Customers browse groceries in a supermarket in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Nielsen Forecasts 10.5% FMCG Growth This Year

The fast-moving consumer goods market in India will grow at 10.5 percent in 2018 financial year, according to a report by marketing research firm Nielsen.

The estimate pegs the growth at 330 basis points lower than in the previous year. “I would attribute this to a base effect,” said Sameer Shukla, executive director of Nielsen South Asia. “The growth is decent as it factors in inflation, which was projected between 4 and 6 percent.” (100 basis points equal one percentage point).

The 11.2 percent growth in the quarter ended March was driven by consumption, with rural channels growing at 1.4 times that in urban areas, the report said.

“Promotions will drive consumption in the coming months,” said Shukla. He added that after the downward revision of GST for certain categories in November last year, manufacturers introduced consumer promotions, ramping up consumption.

Nielsen expected the growth to be in high single digits in the quarter through June as shipments by manufacturers will have a higher growth momentum. “The food segment will outperform personal and home care segments.”

“Growth in shipments will be higher than consumer offtake in the coming quarters due to a cyclical nature between the two,” the report said.