Indian Rural Market: An Impulse to FMCG Sector

The Fast Moving Consumer Goods (FMCG) sector is a foundation stone of the growing Indian economy. This sector strikes every foeet of human iife. The FMCG producers now realize that there is a lot of prospect for them to enter into the nJral market. The rising incomes and growing lifestyle is a significant at/raction for this sector, There are more than middle income households in the nlTal areas as compare to the urban. Thus the rural marketing has been growing progressively over the years and is now bigger than the urban market. Globally, the FMCG sector has been successful in selling products to the lower and middle income groups in India. More than 70% of sales are made to middle class households today and over 50% of the middle class residing in rural India The FA-leGsector is energized ahout a rapidly increasing rural population whose incomes are intensifying and which is willing to spend on goods designed to improve their lifestyles. Also with a near saturation and cut throat competition in urban India, many manufacturers and marketers of this sector are driven to formulate new strategies for targeting the roral consumers. Bul lhe roral penetration rales are low. This presents a tremendous opportunity for manufacturers of branded products who can convert prospective consumers into consumers to buy their products. ComfXmies including lv/ulli National Companies and regional players started developing marketing strategies to aUraetthis unJouchedmarket. While formulating the strategies, the marketers need to take care of the rural consumers differently from urban Rural India is a powerhouse propelling the economy's growth. Home to two-thirds of the country's one billion consumers, it is the zone where almost half of the national income is generated. Marketersare focussing on the Indian hinterlands to achieve their revenue targets by increasing their presence into the rural markets. Marketers are looking the aspiring rural and semi-urban India to yoke growth opportunities. Cable and satellite penetrationhas helped in a big way to access hard.to-reach ruralareas. Moreover, advertising budgets for rural markets do nat demand much of the liquidity. Marketing of products and services through simple ways like village melas (fairs), nukkad natii«Js (road theatre), boat branding, mobile vans and wall paintings prove to be very effective and that too at minimal costs. Both FMCG companies and automobile companies are the biggest advertisers in semi-urban and rural markels. Mast of the FMCG finns follow the strategy of cam ing up with small size packs for the people residing in remote areas. Euromonitor International'ssurvey has found that 68 per cent of personal care products were sold in ruralIndia in FY 12 as against 31 per cent in cities. Thus, markets in ruraland semi.urban India are on the edge to be the future growth drivers due to higher disposable incomes, rising desires of people to own quality products and improved infrastructuresupportextended by the Government for the development of these areas. The Indian Fast Moving Consumer Goods (FMCG) industry began to shape during the last fifty odd years. The FMCG sector is a foundation stone of the Indian economy. This se<:tortouches every aspect of human life. Indian FMCG market can be divided between the organized sector and the unorganized sector. Unlike the US market for FMCG which is dominated by global players, India's FMCG market remains highly fragmented with roughly half of the market going to unbranded, unpackaged and home made products. This presents a tremendous opportunity for manufacturers and marketers of branded products who can convert consumers to buy their products. Around the Globe, the FMCG sector has been successful in selling products to the lower and middle income groups, and the same scenario is true for Indian markets. Around more than 70% of sales are made to middle class households today and out of which more than 50% is in rural India. The sector is excited about a rapidly increasing ruralpopulation whose incomes are rising and which is willing to spend on goods designed to improve lifestyle. Also with a near saturationand cut throatcompetition in urban India, many manufacturersof FMCGs are driven to formulate new strategies for targeting the rural consumer. MART, the specialisl rural marketing and rural development consultancy, has found that 53 per cent of FMCG sales and 59 per cent of