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Business Economy

Rural FMCG market outgrows urban in Q1 of 2024: NielsenIQ

New Delhi, May 7 (UNI) India's fast-moving consumer goods (FMCG) sector saw rural markets outshining urban growth for the first time in five quarters during January-March quarter (Q1) of calendar year 2024, leading consumer intelligence company NielsenIQ (NIQ) said on Tuesday.
"The FMCG industry's growth continues to be driven by consumption trends in Q1’24 (JFM’24), with rural areas surpassing urban growth for the first time in five quarters," said Roosevelt Dsouza, Head of Customer Success – India at NIQ.
According to the report, the Indian FMCG industry experienced a 6.6% growth in value, attributed to a 6.5% increase in volume at an All-India level.
NielsenIQ said that urban consumption grew at 5.7% in Q1 while rural grew at 7.6%.
During the Q1, Home and Personal Care (HPC) categories outperformed food categories.
"While food categories witness higher unit purchases, the growth in HPC is largely driven by the popularity of larger pack sizes," Dsouza said.
The NielsenIQ report said that rural consumption growth has gradually picked up pace and has surpassed urban in Q1’24. Urban markets saw sequential decline in consumer demand leading to 5.7% this quarter.
At the All-India level, both the Food and Non-Food sectors contributed to the growth in consumption. In Q1 of 2024, Non-Food sector saw almost double the growth as compared to Food.
"More units were purchased in Food categories compared to the same period last year, whereas in Non-food, more large packs were bought," the report said.
In Q1 this year, the volume growth in the Food sector was 4.8% compared to Q1 of 2023, down from 5.3% in Q4’23.
"This slowdown in growth is primarily due to products falling under Staples," the report said.
The report said that within the broader FMCG industry, large players continued to demonstrate stronger performance compared to small players. Despite this, smaller manufacturers have seen higher volume growth rates in non-food categories over the last two quarters compared to large companies.
"This might be because smaller players face challenges in keeping prices stable in the food sector, while non-food categories with significant price increases have experienced higher volume growth," NielsenIQ said.
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