India’s retail and FMCG sector is seeing strong momentum, driven by rural growth and digital transformation. FMCG players are expanding rural reach with targeted distribution and pack sizes as hinterland demand rises. L’Oréal has announced plans to more than double its India business, highlighting the country’s role as a manufacturing and export hub.
Apple, too, is expanding retail presence, leasing an 8,000 sq ft space in Bengaluru for its third India store. Meanwhile, India’s Q4 FY25 GDP growth appears solid but remains heavily reliant on government spending, with manufacturing still subdued.
Retailers are fast adapting to ‘phygital’ strategies, blending in-store and online experiences to meet changing consumer expectations. AI is now powering 50% of new FMCG launches, with significant spikes in categories like packaged food and beverages during peak summer.
Together, these developments reflect a sector that’s becoming smarter, faster, and more customer-focused than ever.
Click on the headings below for insights on how these trends are shaping India’s retail landscape…
1. FMCG firms ramp up rural play
A surge in rural consumption over recent quarters has prompted fast-moving consumer goods (FMCG) companies to ramp up efforts in India’s hinterlands. With urban demand expected to recover more gradually, leading FMCG players are expanding their direct distribution networks in rural areas, aggressively launching smaller pack sizes, and undertaking hyper-local promotions to tap into rising rural demand.
2. L’Oreal to more than double India business in next few years, says global CEO
Amid L'Oreal CEO Nicolas Hieronimus also said India is a key strategic market for them and it is one of the world's fastest-growing beauty markets. It plans to more than double its business in India over the next couple of years. The company intends to expand its factories in India, which currently manufacture 95 percent of its products sold domestically and serve as a base for exports to the Gulf region.
3. Apple leases 8,000-sq ft unit in Bengaluru for third India store
Apple leases 8,000 sq ft retail space at Bengaluru’s Phoenix Mall for its third India store, set to open later this year. The 10-11 year lease includes rent of Rs 2.09 crore annually and a 2% revenue share. Apple plans more stores in Pune, Mumbai, and Delhi-NCR, expanding its Indian retail presence.
4. India's GDP growth in Q4FY25 looked strong but hides weakness: Report
India's GDP growth for the January-March quarter of 2024-25 looked strong on the surface, but it hides several weaknesses. The report said the growth is still mainly driven by government spending, especially on construction, while the manufacturing sector remains weak.
5. India’s Retail gets personal: How brands are fast learning what you want
Retail is transforming fast with ‘phygital’ and ‘omnichannel’ as buzzwords, allowing customers to order online, pick offline and vice versa. The trend was discussed in the panel discussion, where speakers analysed the strengths of physical stores and how digital is being used to augment those benefits while bringing in cost and inventory optimisation for businesses.
6. AI powers 50% of new FMCG launches
As temperatures rise and seasonal demand peaks, a new research report from Sciative Solutions shows how AI-powered dynamic pricing is impacting the FMCG and quick commerce sectors in India. The data indicates a 50% increase in FMCG product assortment, with packaged food and cold drinks seeing an 80% rise in listed products from pre-summer to peak summer.
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