Saturday, November 23, 2024

Rural, small town sales buoy consumer majors

Thursday, July 1, 2021, 1:26
This news item was posted in Business category and has 0 Comments so far.

Several top consumer goods makers said rural and small-town sales made a recovery in June, belying fears that these markets will take longer to pick up after the second wave that led to infection rates spiking in these areas too.Buoyant rural sales, along with the gradual opening up of markets and pent-up demand in cities, has helped several top companies such as Parle Products, Amul, Dabur, Emami, Xiaomi, Realme, HP and Panasonic clock 5-15% year-on-year growth in revenue in June, industry executives said. This is despite almost a third of the markets having been shut for most of the month due to the cautious easing of curbs.With several states lifting restrictions and local markets opening up, consumer demand is showing a sequential uptick, said Dabur India chief executive Mohit Malhotra. Rural markets will make a V-shaped recovery with the vaccination drive picking up pace, the government announcing stimulus measures and the monsoon expected to be normal, he said. 84007148“Overall, demand growth is coming back to near-normal levels now, as the drop in Covid cases has boosted consumer sentiment,” said Malhotra, adding that the healthcare portfolio – chyawanprash, honey and immunity-building products – is doing particularly well in rural markets.Emami director Mohan Goenka said sales have recovered in rural markets, helping the company clock growth in June.Dependent on good monsoon“Things could have been better if the wholesale markets were fully operational,” said Goenka. “While we are relying on a good monsoon, there is still fear among rural consumers after the severe impact of the second wave and (with) several (workers) yet to migrate back to cities, (it’s) impacting remittances back home.”Rural and small-town markets are particularly important for the fast-moving consumer goods (FMCG) industry since they contribute 55-60% to sales and drove growth after the first wave at more than twice the pace over urban areas, due to lower infection rates.Parle Products clocked low single-digit year-on-year growth in June despite April-June last year has been one of the biggest sales quarters for the country’s largest biscuit maker, said senior category head, Krishnarao Buddha. “There are no visible signs of a slowdown in consumption and July prospects should be better due to the monsoon, unless infection rate surges again,” he said.The country’s largest dairy brand, Amul, clocked a 15% growth in year-on-year sales in June.

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