Wipro Consumer Care & Lighting said weak trader sentiment in the second quarter has led to rural markets growing at a slower pace than urban markets.
“There is a slowdown, but the bigger issue is at a trade level as they have reduced stocking at a significant level in the last three months,” Vineet Agrawal, chief executive officer at Wipro Consumer Care & Lighting, told BloombergQuint in an interview.
The maker of Santoor soaps, which gets more than half of its sales from rural India, said the company's volume growth in rural markets has been “in the mid-single digits” with almost no impact on urban growth.
Agrawal said the expectation of a price drop and cash crunch in the market has made traders hesitant while stocking. “While they (traders) have seen some amount of drop from consumers in terms of buying, but it got exaggerated because they were expecting prices to drop,” he said, adding that trade stocking has gone from three weeks to just one or two weeks.
While Wipro Consumer Care took price cuts to drive growth in rural markets, Agrawal said there is no room for further reduction in prices.
Meanwhile, the company has witnessed strong growth in international markets and expects its overseas business to account for 54 percent revenue in the ongoing financial year. Agrawal said markets like China, Vietnam, Indonesia and Philippines are seeing double-digit growth.
Agrawal said the government should settle the uncertainty around the Goods and Service Tax rate cut as it will bring confidence among traders.
Watch | Wipro Consumer Care's Vineet Agrawal on the consumption slowdown in India
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