Rural demand, price hikes power India consumer goods sector growth, NielsenIQ says

AWL Agri Business

06/02/2025 05:00

Feb 6 (Reuters) - Solid demand in rural areas, as well
as higher prices of staples including edible oil and wheat
flour, helped the consumer goods sector report a 10.6% sales
growth in the December quarter, market researcher NielsenIQ said
on Thursday.
    India's rural areas - which account for just over a third of
consumer goods sales - have proven a bright spot for an industry
struggling with an inflation-led spending slowdown in large
cities.
    "Rural markets (continued) to lead the charge, outpacing
urban consumption (during the December quarter)," Roosevelt
Dsouza, head of customer success for consumer goods at
NielsenIQ, said in a statement.
    Sales volume jumped 9.9% in rural areas in the December
quarter, up from 5.7% in the previous quarter - double the 5%
increase in urban centers, NielsenIQ said. But it added urban
pockets also improved from the September quarter's 2.6% growth. 
    Rural areas have outperformed urban locations for the last
four quarters, benefiting from income support schemes rolled out
by several Indian states, while slowing salary increases in
cities have squeezed consumer spending.
    In the October-December quarter, overall volume rose by 7.1%
- the highest in over a year - driven by demand for laundry
products and edible oil, even as prices rose by 3.3%, according
to NielsenIQ.
    Dabur India  DABU.NS  and Hindustan Unilever  HLL.NS 
reported a higher December-quarter profit on recovering rural
demand.
    However, large consumer goods makers, with topline exceeding
50 billion rupees ($571.2 million) are also facing stiff
competition from smaller rivals, whose sales increased roughly
twice as fast during the festive quarter, NielsenIQ said.
    Consumer goods makers have also raised product prices to
counter price increases in commodities such as copra and cocoa,
with cooking oil maker Adani Wilmar  ADAW.NS  and Hindustan
Unilever warning of further hikes.
    Indians also preferred smaller product packs during the
quarter, NielsenIQ said, echoing comments from Hindustan
Unilever.

($1 = 87.5400 Indian rupees)

 (Reporting by Praveen Paramasivam in Chennai; Editing by Eileen
Soreng)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))