GST cuts slow down FMCG growth in India
India's FMCG sector hit a speed bump in the July-September quarter, as shoppers held off on buying everyday goods, waiting for GST rate cuts that kicked in on September 22.
Volume growth slipped to 5.4% (down from 6% last quarter), with home and personal care items taking the biggest hit.
Value holds up, but shopping habits shift
Even though the pace of sales growth slowed, overall sales value stayed strong—up 12.9%—thanks to higher prices.
Big brands like Hindustan Unilever and Colgate Palmolive had to deal with retailers cutting back on stock and customers pressing pause until prices dropped after the GST changes.
Rural markets shine while cities go digital
Rural areas actually outperformed cities, growing at 7.7% versus just 3.7% in urban spots—smaller towns kept buying even as metros saw more people switch to online shopping.
Despite this bumpy patch, FMCG companies are hopeful things will bounce back as lower prices kick in and everyone adjusts their game plan for the new tax rules.