The Chief Executive Officers at the FMCG companies and the market research firms are again at loggerheads. This time it is over what is the accurate measure of the existing growth in consumption.
The data from Nielson suggests that the industry is facing a sturdy revival now in comparison to that of the last year. In fact, in the last year, the industry experienced the slowest development in a decade. The data estimates that the FMCG sales have witnessed a growth of 11.8 percent in nine months between January and September this year. In the same time period in 2014, the growth was only 6.8 percent.
Contradictorily, the FMCG companies’ CEOs dismiss these estimates claiming these are faulty. They argue that the market researcher is overrating the growth and the price cuts are not captured accurately.
Commenting on this, Sunil Duggal, the CEO of Dabur stated that there are no indications of improvement right now and the market is not encouraging demand revival. He claimed that with only two weeks to Diwali, there seems to be no uptick in the consumption, and the outlook does not seem to be challenging.
On Wednesday, Dabur reported 5 percent domestic volume growth in the third quarter of the year. But, an increase of 18.7 percent took the consolidated net profit to Rs 341 crore.
In this time period, the companies such as Jyothy Laboratories, Dabur and HUL reported sales growth that is lower than the same in the previous year. There is a slight improvement in the revenue growth of Godrej Consumer Products, but that was an exception. The other companies have not announced their results of the last quarter.
Nielson and the consumer goods companies have had a bad relationship for over five years. The issue started in 2009 as HUL first disputed its data that was contradicted by Nielson.
