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Nielsen IQ: Rural consumption doubles as compared to urban market

During the September quarter in the country, there has been a trend of gradual recovery in the urban as well as rural markets and most of the provinces of the country have seen higher volume growth in rural areas than in urban areas.

According to a report by data analytics firm Nielsen IQ, the country's FMCG industry recorded growth of 5.7% and 4.1% in value and volume respectively in the July-September quarter. Urban consumption growth was 2.8% during the third quarter, while growth in rural areas increased to 6% from 5.2% in the previous quarter.

Small and medium FMCG companies may see a rebound after a decline during several quarters. In terms of value and volume, small FMCG companies have recorded faster growth than the big FMCG giants. During the September quarter, demand for products from FMCG companies such as HUL, Nestlé, Dabur and Tata Consumer Products was subdued in the urban market due to food inflation.

The urban market accounts for approximately 62 to 65% of FMCG sales while the remaining contribution comes from the rural market, which is dominated by mainly food products and small products.

Consumer demand steady in HPC category across urban-rural markets During the September quarter, consumer demand in the HPC category, which includes skincare, shampoo, body lotion, shower gel, toothpaste, laundry detergent, etc., remained stable in urban and rural markets. Apart from that, the big companies in the FMCG segment have registered a strong performance.

Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).

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