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Resource centre on India's rural distress
 
 

Why are FMCG majors chasing growth in rural India?

-Livemint.com

* Demand in rural markets has outstripped sales growth in urban markets over the last several quarters.

* Companies are betting on consumers in rural India switching from unbranded, loose products to branded ones.

Top FMCG makers are back to chasing growth in India's villages and are ramping up their reach in those markets.

To be sure, companies are betting on large swathes of consumers in rural India switching from unbranded, loose products to branded ones over the next few years. This gives them room to push their soaps, shampoos, biscuits, beverages and packaged staples in India’s villages, albeit at lower price points.

Demand in rural markets has outstripped sales growth witnessed by companies in urban markets over the last several quarters. Companies expect India's smaller cities and villages to continue driving growth.

Last week, Nestle India, the maker of Maggi noodles said it plans to expand its reach to 1,20,000 villages by the end of 2024. The company has taken some decisive steps in the last two-to-three years to enhance its rural footprint, said Suresh Narayanan, chairman and managing director, Nestlé India Ltd. In 2017, it was covering about 1,000 villages in the country; in 2019, that number was up to almost 89,000.

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