Rural FMCG Surge: A Flourishing Market Amidst Inflation

The Indian FMCG sector has shown notable growth with rural areas outpacing urban ones in volume. NielsenIQ reports a 5.7% value growth in Q3 2024, with rural areas reaching a 6% growth rate. Despite urban market challenges, smaller FMCG companies are seeing a recovery, particularly in food consumption.

The latest NielsenIQ report highlights a sequential recovery in consumer demand across Indian markets, notably with rural areas outpacing urban regions in volume growth. The FMCG sector experienced a 5.7% increase in value and a 4.1% rise in volume in the July-September quarter.

Despite facing urban market challenges due to high food inflation, small and medium FMCG companies rebounded, driven primarily by the food segment. While leading companies like HUL, Nestle, and Dabur reported softness in urban demand, smaller firms saw quicker recovery.

Industry observers note that rural markets, which account for over 35% of FMCG sales, showed robust growth in the staple categories such as edible oils and spices. Meanwhile, Home & Personal Care categories stabilized in consumption at 6% growth, reflecting resilience in consumer demand.

(With inputs from agencies.)