India’s Consumer Sector Set For Heightened Growth: Report
New Indian consumers are making value-based choices of convenient, sustainable, healthy and locally manufactured products
Driven by robust domestic demand, improving rural consumption and a thriving services sector, the Indian economy grew at 6.7 per cent in the first quarter of the current financial year (Q1 FY25) despite global economic headwinds. A report has stated that Trends such as premiumisation, sustainability, health consciousness and convenience have brought disruptive models of quick commerce in the retail, fast-moving consumer goods (FMCG), and ecommerce sectors.
Deloitte, in collaboration with the Federation of Indian Chambers of Commerce and Industry (Ficci), unveiled the “SPURring growth in FMCG, retail and ecommerce sectors in India” report at the Ficci Massmerize event.
The report reveals that consumers are shifting towards premium, sustainable and personalised products, prompting companies to innovate and upgrade their portfolios to meet these evolving needs.
“The Indian consumer sector is poised for transformative growth, fuelled by rapid innovation, digital adoption and shifting consumer preferences. This promising trajectory offers immense opportunities for the FMCG and retail sectors to expand and evolve. To harness this potential, collaboration between the government and businesses will play a pivotal role,” stated Harsha V Agarwal, Senior Vice President, Ficci; Vice Chairman and Managing Director, Emami.
The report stated that In the FMCG sector, affluent consumers increasingly opt for larger pack sizes, indicating an uptick in spending capacity, while unaffluent consumers are downtrading. This broader pattern of upgrading is evident in affluent markets, where higher disposable incomes drive a preference for premium goods that offer more value.
In contrast, unaffluent households are pulling back on expenditure, choosing unbranded or more affordable products.
“The consumer industry is a driving force behind India’s economic resilience, with the FMCG, retail and ecommerce sectors serving as its pillars. However, to maintain this trajectory, a strategic partnership between the government and the private sector is essential. We need reforms that directly address inflation control, credit access, and the ease of doing business,” stated Anand Ramanathan, Partner, Consumer Products and Retail Sector Leader, Deloitte India.
As per the report, consumers are increasingly demanding products with minimal and recognisable ingredients. The clean label trend is pushing brands to reformulate products to remove artificial additives and preservatives. The clean-label ingredients market posted a CAGR of 20.7 per cent between 2018 and 2022 and is expected to continue growing.
The report also highlighted that according to the consumer survey, 37 per cent of consumers favour quick commerce over traditional ecommerce for food and beverages, as impulse purchases or immediate needs often drive these items. Driven by urbanisation and rising consumer expectations, the quick commerce market is projected to grow significantly.
