- India's FMCG, tech, and consumer durables sectors are experiencing robust growth despite inflationary pressures.
- A NielsenIQ report highlights a growing consumer preference for premium products, driving significant sales in these sectors.
- The report also reveals that 41% of urban Indian shoppers research products online but make purchases in-store.
- The future of India's FMCG, tech, and consumer durables sectors looks promising, with a strong foundation for continued growth and innovation.
India is making its mark in the Asia-Pacific region with consistent double-digit growth in the Fast-Moving Consumer Goods (FMCG), tech, and consumer durables segments. This growth trajectory is highlighted in a report by consumer research firm NielsenIQ (NIQ), titled 'Full View of Modern Trade Retail Trends'. The report provides a comprehensive overview of the current trends and future prospects of the modern trade retail sector in India.
Despite the inflationary pressures, modern trade has shown resilience, with double-digit volume growth continuing regardless of price fluctuations. This resilience is largely attributed to the consistent growth in both the FMCG and tech durables sectors. The report also highlights the growing consumer preference for premium products, with the premium-plus price segment driving almost 40% of FMCG sales and 30% of consumer durables sales.
Interestingly, the report finds that 41% of the urban Indian shoppers surveyed look up a product online but purchase it in-store. This trend of omni-channel shopping behavior underscores the importance of a seamless integration between online research and offline purchasing experiences for consumers.
India's FMCG, Tech, and Consumer Durables Sales Trends
The report also provides insights into the sales trends in the FMCG, tech, and consumer durables sectors. FMCG sales in modern trade rose 2% in urban India, while tech and consumer durables sales clocked a 4% growth. Festivals are a major driver for modern retail, contributing 20% of incremental sales for FMCG and 60% for tech and consumer durables driven by deep discounts. Key categories such as toothpaste, soap, and washing powder lead the charge, clocking 20 to 30% incremental sales on big days.
Another driver for modern trade is the premium-plus price segment, which drives almost 40% of FMCG sales and 30% of consumer durables sales. Many new product launches in modern trade are in the premium-plus space, reflecting growing consumer willingness to pay up to 2X the average price for superior benefits and features, said Sonika Gupta, Executive Director, Customer Success - India, at NIQ.
The Changing Landscape of Modern Trade in India
The report also highlights that sales of smaller packs are growing at twice the rate of large packs, and the increase in private labels and small players in the market. These are contributing to a more competitive modern trade environment, placing significant pressure on shelves that now accommodate more than 78,000 items, Gupta said.
This trend is evident across both food and non-food categories, offering brands the opportunity to optimize their existing assortment for higher ROI, while also innovating with smaller packs to encourage consumer trials, she added. To stay competitive, businesses must strategically optimize their product assortment, ensuring enhanced visibility and maximizing ROI from the modern trade channel. That way, brands can effectively leverage the channel's consistent double-digit growth and secure a stronger foothold in this evolving market, the report said.
The report by NielsenIQ provides valuable insights for businesses looking to navigate this evolving market and leverage the opportunities it presents. The future of India's FMCG, tech, and consumer durables sectors looks promising, with a strong foundation for continued growth and innovation.
