Demand surge keeps FMCG, cars, smartphones upbeat on festive season

Car, phone, and FMCG giants gear up for strong sales and demand ahead. (Image: iStock)

FMCG, automobile and mobile phone companies are on track to see brisk business in the upcoming festive season, thanks to factors like a revival in rural demand, softening of raw material prices, higher purchasing power.

One key factor for growth in the FMCG sector will be the increasing consumer preference for larger pack sizes. There has been a noticeable shift in consumer behaviour towards upgrading to medium and high-value packs in key FMCG categories such as beverages, personal care products, and branded items, indicating that consumers are willing to spend more on larger volume of products, possibly because of increased purchasing power and growing confidence in the economy.

Cheaper raw materials have given the room for competitive pricing in FMCG products and their promotions during the festive season. The combination of steady urban demand and an increasingly normal rural market is contributing to the overall positive outlook for the industry. Companies like Jyothy Labs, known for their popular branded products like Ujala, Henko, Margo, Exo, and Pril, are well-positioned to capitalize on this trend and benefit from the surge in demand for their products.

The FMCG sector's performance in the festive season will be closely watched by industry experts and investors as it could have a significant impact on the overall economic outlook for the year.

As the Indian economy retains its growth momentum, car sales have zoomed, setting the stage for a robust demand in the festive season. Maruti Suzuki led the growth with a 6.5 percent rise in sales in July, driven by new products. Although Hyundai and Tata Motors had a month of flat sales, Mahindra & Mahindra, Toyota and MG Motors recorded strong performance with notable sales growth. Toyota achieved its best-ever monthly sales and MG Motors reported a 25% increase in retail sales.

Car makers are bullish about this momentum, and to accelerate the growth, they have lined up offers and new models for the period.

The festive bonanza is making a loud blip in the smartphone segment, too, thanks to better inventory position and a rising demand for affordable 5G handsets. As inflation cools off, consumer spending too is on the rise. To cash on this trend, smartphone brands have invested in promotional initiatives with attractive deals for the festive season.

Market leaders like Samsung and Vivo are likely to maintain their positions, while Xiaomi and Realme are rebounding from their lows. The growing popularity of budget-friendly 5G devices is driving shipment growth further.