Rural market will drive the consumer goods demand

With 62% of the Indian population living in rural areas, no marketing strategy can neglect this mass during the next decade. As per the research conducted by Assocham on the future of FMCG products in india, demand from rural and semi-urban centres will propel the growth of the consumer goods industry to touch a market size of over Rs. 1,00,000 Crore by 2012. Urban pockets, which have the biggets market size for all the FMCG products, would in the next 4-5 years switch over their consumption patterns for organic products, as per the report. Demand for FMCG products, including the replacement market, may stagnate by 2012 in urban pockets thus forcing the manufacturers to shift supplies to rural and semi-urban folks.

FMCG products like toothpaste, skin and hair wash, talcum, powder, branded atta, dish wash, instant cofee, ketchups, deoderants and jams, which have less than 30% penetration in rural and semi-urban areas would grow by 50% in next 5-7 years on account of rising per capita income of people living in these areas.

As per the current estimates, the percapita income of semi-urban population is Rs. 14,000 -15,000 per annum and that of a person in rural area is less than Rs. 7000 per annum. While per capita income of rural population would double by 2012, that of semi-urban people would more than double leading to a hike in their consumption patterns for FMCG products. This massive size and demand base offers huge opportunity for FMCG companies. In the process of expanding their operations into rural and semi-urban areas, these compnies will also generate huge employment in the hinterland of India.