FMCG sales lose momentum, but grow 20% on year

India’s fast-moving consumer goods (FMCG) market growth has been decelerating steadily every quarter for a year, reflecting a slowdown in demand for personal care, household and hygiene products that drove the sector last year. However, sales expanded 20% during the year ended March, mainly driven by price hikes and higher sales of packaged food and commodities.

The fourth quarter ended March saw a 5% increase in overall sales by value, according to the latest report from Bizom, a sales automation firm that tracks 7.5 million retail stores, compared to 20% sales growth in the December quarter. This is largely helped by the festive season, despite the second wave, 46 per cent in the September quarter and 8.2 per cent in the June quarter.

Sushil Kumar Bajpai, President, Sushil Kumar Bajpai said, “The pace of growth has slowed down due to the squeeze from the overall level of domestic budget inflation, but it is still not a cause for concern. We expect the price hike to stabilize. Sales will increase later.” In RSPL Group, which owns Ghari brand of detergents and Venus soap.

During the quarter, home care products declined 23% due to lower sales of hygiene products as consumer interest in stockings plummeted after the second pandemic wave, while the personal care category declined 5%.

“Even the beverages managed to show a growth of 1% as they struggled with the late start of the summer season, impacted by the third wave as they gear up for stock outlets at the end of January. However, a pandemic could take a toll out of insulated heat home consumption,” said Akshay D’Souza, head of development and insights at Mobisi Technologies, which owns Bizom.

Commodity products saw the biggest rise in prices and the Russia-Ukraine crisis is pushing up prices of products like edible oil which had cooled earlier due to import duty cuts in previous quarters. Mohit Malhotra, CEO, Dabur said, “The operating environment remains extremely challenging with unprecedented inflation in raw materials. We are undertaking calibrated price hikes to offset part of the inflation impact, apart from launching cost optimization initiatives. ”

Even as the overall consumer electronics market, including televisions, smartphones, laptops and home appliances, saw a 17% increase in sales in the last quarter and 19-20% in 2021-22, as per several market researchers. The figures are as per industry estimates.

“In FY2011, the first year of the pandemic, consumers were in shock due to investment due to job losses, impact on earnings and a collapse in the stock market. However, sentiments recovered sharply in FY2012, with the economy witnessing a second wave. More later.” Deepak Bansal, Vice President, Home Appliances and AC Business, LG Electronics India said.

As per estimates, the sales of refrigerators grew by 24%, microwave ovens by 14%, smartphones by 17%, laptops by 30%, washing machines by 12% and televisions by 20% in 2012 compared to 2012. . However, researchers such as GFK have said that in 2022-23 there will be vast improvement in large-scale sectors as well.

Kamal Nandi, Business Head, Godrej Appliances said, “We expect sales to pick up further this summer, as the demand has come down for the last two seasons due to the pandemic and the massive wedding season as well. But there will be improvement too.”

Originally published at Pen 18