Rural market driving India's FMCG market

Boosted by the launch of new products and increasing rural consumption, India's FMCG industry is set to grow 20-30% in 2009-10, up from 10-20% in 2008-09. FMCG caters to a very core need in the consumer’s life and so it is less prone to economic swings than high ticket items such as television or even apparel. For instance, the beverage industry in India is estimated to grow at 17% in 2009, according to industry experts. The hot summer had helped spur sales of beverages so far this year. On the personal care front, deodorants, shampoos and talcum powders could also see double-digit growth in 2009.

Rural market is characterized by consumers with less buying potential as their needs and consumption are less. Rural market would rather spend on daily necessities than luxury items. So FMCG companies see a big potential market there. The main factors that drive rural consumption include increasing population, increase in demand, improving standard of living, globalization, increasing awareness, and excellent logistics which make products available in most of the 0.6 million villages in India.