FMCG Companies should focus on Rural India?


rural marketing of fmcg products - fmcg companiesFast Moving Consumer Goods (FMCG) is one of the largest sectors in India, which registered a decent growth of around 11 percent in the last decade, according to the Indian FMCG Market 2020 report.  Currently,

Currently, India accounts for a share of just 0.68% of the Global FMCG market, this share is expected to increase significantly over the next 5 years mainly due to the macroeconomic factors such as improving demographics, rising disposable income, expansion of organized retail in tier II & III cities in India, changing consumer preferences etc, according to the report.

Major FMCG markets include USA, China, European Union, Japan etc. Globally, the FMCG sector is expected to grow at a CAGR of 4.4%, which when compared to India is a lot slower. Many foreign FMCG multinationals have established themselves in India.

Globally, the FMCG companies have now shifted their focus on E-commerce due to the increasing mobile internet penetration. Globally, the share of online sales of FMCG products accounted for around 5% in 2015, which is relatively higher than India where online FMCG sales accounted for a share of just 1-2% of the overall FMCG market in 2015.

Rural India is the major market for these companies. The scenario has been changed in rural India due to a growth of internet users and mobile subscribers. Companies have been focusing on tier II and III cities in India and as well as on the rural markets.

The advertisement market in India is currently worth over Rs 15,000 crore and is expected to grow to Rs 32,000 crore by 2022.  Advertisement of FMCG products has a wide reach in rural India as well.  Rural people are aware of the brands and the products. They have their own choice of the FMCG products. There is a huge scope for the companies to expand their base in the rural market as they could reach to more potential and rural consumers in rural India.

The number of ads for FMCG sector has catapulted 25% in the Jan-Jun’16 period as compared to Jan-Jun’14, according to data released by AdEx India, a division of TAM Media Research. In its latest report that explains the trend of FMCG advertising on TV, Radio and in Print,  39% of total ads on all mediums were from FMCG category while 58% of ads played on TV were from FMCG category.  TV with 92% of the total insertions was the most preferred medium for FMCG sector Advertisement.

According to the latest BARC India, the all-India TV universe has increased to 183 million from the earlier collated figure of 154 million with the growth in the rural audience showing a quantum jump signifying that upswing is coming from non-urban areas. The total urban TV universe stood at 84,414 (in ‘000) in 2017, the comparative rural figure is 98,639 (in ‘000), signifying that the rural segment has grown at a faster rate.

Rural India could be the next big market for the FMCG companies to tap on. The number of consumers has been on a constant rise and there is a good impact of the advertisement as well. Considering the scenario, FMCG companies must focus on the rural market, while promoting their brand as well as reaching to new customers.

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