Indian FMCG market continues to grow

24 July 2009

NEW DELHI: The fast-moving consumer goods industry in India registered growth of 15% over the last financial year, as demand from rural regions of the country helped offset the broader impact of the economic downturn.

It is estimated that the Indian FMCG sector currently has an annual value of 120,000 crore rupees ($25.0bn; €17.4bn; £15.0bn), and this total is expected to more than triple by 2018.

Research from the Federation of Indian Chambers of Commerce and Industry and Technopak found that certain sectors of the market were coping better than others in the financial crisis, despite the overall improvement.

A report issued by the two organisations argued that "consumers may be cutting down on durable and other capital expenditure, but cannot avoid spends on daily necessities."

Similarly, increasing income levels in rural areas helped stimulate overall category sales in the year to March, boosted by government initiatives such as the National Rural Employment Guarantee Scheme.

"The rural market is growing in leaps and bounds. These people are more brand conscious than their urban counterparts," said Shantanu Khosla, managing director at Procter & Gamble in India.

Harsh Mariwala, chairman and managing director of Marico, also predicted that the "sector is not likely to see a fall in demand ... but, by and large, in terms of volume growth rate it will be lower than last year."

"Our volume growth also is going to be little lower than last year. Last year, it was 25%, this year there may be only 10% to 15% growth in revenues," he added.

Data sourced from Economic Times/Hindu Business Line; additional content by WARC staff