Indian FMCG sales to rise

01 October 2009

NEW DELHI: Sales levels in the FMCG category in India are expected to record a double-digit improvement in the third quarter of this year, boosted in part by an increase in advertising activity among some of the major players in the sector.

It is estimated by analysts that sales in the Indian fast-moving consumer goods market will grow by as much as 13% over the period from July to September.

Nikhil Vora, managing director of IDFC SSKI Securities, argued that “we expect the July-September quarter to be fairly resilient, and we don't expect any pressures on either volumes or margins.”

The main contributors to this trend are said to include an uptick in demand in rural areas, and several high-profile product launches.

Similarly, a heightened focus on promotions, and rising advertising expenditure, among manufacturers will play a part in stimulating consumption.

PepsiCo and Coca-Cola are two examples of FMCG companies that have introduced cheaper products, and a variety of pack sizes, in the Asian nation, as they seek to cover all relevant price points.

Similarly, Hindustan Unilever, India's biggest advertiser, has initiated a wide-ranging programme of price cuts, aided, in particular, by a decline in input costs.

GlaxoSmithKline is one of a large number of brand owners that have also substantially increased their marketing spend during 2009, a group that includes domestic firms like Godrej and Dabur.

Adi Godrej, chairman of Godrej, said “the economy has done exceedingly well and we expect healthy growth. The delay in monsoons has not had much impact on our sales which continue to be robust.”

Rajan Varma, of Dabur, added that “business has been good and there has been no major impact on consumption by way of delayed rains.”

Data sourced from Economic Times; additional content by WARC staff