates an above-normal monsoon in June, which could aid rural income.

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Published 07 May 2024, 09:51 IST

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