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In the fiscal year 2023 ended on March 31, sales of daily necessities, groceries, household, and personal care products increased by 8%, whereas sales of electronic products experienced a significant surge of 25%. This growth was aided by a gradual rebound in the final quarter, following a period of decline or stagnant growth during the earlier months of the financial year.
The industry executives and Bizom, a company that analyzes data based on orders at kirana stores, have reported that the sales growth for fast-moving consumer goods was 18% and for electronics and durables it was 30% the year before. This significant growth can largely be attributed to the previous year’s low base caused by Covid-19 restrictions and lockdown.
Vijay Chaudhary, the managing director of Unicharm India, has stated that based on last year’s trend, there is a possibility of sustained consumption this year, and it’s not impossible to achieve double-digit growth given consumers’ positive outlook.
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Furthermore, during the fiscal year, beverage sales experienced a growth of 24%, attributed to the exceptionally hot summer of 2022, while sales of commodity products remained steady at 8%.
According to Akshay D’Souza, the chief of growth and insights at Mobisy Technologies, which owns Bizom, last year’s revenge festivities were relatively subdued due to lower sales caused by inflation throughout most of the year. However, in the March quarter, there were clear indications of a reversal, with sales expanding by 14%, and all categories experiencing double-digit growth.
Companies are anticipating a gradual recovery and double-digit growth in the current fiscal year, as inflation is expected to ease off, which could potentially lead to price cuts in various categories.
According to analysts, the demand for staple products is showing signs of improvement as inflation increases and rural areas experience better performance due to higher crop output and prices. Recovery is expected in categories where price cuts were introduced, leading to a positive outlook for volume growth. Additionally, the recent drop in commodity prices is driving volume-boosting initiatives like promotions, price cuts, marketing, and launching new, smaller packaging sizes. A report by Systematix notes that value and volume growth rates in most categories are converging due to the absence of price hikes and mix improvement.
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Premium Range of Products
Industry executives reported that the sales of electronic goods, including refrigerators, air conditioners, washing machines, and televisions, increased by 20-25% in value during the 2022-23 fiscal year. This growth was fueled by higher demand for premium products and 5-7% price increases during the year. Sales increased by 10-15% by volume are driven primarily by the premium range of products.
Kamal Nandi, the business head of Godrej Appliances, noted that there was strong demand during the summer and Diwali last year, followed by the resurgence in demand from January 2023 onwards, with monthly volume sales improving consistently after the growth.
