India is the only market consistently achieving double-digit growth in the Asia-Pacific region across the fast-moving consumer goods (FMCG), technology, and consumer durables segments, according to a report by consumer research firm NielsenIQ (NIQ) released on Wednesday.
The report, titled "Full View of Modern Trade Retail Trends," highlights that despite inflationary pressures, modern trade in India remains resilient, with double-digit volume growth continuing regardless of price fluctuations.
Notably, 41 per cent of urban Indian shoppers surveyed said they look up products online but prefer to make their purchases in-store.
NIQ data for March 2024, compared with March 2023, reveals that FMCG sales in modern trade increased by 2 per cent in urban India, while sales of technology and consumer durables grew by 4 per cent.
The report indicates that festivals play a crucial role in driving modern retail, contributing 20 per cent of incremental FMCG sales and 60 per cent of tech and consumer durables sales, largely due to deep discounts. Key categories such as toothpaste, soap, and washing powder are leading the charge, with incremental sales rising by 20 to 30 per cent during major shopping days.
The premium-plus price segment is another key driver for modern trade, accounting for nearly 40 per cent of FMCG sales and 30 per cent 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 twice the average price for superior benefits and features,” said Sonika Gupta, Executive Director of Customer Success – India, at NIQ.
The report also notes that sales of smaller packs are growing at twice the rate of larger packs, driven by the increasing presence of private labels and small players in the market. This trend is creating a more competitive modern trade environment, with shelves now accommodating more than 78,000 items, Gupta added.
“This trend is evident across both food and non-food categories, offering brands the opportunity to optimise their existing assortment for higher ROI, while also innovating with smaller packs to encourage consumer trials,” she said.
The report concludes that to remain competitive, businesses must strategically optimise their product assortment, ensuring enhanced visibility and maximising ROI from the modern trade channel. By doing so, brands can effectively leverage the channel’s consistent double-digit growth and secure a stronger foothold in this evolving market.
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