Wednesday, February 1, 2023
HomeEconomyIndia's rural consumption down 15%, growth reduces to less than half of...

India’s rural consumption down 15%, growth reduces to less than half of 2018, says Nielsen

The Nielsen report found that the economic slowdown is worse in northern India, which has a higher dependency on the rural segment and has seen a surge in unemployment.

Text Size:

Mumbai: Sales of fast moving consumer goods in rural India had their slowest growth in seven years as sagging incomes and a broader credit crunch weighed on spending in the country’s hinterland, where the majority of its population lives.

Sales growth of corner-store items from tea to toothpastes dipped to 5% across India’s villages in the quarter ended September, tumbling from 20% last year, according to a Nielsen report released Thursday. Expansion in villages also dropped below urban levels for the first time, dragging the overall growth to 7.3%, less than half of what it was in the same quarter in 2018.

The latest survey points to households across India reducing spending as Asia’s third-largest economy grows at the weakest pace in six years. Carmakers are already facing the worst sales in decades and this week Hindustan Unilever Ltd., the nation’s biggest consumer goods maker, said it wasn’t seeing signs of a revival yet.

Also read: Indian economy heading towards disaster, Abhijit Banerjee said days before winning Nobel

“It’s been a pretty long time since we have seen” rural growth expanding at half that of in urban areas, Sanjiv Mehta, chief executive officer of Hindustan Unilever, said on a conference call with analysts. “A hope is there that things should improve. But at this stage, we are not seeing a sign.”

A Third of the World’s Consumers Are Suddenly Nervous to Spend

The report has also found that the slowdown is far worse in the northern parts of India which has a higher dependency on the rural segment and has seen a surge in unemployment rates.

Growth may recover in 2020, according to Nielsen. Hindustan Unilever’s Chief Financial Officer Srinivas Phatak this week said India’s move to spur a revival may help boost growth.

Also read: Won’t let deficit target worry me right now, India still a fast growing economy: Sitharaman

“We are now finally seeing early signs of the declining trends being arrested,” the Nielsen report said which forecasts growth in consumer goods sales to rebound as high as 8.5% in March next year.- Bloomberg 

Subscribe to our channels on YouTube & Telegram

Support Our Journalism

India needs fair, non-hyphenated and questioning journalism, packed with on-ground reporting. ThePrint – with exceptional reporters, columnists and editors – is doing just that.

Sustaining this needs support from wonderful readers like you.

Whether you live in India or overseas, you can take a paid subscription by clicking here.

Support Our Journalism


Comments are closed.

Most Popular