Mass Consumption Falters in India Despite Festive Season and Tax Cuts
While premiumization trends are gaining significant traction across Indian markets, mass consumption continues to face persistent challenges. Industry executives revealed during recent Q3 earnings calls that the December quarter failed to deliver a substantial boost in mass discretionary spending, even with festive celebrations and government tax reductions in play.
Apparel and Jewelry Sectors Face Particular Pressure
From apparel to jewelry and food products, companies are encountering difficulties in encouraging entry-level and middle-class consumers to increase their expenditures. In the jewelry sector, soaring gold prices have created an additional obstacle, but the broader issue extends across multiple categories.
"We had expected a stronger demand pickup during GST reduction," explained Kavindra Mishra, MD & CEO at Shoppers Stop. "While there was a visible spike immediately after the reduction, that momentum did not sustain beyond the initial period. The broader uplift we were anticipating did not really play out over the rest of the quarter."
Mishra noted that the value segment experienced a particularly challenging quarter with muted demand conditions prevailing across the market.
Jewelry Brands Adapt to Changing Consumer Behavior
Tanishq, the prominent jewelry brand, is observing significant pressure in the sub-Rs 1 lakh segment for both gold and studded jewelry. With a substantial portion of their customer base falling within the sub-Rs 1-lakh and Rs 50,000 categories, the company is intensifying marketing initiatives to attract these consumers back to physical stores.
"A lot of efforts from our side to keep jewelry accessible has really been top of our mind," emphasized Arun Narayan, CEO of the jewelry division at Titan Company.
Entry-Level Price Points Experience Slower Demand
Karthik Yathindra, CEO at Page Industries, which holds exclusive licensing rights for Jockey and Speedo brands in India, reported that demand has been notably slower at entry-level price points. The general trade business has proven more challenging compared to e-commerce platforms and exclusive brand outlets.
"There is some level of shift happening within the general trade business in terms of stockholding considering how retailers are dealing with softer demand at the consumer level," Yathindra observed.
Economic Factors Underpin Consumption Patterns
Urban households with low and middle incomes have been experiencing financial pressure, with many experts suggesting that genuine demand improvement will only materialize through wage and income growth. Meanwhile, rural India has been driving FMCG consumption for multiple consecutive quarters.
Market leader Hindustan Unilever recently indicated that although demand trends showed improvement in Q3, rural areas continued to outperform urban markets.
Retailers Shift Focus to Premiumization Strategies
As mass market segments lag behind, retailers are strategically redirecting their attention toward premiumization opportunities. Footwear giant Bata has begun promoting higher price points in display windows and store premises, particularly within major metropolitan areas.
"Premiumization, for us, is not about pushing customers upward," clarified Badri Beriwal, chief strategy & business development officer at Bata India. "It is about adding value across the board, giving them wider choice, and a consistent experience regardless of the price they pay."
Informal Eating Out Sector Shows Limited Growth
Saurabh Kalra, MD at Westlife Foodworld, which operates McDonald's India outlets in western and southern regions, reported that the informal eating out sector has not demonstrated significant growth during Q3.
"In fact, it's remained pretty flattish from what it was in the previous quarter," Kalra stated. While the company has identified some positive indicators in consumption patterns, they remain cautious about declaring a sustained revival until the momentum persists for several additional months.
The overall picture suggests a bifurcated consumption landscape in India, with premium segments flourishing while mass market categories continue to face headwinds despite supportive policy measures and seasonal factors.
