FMCG ad spending growth remains muted in Q3 FY 21-22

The Indian FMCG sector is the fourth-largest sector with household and personal care accounting for 50% of FMCG sales in India. As per the Q3 results for FY 2021-22 of India’s FMCG biggies, spendings on advertisement and sales promotion and net profits were toned down by a few major players.

While brands like P&G Hygiene & Health, Marico, Gillette and Emami increased their ad spends, Dabur, HUL and Colgate-Pamolive had to cut down heavily on this front.

Dabur, which spent Rs 282.38 crore on advertising in Q3 FY 2020-21, spent just Rs 237.07 crore on advertising in the corresponding quarter in 2021-22. The Ayurveda major reduced its spendings by 16% in FY 2021-22.

HUL too reduced its ad spends by approximately Rs 200 crore and it came down to Rs 1189 crore in FY 2021-22, as compared to Rs 1388 crore in FY 2020-21, for the third quarter.

Advertising and sales promotion expenses of FY 2021-22 and FY 2020-21

The cumulative ad spends by these brands was Rs 6,292.39 crore for Q3 in FY 2020-21, while for FY 2021-22, it turned out to be Rs 5,616.97 crore, marking a shortfall of Rs 675.42 crore.

The Indian FMCG sector, as predicted by Zenith Media in April 2021, was scheduled to scale new heights with increased ad spends and net profit. As per the report, the Indian FMCG market should have seen a growth of 14% on an yearly basis in its advertising spends.

Net profits for third quarter of FY 2021-22 and FY 2020-21

A report published recently by Dentsu India suggested that FMCG brands are the biggest contributors to advertising spends with 34% share, followed by e-commerce at 14% and automotive at 7%.  

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