Godrej Consumer Products plans to increase its spending on advertising in 2023. While speaking to CNBC-TV18, the company's CFO, Sameer Shah, said that its ad spending will increase in the coming year as it is currently lower than the industry average for FMCG (fast-moving consumer goods) companies. Typically, ad spends for FMCG companies are between 10-12 percent.
"Having said that, we will also focus equally on the quality of spends and not just quantity of spends,” he added.
Overall, it seems that Godrej Consumer Products is focusing on increasing its advertising efforts in order to drive sales and compete with other FMCG companies.
Godrej Consumer's third-quarter business update suggests the FMCG sector is witnessing a slowdown post the festive season and weak demand from the rural segment is still an area of concern though things are getting better on that front.
Shah mentioned that he expects government spending to increase ahead of the upcoming elections and this coupled with the possibility of a pick-up in rural demand, could be a positive sign for the company's sales.
“Over the 3-4 quarters rural has been quite sluggish, generally for the sector. But for us in the last quarter, rural growth was matching urban growth, which still is lower as compared to the historical trends," he said.
Rural has been impacted largely due to inflation seen over the last three-four quarters. Now, with a gradual cool-off expected, FMCG players expect that consumption will recover driven by the drop in key commodity prices.
"... Also a lot of infrastructure investments, which are getting executed as we speak and also expected over the next three-four quarters,” he added.
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(Edited by : Abhishek Jha)
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