India dominates APAC with double-digit growth across FMCG, tech, durables: NielsenIQ report

According to the report, 41 percent of surveyed urban Indian shoppers see a product online but purchase it in-store. Despite inflationary pressures, modern trade has shown resilience, with double-digit volume growth continuing regardless of price fluctuations.

Highlighting India's dominant position, a report by consumer research firm NielsenIQ (NIQ) says that it is the only market consistently delivering double-digit growth in the Asia-Pacific region in FMCG, and tech and consumer durables (T&D). The report states that resilience and evolving preferences of Indian consumers are among the key drivers.

The report titled ‘Full View of Modern Trade Retail Trends’ released on August 21, also highlighted  the importance of modern retail, and said that premiumisation was a growth driver.

According to the report, 41 percent of the urban Indian shoppers surveyed look up a product online but purchase it in-store.

Despite inflationary pressures, modern trade has shown resilience, with double-digit volume growth continuing regardless of price fluctuations, noted the report. Underscoring the importance of modern trade as a channel for marketing and sales, NIQ data for March 2024 versus March 2023 shows that FMCG sales in modern trade rose 2 percent in urban India, whereas T&D sales saw a 4 percent increase.

Per NIQ's data, festivals are a major driver for modern retail, contributing 20 percent of incremental sales for FMCG and 60 percent for T&D.

“Non-food categories, in particular, grow 1.8 times faster than food during these periods, driven by deep discounts and consumer preference for non-essentials. Key categories such as toothpaste,  soap, and washing powder lead the charge, clocking 20 to 30 percent incremental sales on big days,” the report noted .

Another driver for modern trade is the premium-plus price segment, which drives almost 40 percent of FMCG sales and 30 percent of T&D sales.

“Many new product launches in modern trade are in the premium-plus space, reflecting growing consumer willingness to pay up to 2X the average price for superior benefits and features,” said Sonika Gupta, Executive Director, Customer Success – India, at NIQ.

The report suggested that brands may consider optimising their offerings in this segment to maintain competitiveness and meet consumer expectations.

The report also noted the increasing popularity of smaller packs, growing at double the rate of large packs, and the rise of private labels and small players in the market. These are contributing to a more competitive modern trade environment, placing significant pressure on shelves that now accommodate over 78,000 items, as per Gupta.  “This trend is evident across both food and non-food categories, offering brands the opportunity to optimise their existing assortment for higher ROI, while also innovating with smaller packs to encourage consumer trials,” she added.

Private labels are growing 1.5 times faster than large manufacturers and small players are driving 70 percent of the new launches in modern trade, focussing on natural ingredients and luxury pricing that is more than 200 times the category average.

Further, the T&D segment is bringing innovative features that appeal to the modern consumer. Due to rising competition and innovation, marketers should remain vigilant as consumers are increasingly exploring new brands offering unique benefits and cutting-edge features, the report added.

“To stay competitive, businesses must strategically optimise their product assortment, ensuring enhanced visibility and maximising ROI from the modern trade channel. That way, brands can effectively leverage the channel's consistent double-digit growth and secure a stronger foothold in this evolving market,” the NIQ report concluded.