India leads in Asia-Pacific with double-digit growth in consumer goods sales
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India is the only market consistently delivering double-digit growth in the Asia-Pacific region in the FMCG, tech 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’, also states that despite inflationary pressures, modern trade has shown resilience, with double-digit volume growth continuing regardless of price fluctuations.
Interestingly, the report finds that 41 per cent of the urban Indian shoppers surveyed look up a product online but purchase it in-store.
NIQ data for March 2024 compared to March 2023 shows that FMCG sales in modern trade rose 2 per cent in urban India, while tech and consumer durables sales clocked a 4 per cent growth. Festivals are a major driver for modern retail, contributing 20 per cent of incremental sales for FMCG and 60 per cent for tech and consumer durables driven by deep discounts. Key categories such as toothpaste, soap, and washing powder lead the charge, clocking 20 to 30 per cent incremental sales on big days, the report states.
Another driver for modern trade is the premium-plus price segment, which drives almost 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 2X the average price for superior benefits and features," said Sonika Gupta, Executive Director, Customer Success - India, at NIQ.
The report also highlights that sales of smaller packs are growing at twice the rate of large packs, and the increase in private labels and small players in the market. These are contributing to a more competitive modern trade environment, placing significant pressure on shelves that now accommodate more than 78,000 items, Gupta said.
"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 added.
"To stay competitive, businesses must strategically optimise their product assortment, ensuring enhanced visibility and maximising ROI from the modern trade channel. That way, brands can effectively leverage the channel's consistent double-digit growth and secure a stronger foothold in this evolving market," the report said.
