The forecast of a favourable monsoon and revised tax slabs are expected to provide a boost to consumption in the coming quarters
India’s consumer goods sector witnessed 11 per cent value growth in the March quarter, with growth in rural demand outpacing urban growth for the fifth straight quarter, as per a report by Reuters, which cited NielsenIQ.
In an industry grappling with slow wage growth in large cities and higher living costs, the robust demand in rural areas has become a bright spot, as per the report, which added that rural areas account for around one-third of overall consumer goods sales. The report noted that urban metros are reporting a shift towards ecommerce.
The report added that the rural consumption growth slowed in the March quarter, with volumes growing 8.4 per cent, compared to 9.2 per cent in the previous three months. However, it still outpaced the urban demand growth, which decelerated from 4.2 per cent to 2.6 per cent.
As the cost of staples like edible oil marked an increase of 5.6 per cent in the quarter, the overall value growth was aided by the price increases, the report noted. Small players, which registered 17.8 per cent value growth in the stated period, left the broader fast-moving consumer goods (FMCG) market behind. The report attributed this to a low base, slowing inflation and rural growth.
As far as the future outlook is concerned, the report highlighted that the forecast of a favourable monsoon and revised tax slabs are expected to provide a boost to the consumption in the coming quarters.
