India’s FMCG sector is likely to revive from sluggish growth of 2014 following a decline in inflation rates, says a Nielsen report. Commenting on the matter, Nielsen India Region President Piyush Mathur, said, "The inflation in the country has fallen to single digit from double-digit it used to be until sometime back. This has paved the way for the revival of the FMCG sector."
“The growth in FMCG sector was a tepid 7 percent in the just concluded calendar year, a steep decline from 18-19 percent clocked in 2010-11,” he added.
“The FMCG sector is coming back slowly. The volume growth story will come back because of lower inflation in the next couple of years. We hope growth in the FMCG sector will be 10 percent during the current calendar year and 12 percent in 2016,’’ Mathur added. Further he said, “The sense of uncertainty prevailing among consumers during the past few years was responsible for the muted growth in the key segment.”
"For the last couple of years, we had a bit of double whammy where consumers were concerned about their job prospects. They (people) were not sure of the economy versus high inflation (equation)."
So, while they were battling high inflation, they were also not very much confident of what was in store for them from job perspective. There was a flat growth in volumes in certain categories of FMCG and even negative growth in some others during the past couple of years. Besides, the growth will be faster in the rural areas as compared to urban ones during the months to come, he said, "The rural parts of the country are growing faster than the urban parts when it comes to consumerism."