Notes

Urban Consumption. Urban consumers can be advised to spend more on packaged consumer goods and local automobiles which will be able to promote signs of revival in the Indian economy. The Reserve Bank of India, RBI, has noted that if consumption demands start to pick up, indicators such as growth in car sales could be cited. Also, the Central Bank added that the real income due to the lower cost of commodities such as oil could contribute to the rising growth outlook. This can be shown in several urban consumption categories as this method has been carried out before with a success rate of 83%.


As an example, according to research firm Nielsen, the category of consumer packaged goods grew 11% in value just throughout April to June compared to the previous year when our country experienced inflation in 1998 as well as 2009. This was seen as an improvement compared to the growth rate of 7% which was seen in March of the same years.


Across food and non-food categories, growth is broad-based. In the June quarter, the foods category grew by 12% which was 9% in the March quarter. Meanwhile, the non-food category rose to 10.8% which was 7% in the quarter before. “Urban consumption of consumer packaged goods, or CPG, has seen a slight revival and pickup, in line with the improvements in consumer confidence levels. This trend can be seen in categories that are more urban-centric such as chocolates, diapers, sanitary napkins, hair conditioners and deodorants,” said Vijay Udasi, executive director, Nielsen India. These previous successes can be used to determine our pathway in our present time.


In terms of sales, retailers may be able to changes as well. When urban consumption was promoted in 2009, there were reports of volume growth of 10% in the June quarter which was known the be the highest in the last seven quarters. According to Govind Shrikhande, the managing director of Shoppers Stop, all the retail categories inclusive of ladies western wear, beauty and home, are thriving.