In a significant development, retail consumption in the business-to-consumer (B2C) segment exhibited a robust annual growth of 9.3% across 11 pivotal sectors during the first half of the fiscal year 2023-24, according to a report by CMS Info Systems. The analysis delves into organized retail trends in sectors including large format retail, jewelry, FMCG, e-commerce, hospitality, and aviation, revealing insights into consumer spending dynamics in FY24 compared to the preceding fiscal year.
During Q2FY24, the FMCG and e-commerce sectors saw substantial annual growth, registering 26.2% and 19.4%, respectively. This surge highlights an increasing consumer demand in these sectors, complemented by a backdrop of easing inflation. The aviation and hospitality sectors experienced annual growth rates of 29.7% and 12.8%, respectively, in Q2FY24, indicative of heightened travel demand propelled by significant events like the Cricket World Cup. The jewelry sector demonstrated a noteworthy annual growth of 7.1%, showcasing a rebound in spending attributed to the wedding season and post-pandemic demand recovery. In contrast, the large format retail sector witnessed an annual increase of 7.8% in Q2FY24, fueled by factors such as rising incomes, urbanization, and evolving consumer preferences.
From a demographic standpoint, metro cities, which exhibited the fastest growth from Q2FY23 to Q1FY24, were surpassed by semi-urban and rural areas in H1FY24, showcasing the fastest consumption growth at 9.2% YoY. This shift is attributed to improved discretionary spending and signals positive trends in the rural economy.
Anush Raghavan, President of Cash Management Solutions at CMS Info Systems, emphasized the robustness of the CMS Cash Index (CCI) as a powerful indicator for tracking consumer commerce transactions. The surge in retail consumption aligns with the 7.6% GDP growth in Q2-FY24, driven by inflation easing. Anticipating stronger consumption growth in Q3FY24, Raghavan highlighted sectors like FMCG, e-commerce, and aviation poised for significant expansion.
