Rural FMCG market to reach $100 billion by 2025

Rural FMCG market to reach $100 billion by 2025

New Delhi: The Indian rural fast moving consumer goods or FMCG market is expected to swell more than ten times to reach the $100 billion mark by 2025, according to a fresh study by the marketing and advertising research firm, The Nielsen Company.

In more than half of the largest FMCG categories, growth in rural markets is expected to outpace the urban markets, the Nielsen study results shared on Wednesday said. Some of the largest categories include salty snacks, cream, biscuits, refined oil, chocolates, noodles, milk foods, soft drinks, and grooming products. Food categories are currently driving the bulk of this growth in the rural market that now stands at $9 billion, according to the research firm.

On the other hand, there has also been a surge in the demand for products in the premium segment such as hair color and fabric softener, and other grooming products like deodorants. “The availability of lower priced packs has improved accessibility…and premium skincare brands typically associated with urban areas are growing nearly twice as fast in rural, said Prashant Singh, vice president, Nielsen, India.

Prasun Basu, executive director Nielsen, India, said the rise and stability in rural income, rise in purchasing power, and evolved consumer preferences, backed by increasing awareness, and improved availability were the leading drivers of this increase in rural consumption.

The improvement in rural infrastructure riding on a 3% increase on government spending on this sector is the leading driver for availability and has improved distribution cost and ease, said Basu.