BENGALURU: With greater availability of premium brands, tier-1 and 2 cities are emerging as the fastest-growing markets when it comes to modern trade. Nearly half of all sales on digital platforms come from premium brands and modern trade is thriving as it is growing twice the rate of traditional channels, reveals a report by consumer intelligence company NielsenIQ (NIQ) on Friday.
The report titled ‘Elevating Value – Navigating Premiumization Trends in India,’ shows the growth in premium FMCG is more organic than price-driven with consumption volumes increasing at almost twice the pace of price rise. Consumers are gravitating towards premium brands in homecare and processed foods categories, and they have been witnessing strong growth.
“This volume-led growth reflects a shift towards higher-quality products, especially in segments like personal care and home care, where wellness and health-focused products are gaining traction. South Zone has the highest proportion of premium brand sales, while West and East are growing the fastest,” the report said.
Brands that are priced over two times the category average are witnessing significant growth, thus showing how the luxury segment within FMCG stands out as the fastest-growing category. Despite overall FMCG in India facing challenges to achieve double-digit growth, the premium segment consistently grows at double-digit rates across all markets and categories, driving half of the incremental sales for the Indian FMCG industry.