The FMCG sector is seeing growing demand in rural India with the agrarian economy looking up, echoed both Mayank Shah, Senior Category Head, Parle Products; and Puneet Avasthi, Senior ED-Specialist Businesses, Insights Division, Kantar, in a discussion on CNBC-TV18.
According to Shah, rural markets have been pumped up by the festive season and a strong rural economy.
He added that good demand is coming in from rural areas both on small as well as big packs and even premium ones as the income level is on rising — a very important reason being good use of the rabi crop.
“As you rightly said, I think not just small packs, in fact, we are even seeing big packs being purchased in rural areas and premium products are also doing well. This is not a normal thing. Normally, you would expect smaller packs to do better in rural areas, and maybe a few categories. But currently, we are seeing across-the-board growth in rural areas,” said Shah.
People were cutting down on spending but things have gotten better now
Underscoring the point, Avasthi said towards the middle of this year, things were a little worrisome where consumers in rural India had started cutting down on spending, but since then, because of the surpluses, consumer spending has bounced back.
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“What we are seeing is that consumers are spending in rural India, across the board, they are spending on electronics, on equipment and kitchen, and on construction activities,” added Avasthi.
He further added that rural connectivity and an increase in internet usage have catalysed mobile phone demand in the FMCG sector
“With better rural connectivity, there is going to be that much more… and we are seeing greater digital inclusion in rural India when many more people are accessing digital payments,” said Avasthi.
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