Nearly 68,000 consumer promotions last year, higher by 12,000 over a year ago: Kantar Worldpanel

MUMBAI: The Indian consumer goods market saw more than 21% rise in promotions or freebies last year, helped by goods and services which meant slashed tax rates for most household and grocery items. Companies offered nearly 68,000 promotions in the form of extra grammage or price-cuts in 2017, an increase of 12,000 over a year ago, as per latest Kantar Worldpanel data.
The highest number of promotions were given in three large categories - toilet soaps followed by biscuits and laundry bars - which put together is more than Rs60,000 crore in size. While the research firm said every FMCG buyer has availed at least one consumer promotion in a year, majority of them opted for existing brands instead of trying out newer ones.

"Despite high promotion, we didn't see any co-relation between promotions to brands' sales growth since price-cuts were broad-based across categories and every company was doing it. As a result, it made no impact from a consumer point of view," said K Ramakrishnan, country head, Kantar Worldpanel.

With prices of most groceries, household and personal care products cut after the goods and services tax (GST) implemented on July 1, the overall sector has grown double digit over past year, the highest since 2010.

Several products including cookies, toothpastes, soaps and hair oils were taxed at 18% under GST starting July last year compared with about 22% in the earlier indirect tax structure of excise duty and value-added tax (VAT). Nearly 200 products including detergents, shampoos and skin-care products that continued to attract a higher 28% levy were also included in the 18% bracket in November, triggering another round of price-cuts.