Market research firm Nielsen expects India’s fast moving consumer goods sector to grow 11-12% during calendar year 2019, a tad lower than a year ago period due to higher base. In 2018, the FMCG market grew 13.8% helped by favourable macros such as GDP growth and Inflation as well as manufacturers passing on the benefits of margin expansion coming out of GST regime.
Various farm level initiatives by the government including agri credit and direct subsidy transfer, along with orientation on minimum support prices for crops, is expected to boost farm income further. While the benefits of GST rate cuts have already been accrued, resulting in FMCG manufacturers passing on benefits to the end consumers in 2017- 18, the cascading benefits of GST regime such as supply chain efficiency will continue to boost the bottom line performance in the quarters to come, said the Nielsen report.
“Historical trends around elections in the last few years suggest that FMCG industry demonstrates stable to marginally lower growth in the election year,” added the report.
The researcher said industry growth in Oct-December was 15.9%, led by volume or consumption that contributes to 75% of total value growth. During the GST roll out, rural growth had come down and almost matched urban growth level but has since grown faster. Rural markets continued grew at 18.5% in the quarter – four percentage points higher than growth in urban India. However, there is a reversal in dwindling price-led growth trend and one-fourth of the growth was contributed to price growth, highest in the last four quarters.
Source: ETRetail
