India's fast-moving consumer goods (FMCG) market growth has been tapering off consistently every quarter for a year, indicating subdued demand for personal care, home and hygiene products that drove the sector last year. Sales, however, expanded 20% during the year ended March, mainly driven by price hikes, and higher sales of packaged food and commodities.

The fourth quarter ended March saw growth of 5% in total sales by value, according to the latest report by Bizom, a sales automation firm that tracks 7.5 million retail stores, compared to a 20% sales rise in the December quarter, largely helped by the festive season, 46% in the September quarter and 8.2% in the June quarter despite the second wave.

"The speed of growth may have come down due to household budgets getting squeezed from an overall level of inflation, but it is still not a matter of concern. We expect sales to pick up once price hikes stabilise," said Sushil Kumar Bajpai, president at RSPL Group, that owns Ghari brand of detergent and Venus soap.

During the quarter, home care products declined 23% due to lower sales of hygiene products as consumer interest in stocking waned after the second pandemic wave, while the personal care category fell 5%.

"Even beverages just about managed to show growth at 1% as they had to contend with a late start to the summer season, impacted by the third wave just as they were getting ready to stock outlets in late January. However, a pandemic insulated summer can spur out of home consumption," said Akshay D'Souza, chief of growth and insights at Mobisy Technologies, which owns Bizom.

Commodity products saw the highest growth driven by price increases and the Russia-Ukraine crisis is further driving up prices of products such as edible oil that had cooled down earlier on the back of import duty cuts in preceding quarters. "The operating environment remains extremely challenging with unprecedented inflation across raw materials. We have been undertaking calibrated price increases to offset part of the inflation impact, besides rolling out cost optimisation initiatives," said Mohit Malhotra, CEO at Dabur.

Even the overall consumer electronics market including televisions, smartphones, laptops and home appliances saw sales growth rise by 17% last quarter and slightly higher at 19-20% in 2021-22, as per industry estimates based on data from multiple market researchers.

"Consumers were in a shock in FY21 due to the first year of the pandemic, job losses, impact on earnings and investment due to stock market crash. However, sentiments improved rapidly in FY22 with the economy, more so after the second wave," said Deepak Bansal, vice-president, home appliances and AC business at LG Electronics India.

As per estimates, refrigerator sales grew by about 24%, microwave ovens by 14%, smartphones by 17%, laptops by 30%, washing machines by 12% and television by 20% in FY22 over FY21. However, researchers like GfK have said there will be a widespread recovery even in mass segments in 2022-23.

"We expect sales will grow further this summer due to pent-up demand of the last two seasons lost due to the pandemic and mass segment will further recover too with marriage season around the corner," said Godrej Appliances business head Kamal Nandi.