South India pulls clear in online FMCG adoption, says Nielsen report

Nielsen report states southern metros led with an 18.4% share

In the April–June quarter (Q2) of calendar year (CY) 2025, southern metros recorded a higher share of fast-moving consumer goods (FMCG) sales in e-commerce compared to other metros, NielsenIQ (formerly Nielsen) said in its quarterly report.

 

According to the research firm, e-commerce kept its upward pace in the quarter ended June, gaining ground on modern trade in eight metros. Southern metros led with an 18.4 per cent share, compared to 15.8 per cent across the eight metros.

 

“Even though e-commerce accounts for just 11-13 per cent of FMCG value share in metros, it’s already delivering more than half of omnichannel growth. Despite the pullback of quick-commerce dark stores, Q2 CY 2025 saw e-commerce consumption surge, driven by higher shopper penetration and consistent spending, even among new shoppers,” the report said.

 

India’s FMCG market grew 13.9 per cent in value in April–June CY 2025, supported by sustained rural demand and steady urban recovery, according to NielsenIQ.

 

Volume growth for the quarter was 6 per cent, while prices rose 7.4 per cent. Unit sales outpaced overall volume growth as consumers continued to opt for smaller packs.

 

Rural demand for consumer goods has outpaced urban demand for six straight quarters, rising 8.4 per cent compared to 4.6 per cent growth in urban markets. 

 

“However, the gap is narrowing as urban areas show signs of sequential recovery. This resurgence is primarily driven by smaller towns, while metropolitan areas continue to experience a decline in consumption due to channel shifts,” NielsenIQ said in its release.

 

Sharang Pant, head of FMCG customer success at NielsenIQ India, said in the release: “The Indian FMCG sector continues to demonstrate resilience, with rural markets leading the charge for six consecutive quarters. While urban recovery is gaining traction, particularly in smaller towns, rural demand remains the cornerstone of volume expansion. E-commerce is emerging as a key growth engine, especially in the top eight metros.”

 

He added that with inflation easing and a favourable monsoon forecast, the outlook for consumption remains optimistic. However, sustaining this momentum will require deeper channel engagement and sharper, value-led propositions.

 

“The industry is entering a phase where agility and consumer-centric innovation will be critical to future success. The rapid rise of small manufacturers, outpacing overall industry growth, underscores shifting market dynamics and intensifying competition,” he said.

 

In the quarter, food consumption was stable at 5.5 per cent, driven by increased volumes in staples and impulse categories. Home and personal care saw faster growth at 7.5 per cent. Over-the-counter categories recorded a 14.2 per cent jump in value sales, mainly due to an 11 per cent rise in prices.