Vijya Research & Advisory

FMCG Sector Playing Immense Role In Rural India

The 'Rural and Urban Insight Series' provides in-depth information about the demographic and asset profile of about 6000 rural markets in India.

FMCG industry has immense potential to tap in rural markets by focusing its marketing and distribution efforts in the high income rural hubs in India. According to Kapsole Rural and Urban Insight Series, there are 97 large rural markets in India with each having average 7 lakh population and composing about 42 thousand villages. These rural markets (rural blocks) spend about 70,000 crore annually only on FMCG goods.

Uttar Pradesh has maximum number of high potential FMCG markets followed by Kerala. In North India, Gurdaspur, Ballia, Azamgarh, Saharanpur, Hisar, Varanasi are some of the highest income earning rural markets. Mukundapuram, Namakkal, Omalur, Krishnagiri, Viluppuram, Chikodiare important rural market in south.

The analysis on Rural India by Kapsole highlighted that Food accounts for about 57% of the value of the average rural Indian's household consumption. This included 14% for cereals and cereal substitutes, a little less than 8% for milk and milk products, and 8% on vegetables. Also, from its total consumption, rural India spends more on food item groups than the urban India, fruits and processed food being the exceptions.

Major FMCG multi-nationals in India have been increasing their focus on rural markets after facing saturation in urban areas. However, FMCG industry face challenges in serving rural industry due to lack of distribution facilities, higher cost of servicing the market, lower purchasing power, poor infrastructure and lower media outreach.

Kapsole Rural and Urban Insight Series 2013' helps marketers in channelizing various opportunities arising from geographical and economic disparity in India at granular level.

Categories: Economy

Tags: fmcg india, market size, rural sector

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Piyush Jain
Vijya Research & Advisory