A Comparative Study of Growth, Challenges and Opportunities in FMCG of Rural Market

Abstract

The fast-moving consumer goods (FMCG) sector is an important contributor to India’s GDP and it is the fourth largest sector of the Indian economy. Globally, the FMCG sector has been successful in selling products to the lower and middleincome groups, and the same is true in India. Over 70% of sales are made to middle classhouseholds today and over 50% is in rural India. The sector is excited about a burgeoning ruralpopulation whose incomes are rising and which is willing to spend on goods designed to improvelifestyle. Also with a near saturation and cut throat competition in urban India, many producersof FMCGs are driven to chalk out bold new strategies for targeting the rural consumer in a bigway.FMCG Industry in India is witnessing a change – a change in the pattern in which it is growing – needless to say, with the changing demographics, the pattern of marketing would also change. As rural penetration increases, the rural markets would command more and more share of the overall FMCG space. Though the urban markets are growing too, the incremental addition in consumers / households is much more in rural space as compared to urban markets. Rural marketing has become the latest marketing mantra of most FMCG majors. The rural India is vast with unlimited opportunities, waiting to be tapped by FMCG’s. Hence the Indian FMCG sector is busy putting in place a parallel rural marketing strategy. Therefor a comparative study is made on growth, opportunity and challenges of FMCG’s in rural market. This paper will providedetailed information about the growth of FMCG industry in rural market of India and examining the challenges, opportunities for the FMCG’s in rural market with growing awareness and brand consciousness among people across different socio-economic classes in rural area of India and how the rural markets are witnessing significant growth.

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