Premium products are fast flying off the shelves despite slowdown
premium products from daily groceries and household items to smartphones and beer has bucked the slowdown trend, especially in cities where consumers have cut back on lower-priced products amid inflation.
Most consumer companies during the September quarter earnings indicated that urban growth tapered off even as demand in villages recovered gradually. «We actually looked under the bonnet. And even when you peel the surface, you find that the premium segments, popular segments, mass segments, the rank order of hierarchy of growth is the same as observed in other quarters. Premium continues to grow 30-odd percent or thereabouts faster than the other segments. And we see the trend of upgradation remaining consistent and secular even in rural,» Rohit Jawa, managing director at Hindustan Unilever said.
Urban markets grew 4.3% while rural areas saw volume growth at 3.9% within the FMCG segment, as per latest data by Kantar. This was compared to a growth of 8.1% in cities and 6.3% in villages a year ago, indicating broad-based slowdown across markets.
However, over the past few quarters, there has been a surge in demand at quick commerce channels, largely an urban phenomenon, which in turn has put pressure on kirana sales. However, companies claimed that premium products are moving faster from retail shelves, regardless of channels. Saugata Gupta, managing director of Marico, said it continues to see buoyancy in consumption in the top end and upper middle class segments in urban areas.
«However, among the middle and
