Whalesbook
Urban Market Share Shift
Leading fast-moving consumer goods (FMCG) companies are witnessing a decline in their urban market share, according to K Ramakrishnan, Managing Director - South Asia at Kantar's Worldpanel division. This loss is occurring despite a general rise in overall urban consumption, with smaller and unbranded players gaining traction at the expense of established listed firms. Concurrently, demand in rural areas is showing signs of improvement, driven by broader economic factors.
Consumer Sentiment and GST Impact
Consumption sentiment in India improved notably in the third quarter, bolstered by recent government actions and the festive period. Ramakrishnan indicated that most policy groundwork is complete, and the next phase hinges on consumer response over time. However, the direct impact on FMCG purchasing is still unfolding gradually, as the pricing adjustments stemming from changes in taxation and the goods and services tax (GST) are moving slowly through the supply chain.
Volume Growth and Outlook
Kantar's household-level data reveals a quarterly pickup in FMCG volumes from September onwards. Sector growth has accelerated from approximately 3.75–4.2% earlier in the year to around 4.75–5% in recent months. Ramakrishnan expressed confidence that annualised growth, while yet to surpass last year's figures, is expected to improve significantly in the coming quarters. He anticipates growth will likely exceed 5% as revised pricing strategies and pack sizes become more widely available to consumers.