Rural Surge Propels India's FMCG Sector as Urban Growth Slows

Nielsen IQ: India's fast-moving consumer goods (FMCG) sector witnessed rural areas outpacing urban regions in sales growth for the first time in five quarters, according to market researcher NielsenIQ.

Despite challenges like rising prices of essentials, FMCG sales volume rose by 6.5 per cent year-on-year in the January-March quarter, accelerating from the previous quarter's 6 per cent growth.

Rural India led the charge with a robust 7.6 per cent sales increase, driven by personal and home care products, while urban growth moderated to 5.7 per cent.

Notably, the non-food segment saw a rapid expansion, outpacing the food segment, indicating shifting consumer preferences.

Major FMCG players like Nestle India and Dabur reported strong results, buoyed by demand for essentials like biscuits.

Though Hindustan Unilever noted signs of rural recovery and Marico saw demand revival, both fell short of fourth-quarter profit estimates.

Looking ahead, Britannia's Managing Director, Varun Berry, expressed optimism for post-election and post-monsoon double-digit volume growth, despite anticipating a flat first quarter and a slightly inflationary demand environment post-elections.

India's forecast of an above-normal monsoon in June is expected to further boost rural income, potentially driving FMCG sector growth.

With Reuters Input