An analysis of the fastest growing FMCG manufacturers in India suggests that domestic companies performed better than the MNCs in recent years.
Nielsen India, unveiling its FMCG quarterly report for the quarter ended June 30, forecasts that the sector is set to clock 12-13 per cent growth over the July-December period in value terms and close to 8 per cent by volume in 2018. This will fall short of the previous year’s value growth rate of 14 per cent and volume growth of 10 per cent.
The research agency pointed out that during the April- June quarter retail stocks jumped to levels higher than the pre-demonetisation period.Also, modern trade channels have witnessed a bounce- back and the sector saw 10 percent of sale come from this channel.
Incremental growth in rural markets, compared to urban areas, continued to rise during the past one year. The rural market is growing at 28 per cent higher than the urban one.
Nielsen report also noted that Indian FMCG companies are gaining over their multinational counterparts. While in 2016, seven out of the top 10 fastest-growing companies with revenue of over Rs 10 billion were Indian, now the number has surged to nine.
Domestic firms’ agility in innovation and their go-to-market attitude are holding them in good stead, according to an executive from Nielsen, a global measurement and data analytics company. Providing a future perspective, the agency has said an increase in the minimum support price (MSP) of key rabi and kharif crops, coinciding with the festive season, is likely to provide a significant boost to recovering farm income.
Sameer Shukla, Executive Director, Nielsen India said, “When we looked at the big manufacturers with more than ₹1,000 croreofftake, we noticed that of the top 10 fastest growing manufacturers, nine were companies of Indian origin. This number has increased from seven in 2016 to nine in 2018. And a majority of the fastest growing companies are food companies.”
“Local giants are seen to be more agile in reacting to market trends and coming up with products catering to the local market. However, multinationals tend to differ on this aspect,” he added.
Moreover, as the rural-to-urban growth differential has picked up again, with wholesale channels bouncing back, “local giants appear to be stronger in the rural market”, he observed. “With rural markets growing faster than urban markets, domestic FMCG firms are spreading their reach.” added Shukla.