Happy New Year awaits FMCG companies
The FMCG industry in India is set to return to double-digit growth rate next year after a gap of two years on the back of improved consumer sentiment and lower inflation rates, according to leading market tracker Nielsen. Nielsen expects the fast-moving consumer goods market to grow 7 per cent in 2014, 10 per cent in 2015 and about 12 per cent in 2016.
"While India's GDP might not revive drastically and could stay below 6 per cent, we still don't see it weighing down the overall FCMG growth due to better sentiment and lower inflation," said Ranjeet Laungani, vice president at Nielsen India. "Nearly half this growth will be volume-led, indicating favourable real consumption growth," he said.
India's FMCG market has normally been immune to macro-economic pressures, but sales have fallen to single-digit growth since 2013. Worse, volume consumption remained flat and nominal growths came from price increases driven by inflationary pressure. However, the quarter ended September saw a bit of a revival at 7.2 per cent growth compared to 5.2 per cent in the previous quarter. Marketers say things have started looking up since the last two months.