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The festive season in India is a crucial time for the Fast-Moving Consumer Goods (FMCG) sector. Despite the economic pressures in 2024, such as inflation and rising input costs, the sector is preparing to maximise opportunities during this festive period. From Navratri to Diwali and beyond, the festive season often accounts for a substantial portion of annual sales, with some categories like snacks, sweets, beverages, and personal care products seeing significant demand spikes. This year, companies are optimistic and increasing their festive budgets to attract consumers despite the economic challenges.
In 2024, the FMCG sector is projected to grow by about 7-9 per cent, driven significantly by festive season sales. According to data from Nielsen, the festive season can boost FMCG sales by 20-25 per cent compared to other months. This year, companies are focusing on value-driven promotions and strategic marketing to encourage spending, as inflation affects household budgets. Surveys have indicated that over 60 per cent of consumers are likely to base their festive purchases on discounts and offers, making competitive pricing crucial for success.
Marketing expenditures are a key area of focus, with industry estimates suggesting a 10-15 per cent increase in advertising spending in 2024 compared to the previous year. A significant portion of this investment is directed towards digital platforms, including social media, influencer partnerships, and targeted online advertisements to connect with consumers. This shift reflects the growing importance of digital engagement in reaching a wider and more diverse audience during the festive season.
Promotional strategies such as discounts, bundled offers, and special festive packs are central to attracting consumers who are more cost-conscious this year. Although input costs have risen by 8-10 per cent, many brands are opting to absorb some of these costs to keep their products competitively priced. Industry reports suggest that promotional activities are expected to increase by 12 per cent in the 2024 festive season, with brands focusing on offering value to consumers through attractive deals on essential and gifting items.
Innovation remains a priority as companies introduce new products tailored to festive needs. In 2024, there has been a noticeable trend towards healthier and premium offerings, such as sugar-free sweets and snacks made from natural ingredients. Over 35 per cent of new FMCG product launches this year have focused on health and wellness, catering to the growing demand for more thoughtful consumption choices. This trend reflects a shift towards products that align with changing consumer preferences for healthier options during the festive period.
Ecommerce continues to be a significant growth driver for the FMCG sector in 2024. Online FMCG sales are expected to grow by 30 per cent during the festive season, propelled by the convenience of online shopping, exclusive deals, and quicker delivery options. Major e-commerce platforms are reporting a substantial increase in festive-related FMCG sales, with some projecting a 20-25 per cent rise in consumer spending compared to the previous year. The use of data analytics helps brands better understand consumer behaviour and personalise their offerings, making marketing campaigns more effective.
Rural demand, which had been subdued in previous years, is expected to pick up in 2024, contributing positively to overall FMCG growth. Reports indicate that rural FMCG sales have grown by 8 per cent in the first half of the year, supported by improved agricultural income and various government initiatives. Companies are expanding their distribution networks and tailoring products to meet the unique needs of rural consumers, who are increasingly participating in festive spending.
Despite these positive trends, the FMCG sector still faces challenges such as supply chain disruptions and fluctuating input costs. To mitigate these issues, many companies are investing in supply chain technology and diversifying their sourcing strategies. Recent studies have shown that FMCG companies implementing these efficiencies have managed to reduce operational costs by up to 10 per cent, helping them maintain product availability and competitive pricing during the festive rush.
The FMCG sector is navigating the economic challenges of 2024 with a strategic focus on maximising the festive season. By increasing marketing spend, launching innovative products, offering attractive promotions, and strengthening their digital presence, companies are working to connect with consumers despite economic pressures. The resilience and adaptability of the FMCG sector continue to drive growth, playing a critical role in India’s festive economy.
