Kantar reports optimism as consumers shop 156 times a year

The Kantar FMCG Pulse stated, "While there is economic prosperity, we still maintain caution for FMCG." It said that the FMCG value jumped by 10.2% in FY 24, and even after removing atta, a category which had caused quite a few fluctuations in the FMCG numbers, value growth is at 9.4%.

The report said the rural market is resurgent. It said, "Rural’s growth started trailing urban’s growth since the last calendar quarter of 2022, and urban raced ahead while rural continued to limp its way for most of 2023."

The report pointed to trends like bottled soft drinks which for the first time have breached annual penetration of 50%. The report said, "Following up on a massive 41% household growth in MAT March 2023 the category continued to add more households and expanded 19% in MAT March 2024." The trend is, the average household has expanded its consumption by 250ml in the last two years.

Meanwhile, Fabric Softeners now reach one in every four households in the country. Spends on the category have nearly gone up by 50% in the last couple of years, while consumption jumped by about 180ml. Washing Liquids, another laundry-based category breached the 100,000-ton mark in the year. Growing at nearly 50% in volume terms in the last two years, the category benefitted from an average consumption growth of nearly 500ml in the consuming households.

In terms of consumption metrics, shoppers now shop 156 times a year (once every 2.3 days, or every 56 hours) for FMCG – this could be store or digital shopping. These shopping trips have been growing for quite some time now, barring the lockdown period.

Also, shoppers are no longer buying more packs than they were purchasing earlier. In the last four quarters, the quarterly number of packs purchased had oscillated between 199 and 202. The frequency and the pack trends indicate that shoppers are no longer reducing their pack sizes, but holding on to the ones they are buying. In other words, shoppers are buying slightly bigger packs.

Meanwhile, in terms of household expenses, a typical Indian household spent Rs. 49,418 in Q1 ’24. However, as per the Kantar report, this number is heavily influenced by the larger rural market, where spending was around Rs 41,215 in the quarter. Urban households, in general, spent 1.6 times more than rural households.

Groceries are the biggest household expense, accounting for over 24% of all quarterly expenses in a household. The spending on the category increased by 19%.

BNPL is one of the most popular purchase motivators for an average Indian household. Buy now pay later (BNPL) as it is commonly known, when combined with the EMI schemes that financial institutions offer, makes luxury affordable to the mass market of India. The percentage of people who have taken small loans has increased by over 2.5X compared to pre-pandemic periods, according to the credit rating company, TransUnion CIBILAs per the Kantar report, the steepest jump between the two rounds of the study, is the 87% increase in the EMIs households are paying out.

A major category that has seen a steep jump is medical expenses. These expenses have jumped by a massive 57%. A 2023 report by Insurtech company Plum revealed that India has one of the highest medical inflation rates in Asia. EMIs and medical expenses together occupy 18% of the shoppers’ wallets.

The Kantar report concludes that "the worst of inflation is behind us". However it cautions, "there are pockets of the market that are still under some stress.". The report signs off, "The shopper is looking at the future with great optimism, even those who are under stress, and this optimism has been the flagbearer of the Indian consumption story for long now."