Urban and rural markets have shown a recovery in consumer demand, with rural areas continuing to outpace urban regions in volume growth, according to NielsenIQ. The FMCG industry in India saw 5.7% value-based growth and 4.1% volume growth in the July-September quarter, driven by a 1.5% price increase.

In Q3 2024, urban consumption grew by 2.8%, while rural growth increased to 6%, double the urban growth rate, according to NielsenIQ.

Small and medium FMCG companies rebounded, experiencing faster growth than large FMCG giants, mainly driven by the food segment.

Leading FMCG companies like HUL, Nestle, Dabur, and Tata Consumer Products reported weaker demand in urban markets due to high food inflation.

The urban market accounts for 62-65% of FMCG sales, with the rural market contributing the rest, mostly dominated by food products and smaller offerings.

According to the report, the FMCG industry saw a slight improvement in volume growth in the September quarter. Food consumption grew to 3.4% in Q3’24, up from 2.1% in Q2’24.

Despite price hikes, the increase in volume growth is mainly driven by staple products like edible oils, packaged atta, and spices. In the Home & Personal Care (HPC) category, consumption growth stabilised at 6% in Q3’24, down slightly from 6.7% in Q2’24.

The stabilisation in demand for products like skin cleansers, shampoo, body lotion, and laundry detergents was seen in urban and rural markets. Large FMCG companies continued to perform better than small and mid-sized players.

Small manufacturers recovered from previous declines and grew faster than big companies, largely driven by a sharp recovery in food volume growth.

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