December 1, 2021

The World Stock Markets Tips & Targets, News, Views & Updates

The World Stock Markets Tips & Targets, News, Views & Updates

Rural India now as resilient as urban regions in FMCG sales

Despite lower penetration of several personal care, personal hygiene and home hygiene products in rural markets, the resilience of sales in these markets and higher propensity to spend during the two years of the pandemic are pushing the rural markets into a bigger or almost equivalent size as that of the urban markets in terms of volume sales, says a latest report by market researcher Kantar.

For instance, hand sanitiser volume sales have become much bigger in rural India reaching almost 4.44 crore households as compared to 4.26 crore urban homes. In terms of penetration, urban India is far ahead at 40.1% whereas rural India at 22.3%.

The rural markets also have a different consumption trend. Hand sanitisers have overtaken hand wash liquids in rural market penetration unlike in urban markets where hand wash is a larger category. In rural markets, the penetration of hand wash is at 18.7%. In urban markets, the penetration of hand wash is at 55.4%, while for hand sanitizer it is at 40.1%, as per Kantar.


Similarly, grooming and personal care products like toilet soaps and skin creams have shown stronger traction in rural areas during the past two years, as a result of there being less of a home-office trend.

There has also been higher uptake of personal and home hygiene products this year too in rural India, while its sales have slowed down in urban India. Kantar said household penetration of product categories like utensil cleaners, toilet cleaners, hand soap and hand sanitisers all showed marked upticks.

“Just a few years ago, brands in these hygiene categories were running educational campaigns in rural areas aimed at teaching consumers the simplest basics of cleaning and personal care. Today, while penetration still has some ways to go, there exists a large and increasingly sophisticated core rural market base for these products,” said Deepender Rana, executive managing director, South Asia, insights division at Kantar.

The scope of rural sales volume for several FMCG categories is likely to be higher than urban due to higher population size despite lower penetration. Kantar said it is still seeing some categories like toothpaste, talcum powder, butter, cheese, insecticides, basmati rice and snacking like instant noodles showing tremendous rural volume growth though urban penetration is higher.

“As rural consumers continue to expand their purchasing behaviours, brands of all stripes could soon find that their primary audience is rural, not urban,” said Soumya Mohanty, MD, client and quantitative, insights division at Kantar.

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