Latest FMCG Updates

Source: TOI 06th Dec’10

Growing Demand for Brands in Rural

Certain growth statistics have shattered the

myth that the rural consumer is content with
unbranded or mass-end products alone and
gives a strong indication that rural market
consumption has picked up and is accelerating
faster than urban markets.

This has led to their changing their

consumption pattern.
Growing Demand for Brands in Rural
“Gone are the days when the rural consumer
was content with using mustard oil and plain
soap. Today, he/she is seeking special branded
products for daily skin and healthcare needs.
Rural consumers across income segments are
showing a marked propensity towards
spending on premium high-quality products,
which are backed by strong brand values,”
says Sunil Duggal, CEO, Dabur.
Confectionaries
The demand for cream biscuits gone up in rural markets.

The sale of instant noodles is growing nearly twice as fast in

the rural market compared to the urban one.

Variety biscuits (creams, cookies) are growing significantly

faster than glucose even in rural markets. They are taking
away significant consumption from glucose biscuits,” says
Vinita Bali, managing director & CEO, Britannia Industries

According to a retail audit, the share of glucose biscuits in

overall market has changed from 30% to 26% in the last 18
months.
Body Care Products
One in every six rural buyer of hair dye now
uses colors other than black—something, which
would have been dubbed “indulgence” a
decade ago

Even seemingly urbane brands in categories like

deodorants are said to be growing much faster
in rural India than urban, says a study by The
Nielsen Company
Home Care Products

• The rural growth of mosquito-repellent brand

Good Knight coils was almost double that its
urban market growth this year

• Fabric softeners , too, are said to be growing

much faster in rural India than urban, says a
study by The Nielsen Company.
Some Supporting Latest Statistics
• Nielsen pegs the opportunity for retail spending in the next 15 years at
$100 billion

• At present, the rural market is worth approximately $9 billion in

consumer spending in the FMCG space annually

• Food categories are expected to drive the bulk of the additional $91
billion into the marketplace by 2025.

Product Growth Rate Period Comparison Base

Dove shampoo 100% January-October 2010 over the same period last year
Sunsilk shampoo 14% January-October 2010 over the same period last year
Pond’s White Beauty 4200% January-October 2010 over the same period last year
Cinthol Original 28% April-September 2010 it was 12.5%, over the same period last year
Growth Reasoning
• Analysts explain that the high growth is due to a lower base
and that actual sales number would be smaller given the
recent introduction of the brand, one cannot overlook the
fact that there is a demand for such products and marketers
can no longer underestimate the aspirations of the rural
consumer

• What’s fuelling this trend is a steady growth in income level in

rural India

• Thanks to a spurt in commodity prices, employment

generation schemes and fiscal sops announced by the
government, rural consumers today have more money in
their pockets.
Rural Consumer Lifestyle Changing Pattern
• Rural consumers want brands at a certain price point

• With economic growth and rising awareness, the rural-

urban divide is getting blurred

• There is greater homogeneity and demand for high-

quality products, and consumers in both rural and urban
markets are aspiring to live better, eat healthy and have a
better tomorrow,” says Shivani Hegde, GM (foods), Nestle
India

• The average rural consumer may have become brand-

conscious, but he/she continues to be value-conscious.
Case Study – Godrej (Size matters!!)
• Godrej Consumer Products (GCPL), whose Cinthol soap regular
was available at the lowest SKU (stock keeping unit) of Rs 23 in
Tamil Nadu, has decided to introduce a smaller SKU of Rs 6, for
rural markets.
• The plan worked for the brand. According to Tarun Arora,
executive V-P (marketing), GCPL, the rationale behind introducing
this offer was that although people in smaller towns aspire for a
brand, they cannot afford to buy it because of high price point.
• At Rs 6, the product was within reach. “If we look at categories
like soap, they have penetrated deep into the hinterland.
• there are also a “number of opportunities in hair colour and the
household insecticide categories. Introduction and focus on
smaller SKUs has been one of our strategies to increase our
thrust in the rural market,” says Arora
Case Study – Nestle & Dabur
• According to Hegde of Nestle, products may need to be
adapted to meet the specific needs of different segments of
consumers as affordability varies across the income pyramid

• “Take the case of Maggi. The two-minute-noodles is a

favourite across markets and the Chotu Maggi at Rs 5 makes
the same high-quality product affordable to many more
consumers,” she says.

• Similarly, Dabur Amla is available in a Re 1 sachet and Rs 10

pack, while Dabur Red toothpaste is available in a Rs 5 SKU
(stock keeping unit).
New Strategy - Direct Media

•  For nearly half of the largest FMCG

categories, rural India now contributes more
to their growth than urban India.

• In a bid to fan this new-found rural

consumerism, fresh strategies are being
formulated to connect with a more aware
consumer.
New Strategy – Case Study Dabur India
• Dabur, which draws half of its sales from rural and semi-urban
markets, has moved beyond traditional media options like
radio, television and cinema, and entered into a direct
engagement with the consumer with special initiatives like a
rural beauty and talent contest with Dabur Amla hair oil.

• The company took Dabur Amla’s

association with beauty a step
further with a rural beauty pageant
christened ‘Dabur Amla Sundar, Susheel, Yogya Pratiyogita, Ab
Banke Dikhao Rani’, which also sought to empower women in
rural India.