Global research firm Kantar predicts continued decline in demand for FMCG products in India
FMCG) industry after the slowdown became more pronounced in the December quarter.
Overall volumes, which indicate number of products consumers bought, expanded 5.2% in the December quarter, lower than 6.9% in the September quarter. Sales volumes in rural markets climbed 4.8%, and in cities by 5.6%, from a year earlier, data from Kantar showed. Kantar monitors branded and unorganised products, including unpackaged voluminous commodities. Nielsen, on the other hand, tracks primarily branded retail sales.
“We are likely to see another drop in the next quarter, and the current trend of slowdown is expected to stay deep into 2024," said K Ramakrishnan, managing director, South Asia, Worldpanel division, Kantar. «The mild slowdown we saw in the September quarter became even more pronounced in the December quarter.”
The deceleration in demand was primarily manifest in the foods segment, said Ramakrishnan. “Growth here stumbled to 5.8% last quarter, from a strong 8.2% in the previous quarter,” he said.
India’s price-sensitive consumer industry has faced a demand crunch after companies raised sticker prices by almost a quarter in the past two years to offset the impact of input costs, which first climbed in the immediate aftermath of global supply chain disruptions spawned by mobility and business curbs deployed to contain the spread of the coronavirus. Subsequently, record low policy rates in the world’s richest countries and the Ukraine conflict caused commodity prices to spike.
However, in the past three quarters,
