New Delhi: Consumer intelligence company NielsenIQ (NIQ) has published a report titled ‘Elevating Value – Navigating Premiumization Trends in India,’ which shows almost half of all sales on digital platforms are from premium brands. It states the prosperity of modern trade because it is growing twice the rate of traditional channels. The report highlights the importance of premium brands in Fast-Moving Consumer Goods (FMCG) and Tech and Durable Industries.
According to the report, the premium FMCG’s growth is more organic than driven by price. It also states that the consumption volumes are increasing at almost twice the pace of the rise in price. Consumers are opting for premium brands at homecare and are increasingly accessing processed foods categories, resulting in their strong growth.
The report states that the rate of growth of FMCG brands is twice the rate of non-premium brands, due to a rise in incomes, urbanisation, and greater usage of smartphones. It also says that compared to larger industry players, emerging brands or smaller manufacturers are growing at a faster rate in the premium and luxury product segment. The report points to the fact that this growth, driven by volume, shows a shift towards higher-quality products. It is particularly noticeable in segments like homecare and personal care where products of wellness and health are gaining traction. The sales of premium brands are highest in the South Zone while the West and East are growing the fastest.
As per the report, more than 70 per cent of consumers in Urban India are willing to pay a good price for those products that last longer. The category that is growing the fastest is the luxury FMCG Brands, with those whose prices are over twice the category average seeing remarkable success. The FMCG industry in India is facing the challenge of achieving double-digit growth. But premium segments are achieving double-digit growth across markets.
Today, more and more consumers are opting for premium brands, and are focusing on health and wellness while buying products for home and personal care. They are opting for products which are free of chemicals, have proven benefits and are of superior quality, and these are driving the growth in those categories.
