E-commerce Gains Ground as FMCG Growth Slows to 7.8% in Q4 2025

Modern trade accelerates while e-commerce captures 18% share in top metros

Illustration depicting the FMCG growth rate at 7.8% for Q4 2025 in India, featuring icons like a shopping cart, factories, currency symbol, and GST logo over a map of India.

Mumbai, March 5, 2026: India’s fast-moving consumer goods (FMCG) sector recorded 7.8% year-on-year value growth in the October–November–December (OND) 2025 quarter, moderating from the stronger momentum seen in the previous quarter, according to consumer intelligence firm NielsenIQ (NIQ).

The slowdown follows transitional adjustments linked to GST 2.0 rate revisions and a high festive base in the previous year, which temporarily softened both price and volume growth across the sector.

“The FMCG industry witnessed heightened activity following the implementation of GST 2.0, with expectations of demand stimulus across categories,” said Sharang Pant, Head of Customer Success – FMCG and Tech & Durables, NielsenIQ India.

“However, early supply chain and pricing adjustments moderated consumption in the OND quarter. Organized retail channels responded faster to these structural shifts, and we expect the consumption benefits of GST 2.0 to become more visible from the January–March 2026 quarter onward,” Pant added.

Nearly 60% of the FMCG portfolio underwent GST rate revisions, triggering pricing recalibrations across manufacturers, distributors and retailers. Traditional trade channels were slower to adapt, leading to temporary supply disruptions and muted growth during the transition.

In contrast, modern trade adapted more quickly, supported by stronger operational systems and faster price implementation. The channel recorded threefold growth acceleration in OND 2025 compared with the previous quarter.

Rural Growth Leads but Urban Gap Narrows

Rural markets continued to outpace urban consumption for the eighth consecutive quarter, though the growth gap narrowed during OND 2025.

  • Rural volume growth: 2.9%
  • Urban volume growth: 2.3%

While rural demand moderated against a higher base, urban markets saw gradual recovery driven by improved metro consumption and stabilizing e-commerce demand.

E-commerce Strengthens Its FMCG Presence

Digital channels continued to expand their share of FMCG sales.

E-commerce now accounts for:

  • 6% of urban FMCG sales
  • 14% across all metro markets
  • 18% in the top eight metros

Quick commerce platforms, which now contribute more than three-fourths of e-commerce FMCG sales, remain the primary growth engine in the segment.

Regional trends also highlight shifting consumer behavior. Southern metros have crossed 21% e-commerce share, while northern and eastern metros are steadily narrowing the gap with modern trade. Western markets continue to be led by modern trade, although e-commerce is gradually gaining share from traditional retail.

Food Outperforms Home & Personal Care

Across FMCG baskets, both food and home & personal care (HPC) categories experienced slower volume growth in OND 2025.

Food consumption performed relatively better, supported by GST-driven price corrections and stabilizing edible oil prices, which helped sustain consumer demand.

The HPC segment recorded 1.9% volume growth, reflecting sharper moderation due to greater exposure to GST-related price adjustments.

Meanwhile, over-the-counter (OTC) categories grew 3.2%, outperforming both food and HPC segments during the quarter.

Smaller FMCG Players Gain Share

Smaller manufacturers continued to outpace the overall FMCG market in volume growth, reinforcing their competitive momentum.

While category volumes moderated overall, large FMCG companies implemented steeper price reductions to align with GST revisions and competitive pressures. Smaller manufacturers, however, demonstrated greater agility in pricing and portfolio adjustments, allowing them to capture incremental demand.