Robust consumption growth of 9.3% seen in H1

Mumbai, Jan 03: CMS Info Systems has revealed key consumption trends in organized retail segment in the first half of FY24, through a comprehensive analysis spanning 11 consumer-facing sectors, such as large format retail, jewelry, FMCG, e-commerce, hospitality, and aviation, among others.

Retail Consumption Trends by CMS is a macroeconomic indicator of retail purchases based on the cash collected & processed from 52,000+ organized retail touchpoints across India. It provides a view into consumers’ spending trends as seen in FY24 compared to FY23, which included the Cricket World Cup event, festival, and wedding season. The analysis takes a closer look at consumer preferences through the demographic lens, offering trends into consumer behavior in the country by measuring in-store and online retail purchases across various sectors.

In the B2C segment, retail consumption witnessed an annual increase of 9.3% in the key 11 sectors, during the April–September 2023 period. The FMCG and E-commerce sectors experienced an annual increase of 26.2% and 19.4% respectively, during Q2-FY24, reflecting rising consumer demand in these sectors amid easing inflation. The Aviation and Hospitality sectors saw annual growth of 29.7% and 12.8% in Q2-FY24 respectively, reflecting increased demand for travel, driven by large events such as the Cricket World Cup. The jewelry sector saw an annual growth of 7.1%, in contrast to a 4.6% decline in Q2-FY23, suggesting higher spending triggered by the wedding season and endorsing post-pandemic demand bounce-back. The large format retail sector experienced an annual increase of 7.8% in Q2-FY24, driven by factors such as rising incomes, urbanization, and changing consumer preferences.

From a demographic perspective, Metro cities which had grown the fastest from Q2-FY23 to Q1-FY24, were outpaced in H1 FY24 by SURU (semi-urban and rural), which saw the fastest consumption growth of 9.2% YoY, triggered by improved discretionary spending and demonstrating tailwinds in the rural economy.

CMS Cash Index™ (CCI) has proven to be a very powerful indicator to track commerce transactions by consumers and has been referred to by various policymakers as well,” said Anush Raghavan, President, Cash Management Solutions at CMS Info Systems. “The surge in retail consumption parallels the 7.6% GDP growth in the Q2-FY24, boosted by easing inflation. Taking cues from these macroeconomic indicators, we expect a stronger consumption growth in Q3-FY24, especially in FMCG, e-commerce, and aviation sectors, he added."

These Retail Consumption Trends shed light on consumer behaviors and evolving consumer preferences while uncovering compelling patterns and trends that support India’s retail consumption story.