According to various studies, FMCG has been proven to be the fourth largest sector in India. In fact, it is estimated to blow up to US$ 104 billion just by next year. The growth rate has altered from 11% per year to 17% per year.
Characterized as a market that requires less operating cost, low per capita consumption, low penetration levels, FMCG has done really great with all the competition it is facing at the organized and unorganized segments. With a well-established distribution network, slowly FMCG is all set to penetrate into the rural markets.
70% of the Indian population still resides in the second and third-tier cities. With the FMCG companies in India penetrating in the rural market, imagine the boom in the economy it will bring it. FMCG into the rural areas is thus going to change the market equation completely. It is a promise of strong and steady growth path in both urban-rural contributions.
The rise in consumership, rise in incomes, change in lifestyle – there is not one but many sectors that are driving the growth of the FMCG market. Here is a close study on the same:
The Growth of FMCG in Rural India
- Being one of the largest rural population; precisely 12.2% of the world population, the Indian rural market is not something to ignore.
- A shift in the prospects of the farm sector, rural economy grows to attract more investment from FMCG companies in Supply Chain management.
- With rural income growing at a rate of 7%, it is found that 40% of India’s total consumption of goods and services come from rural India.
- FMCG companies investing in the change of consumer behavior and investments being made to change the mindset of the consumers, it is very likely that market demand is going to increase.
- The burst in the purchasing power of rural India is going to increase sales of FMCG Products. However, it goes hand in hand with the demand rise for the products.
- The demographic changes, people moving from rural areas to urban cities are going to play an important role in the shift of consumer perspective.
So, with so many statistics and studies suggesting the hyper-growth of the FMCG markets, it is surely a smart choice to invest in FMCG. But, there are also so many challenges which you need to take in account, especially with respect to marketing, supply, business management, Big Data management, retail marketing management, market analysis and much more.
To give a more apt insight on the same and the perfect solution to all these problems- Technology, we have recently formulated an article that is published on “YourStory”. To read the same, please click on the link here.