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Indian consumer goods sales growth slows

Growth in sales in India of fast moving consumer goods slowed to just 3.3 per cent in the January-March quarter from a year earlier, a domestic daily reported on Friday.

The Economic Times, citing data compiled by market researcher ORG-Marg, said that meant the growth of sales in the sector -- which includes branded foods and beverages, soaps and detergents, and some healthcare products such as toothpaste -- fell throughout the past financial year to March.

From a year-on-year increase of 11.5 per cent in the past April-June quarter, the growth rate slowed to 8.6 per cent in July-September and to 4.3 per cent in the October-December quarter.

It attributed the sustained slowdown to actual declines in sales in some major product categories, notably soaps and tea. It said soap sales had fallen 2.1 per cent in the past quarter on year, and tea sales by 6.9 per cent.

Sales had fallen because of a slump in rural demand, which was forcing companies like industry giant Hindustan Lever, India's biggest company by market value, to rethink its strategy of trying to "penetrate the remotest villages" to boost sluggish revenue growth.

"An inadequate distribution system, poor infrastructure system, the drought gripping parts of India, and tough competition from local brands in the rural market are forcing FMCG companies to rework their marketing strategies," the newspaper said.

It said Hindustan Lever's sales of toilet soaps had fallen 6.2 per cent, its sales of edible cooking oils by 10.6 per cent, and its sales of packaged tea by 13.1 per cent in the past quarter.

It also said the sales of Tata Tea, India's largest tea producer, had slid 7.3 per cent.

It noted, however, declines in commodity prices had contributed to the slide in revenue from sales of such items as tea and edible oils.

"The fact that the growth of the fast-moving consumer goods industry is still in positive territory is largely due to products like skin cream (growth of 11.6 per cent), beverages (7.8 per cent), shampoo (13.3 per cent) and also scourers (17.3 per cent)," the report said.

It added sales of chocolate and coffee also had risen strongly in the past quarter.

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