India has become the only country in the Asia-Pacific region where sales of fast-moving consumer goods (FMCG) and technology durables sectors across modern retail channels are consistently generating double-digit growth, helped by premiumisation and festive period sales, data analytics firm NielsenIQ said in a report.
According to the report’s findings, India holds a dominant position in the Asia-Pacific region in terms of sales of modern products. The premium-plus price segment accounts for nearly 40 percent of FMCG sales and 30 percent of sales of technological durable goods.
“India emerges as the only market to consistently deliver double-digit growth across both FMCG, technology and durables sectors, underscoring the resilience and changing preferences of Indian consumers,” said the NielsenIQ report titled ‘A Complete View of Modern Retail Trends’.
He added that while online channels continue to grow rapidly in India, modern trade channels remain the preferred channel. Modern trade involves the sale of goods through large organised stores such as supermarkets, hypermarkets, department stores and mini-markets. The latest data reveals a 2% growth in FMCG sales and 4% in technology durables from modern trade channels on a rolling annual total (MAT) basis by March 2024.
“Despite inflationary pressures, modern trade has shown resilience, with double-digit volume growth continuing regardless of price fluctuations. Interestingly, there is a growing preference for products with premium plus pricing, accounting for approximately 40 percent of FMCG sales and 30 percent of durable technology sales, both experiencing significant growth,” he noted.
The report also added that festive seasons and peak shopping periods remain key for both FMCG and durable technology sectors. These periods “contribute 20 percent of incremental sales for FMCG and 60 percent for durable technology. Non-food categories, in particular, grew 1.8 times faster than food during these periods, driven by deep discounts and consumer preference for non-essential products,” it added.
It also highlights the challenges facing large companies, from small manufacturers to retailers’ private labels, which are gaining ground.
“Private labels are growing at a rate 1.5 times faster than large manufacturers, especially in the general price segment. Small players, on the other hand, are driving 70 percent of new launches in modern trade, focusing on natural ingredients and luxury price points that are more than 200 times the average price of the category,” he said.
The report also highlights the shift taking place in maritime transport channels towards smaller packaging. “While large packages have traditionally dominated modern trade, there is a noticeable shift towards smaller package sizes, which are now growing at twice the rate of large sizes,” it says.
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