New Delhi: The rural-urban divide in the fast-moving consumer goods (FMCG) market will continue to grow wider in the coming months, a report by Economics Times stated. The demand for FMCG products in rural areas appears to be outpacing the demand in urban cities as inflation-hit consumers are cutting back on discretionary spending, it added.
Taking the case of two FMCG majors, Marico and Dabur, the report found that the general trade is still under pressure amid mixed trends across mass and premium urban segments. As a result, it is expected to drag down the volumes of the fourth quarter (Q4) of 2024-25.
As per the report, Marico, which owns brands like Parachute and Saffola, in their quarterly update said that the consumer sector has experienced stable demand trends and volume pick-up in the three-month period ended March 2025. This is primarily attributed to the improving trajectory in rural markets.
Marico expects volumes to pick up further as the stress on wallets ease with seasonal moderation in copra prices from their current unprecedented highs.
On the other hand, Dabur expects flat consolidated revenue growth in the January-March quarter amid a delayed winter, continued urban slowdown and weakness in general trade, the report stated.
Dabur added that the Indian FMCG business is likely to decline in mid-single digits in the fourth quarter.
“Due to the impact of inflation coupled with operating deleverage, we anticipate Q4 operating profit margins to contract by around 150-175 basis points year-on-year,” Dabur said in a statement.
Notably, FMCG stocks were trading lower on Friday morning. While the NSE Nifty50 index was trading 267.95 points down at 22982.15, the 30-share BSE Sensex was down 692.87 points at 75602.49 at 10:09 AM, as per ET.
In other news, the All India Consumer Products Distributors Federation (AICPDF) has sought a meeting with the management of major FMCG players on April 30 to address ‘market imbalances’ as the “deep discounting” of e-commerce players were disrupting the level playing field.
