Rural demand grew twice as fast as urban in July-September quarter: NielsenIQ

Demand in India’s hinterland continued to outpace that of cities, growing twice as fast as urban markets in the July-September quarter, driven by food staples and recovery of mid-sized companies, NielsenIQ said in its quarterly FMCG update on Thursday.

While urban demand was up 2.8%, demand in rural India grew 6%, against 5.2% in the April-June quarter. Overall, riding on rural demand, India’s fast moving consumer goods grew 5.7% by value and 4.1% by volume in the quarter. Price-led growth stood at 1.5 per cent.

NielsenIQ said in its update that both urban and rural markets grew sequentially in the quarter, with faster growth coming from rural markets.


“The Indian FMCG industry shows resilience with steady value growth and marginal price increases,” Roosevelt Dsouza, head of commercial, India, NielsenIQ, said in a statement. He said small manufacturers are rebounding after a recent decline, while major players trail in value growth.

NielsenIQ said traditional trade volumes grew 4.1% in the September quarter, compared to 3% in the preceding April-June quarter. Despite the slowdown, modern trade continues to outpace urban growth, NielsenIQ added.

Volume growth of packaged foods increased 3.4% in July-September, compared to 2.1% in the April-June quarter.

“Large players continue to demonstrate stronger performance compared to small and mid-sized players. However, small manufacturers recovered from the consumption decline of the last three quarters and grew faster than giants. This was led by a sharp recovery in volume growth in food for small players,” NIQ said in the update.