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Consumer Spending Trends in 2023: An In-depth Analysis

Explore the contrasting consumer spending patterns in 2023, with a focus on the FMCG and consumer durables sectors, and how businesses are adapting.

Dheeraj Kumar
22/01/2024

In 2023, the landscape of consumer spending showcased a vivid contrast in patterns, particularly noticeable within the Fast-Moving Consumer Goods (FMCG) sector and the consumer durables market. Urban consumers and innovative sales channels emerged as the primary drivers of sales in the FMCG industry, while the anticipated recovery in rural demand progressed at a slower pace than expected. Similarly, in the consumer durables sector, it was the premium products that predominantly spurred demand, especially during festive periods, aided significantly by consumer financing options.

Segments such as apparel and footwear experienced subdued growth rates, attributed to inflationary pressures and a higher base effect from previous years. According to NIQ India, the FMCG sector saw a slight uptick in rural volume growth during the March quarter, marking a positive change after several quarters of decline. However, urban growth outpaced rural growth, with a notable difference in the September quarter.

Despite the festive season, rural demand remained lackluster, with branded commodities facing stiff competition from smaller, regional brands. This has led to supply chain issues and increased inventory levels. Major FMCG companies are now reducing prices to regain market share from these regional and unorganized players, with hopes that rural demand will pick up due to factors like Minimum Support Price (MSP) increases and election-related spending. They are also focusing on launching premium products and new items to attract consumers.

Leaders in the FMCG industry, including Saugata Gupta of Marico Ltd., Mohit Malhotra of Dabur India, and Aasif Malbari of Godrej Consumer Products Ltd., have expressed optimism for the future, citing an improving economic outlook and lower commodity price volatility. They highlight the importance of premium products and e-commerce platforms in driving future growth.

In the consumer durables segment, Indian consumers are opting for high-end televisions, washing machines, and refrigerators, driven by a desire for energy efficiency and advanced features. The World Cup season, coinciding with festive sales, further boosted the demand for panel TVs. Retailers, however, reported mixed results during the festival season, with premium segments performing better than others.

Conclusion: The year 2023 has been a year of contrasts in consumer spending patterns, with urban and premium segments leading the way. As companies adapt to these trends, the role of innovative sales channels and product premiumization will be crucial. In this evolving landscape, Probz.ai stands out as an AI-powered platform offering both qualitative and quantitative insights, helping businesses navigate through these changing consumer preferences effectively.

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Dheeraj Kumar

data specialist

Archit has been working in the field of data science since 2018. He has worked with various clients in the field of healthcare, education, and finance. He has worked with various clients in the field of healthcare, education, and finance. He has worked with various clients in the field of healthcare, education, and finance.

Member since Mar 15, 2021

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