Volume and sales growth numbers of almost all of India’s consumer goods companies in the fourth-quarter have reflected a slowdown in consumption. While some of it has been seen in urban wholesale channels, data published by market research firm Nielsen showed rural markets have caused 60 percent of the all India slowdown. This declining trend in both value, as well as volume, has been visible over the last three quarters -- Q3CY18 to Q1CY19.

According to Nielsen data growth has declined by 4.8 percent in value terms and 5.6 percent in volume terms over the last three quarters. Haryana, Andhra Pradesh, Madhya Pradesh, Maharashtra and Orissa have contributed to about 75 percent of the rural slowdown.

A major slowdown has been seen in the food category, especially in the ‘essentials’ space. A slowdown in volume growth has been seen in categories such as packaged spices, ghee, oil as well as atta, according to Nielsen.

Historically, growth in rural India is always 3-5 percent higher than urban markets. Several fast-moving consumer goods (FMCG) companies have been concerned about this declining value and volume growth trend.

According to industry sources, many companies are looking to drive volumes by the introduction of price point packs and are working on aggressively ramping up direct distribution. "Consumer goods companies are also investing in field force and technology. They are looking to launch innovative products in the market at lower price points to beat the slowdown," an industry representative noted. Micro market campaigns and rural India focused marketing campaigns are seen as some tools that could help growth bounce back, they said.

First Published:Jun 3, 2019 1:40 PM IST