India only Asia-Pacific nation to deliver double-digit sales growth of FMCG, tech durables: Report

India has emerged as the only country in the Asia-Pacific region where sales of fast-moving consumer goods (FMCG) and tech durable sectors from modern trade channels are consistently delivering double-digit growth, helped by premiumisation and festive period sales, data analytics firm NielsenIQ said in a report.

According to the report's findings, India is dominant in modern trade sales in the Asia Pacific region. The premium-plus pricing segment accounts for nearly 40 per cent of FMCG sales and 30 per cent of tech durables sales.

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"India emerges as the only market consistently delivering double-digit growth in both the FMCG and tech & durables sectors, underscoring the resilience and evolving preferences of Indian consumers," said NielsenIQ report titled 'Full View of Modern Trade Retail Trends'. The report added that though online channels continue growing rapidly in India, modern trade channels remain preferred. 

Nielsen highlights growth of India's modern trade channels

Modern trade involves selling goods through large, organized stores such as supermarkets, hypermarkets, department stores, and mini-markets. The data reveals a two per cent growth in FMCG sales and four per cent in tech durables from modern trade channels on MAT (moving annual total) basis in March 2024.

"Despite inflationary pressures, modern trade has shown resilience, with double-digit volume growth continuing regardless of price fluctuations. Interestingly, there is a growing preference for products in premium-plus pricing, which accounts for approximately 40 per cent of FMCG sales and 30 per cent of tech durables sales, both experiencing significant growth," it said. 

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The report also added that festive seasons and peak shopping periods remain key for the FMCG and tech durables sectors.  These periods "contribute 20 per cent of incremental sales for FMCG and 60 per cent for tech durables.

Non-food categories, in particular, grew 1.8 times faster than food during these periods, driven by deep discounts and consumer preference for non-essentials," it added. It also highlights the challenges large companies face, from small manufacturers to private labels from retailers, that are gaining traction. 

"Private labels are growing 1.5 times faster than large manufacturers, particularly within the mainstream pricing segment. On the other hand, small players are driving 70 per cent of new launches in modern trade, focusing on natural ingredients and luxury pricing that is more than 200 times the category average price," it said.

Earlier, Nielsen said India's FMCG volumes grew 3.8 per cent in the June quarter, slowing down sequentially and year-on-year. Rural growth outpaced urban demand for the second consecutive quarter.

The report also noted the shift towards smaller packs at MT channels. "While large packs have traditionally dominated modern trade, there is a noticeable shift towards smaller pack sizes, which are now growing at double the rate of large sizes," it said.