Local Players Give FMCG Giants A Run For Their Money: Report

Local firms' penetration increased by 4 per cent in laundry bars and 13 per cent in washing powder compared to larger rivals' 0-3 per cent rise

In the September quarter, local and regional businesses reached up to 31 per cent more households in categories like detergent, soap, biscuits, and washing powder. This led to chief executives at leading consumer goods corporations pointing out the impact of smaller brands' comeback on their sales growth.

Latest data from market research firm Kantar shows that local firms' penetration increased 4 per cent in laundry bars and 13 per cent in washing powder compared to larger rivals' 0-3 per cent rise, according to a report by Economic Times.

Smaller businesses expanded by 31 per cent in the soap sector, while national brands had a meek 2 per cent gain. The largest packaged food category, biscuits, saw regional players increase by 22 per cent while larger corporations experienced growth of 10 per cent.

The pandemic-induced disruptions and consequent rise in the cost of essential raw materials compelled numerous companies to cease operations or reduce them.

However, declining commodity costs over the last two quarters have forced smaller regional businesses to increase their operations and lower their product pricing.

In order to pass on the benefits of decreased commodity prices, increase volumes, and compete with local competitors, Unilever really announced last month that it will lower product pricing in India in a few categories, including laundry and soaps.

Leading consumer product businesses have been losing market share to domestic products for a number of years, particularly in the areas of soaps, detergents, hair oil, tea, and biscuits. For example, the rusk industry has over 2,500 local rivals, but over 3,000 smaller or regional companies control nearly 40 per cent of the snacking market.

India's largest consumer products company, Hindustan Unilever, has stated that it is witnessing the comeback of small and regional brands. These brands had previously left the market due to high inflation.

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