Page 147 - DMGT509_RURAL MARKETING

Rural Marketing

Notes Fast-moving Consumer Goods

Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged
goods. Items in this category include all consumables (other than groceries/pulses) people buy
at regular intervals. The most common in the list are toilet soaps, detergents, shampoos,
toothpaste, shaving products, shoe polish, packaged foodstuff, and household accessories and
extends to certain electronic goods. These items are meant for daily of frequent consumption
and have a high return.
The Indian FMCG sector with a market size of US$14.8 billion is the fourth largest sector in the
economy. The FMCG market is set to double from USD 14.7 billion in 2008-09 to USD 30 billion
in 2012. FMCG sector will witness more than 60 per cent growth in rural and semi-urban India
by 2010. Indian consumer goods market is expected to reach $400 billion by 2010. Hair care,
household care, male grooming, female hygiene, and the chocolates and confectionery categories
are estimated to be the fastest growing segments. At present, urban India accounts for 66% of
total FMCG consumption, with rural India accounting for the remaining 34%. However, rural
India accounts for more than 40% consumption in major FMCG categories such as personal care,
fabric care, and hot beverages. In urban areas, home and personal care category, including skin
care, household care and feminine hygiene, will keep growing at relatively attractive rates.
Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term
growth categories in both rural and urban areas. The growing incline of rural and semi-urban
folks for FMCG products will be mainly responsible for the growth in this sector, as manufacturers
will have to deepen their concentration for higher sales volumes.
Major Players in this sector include Hindustan Unilever Ltd., ITC (Indian Tobacco Company),
Nestlé India, GCMMF (AMUL), Dabur India, Asian Paints (India), Cadbury India, Britannia
Industries, Procter & Gamble Hygiene and Health Care, Marico Industries, Nirma, Coca-Cola,
Pepsi and others. As per the analysis by ASSOCHAM, Companies Hindustan Unilever Ltd ,
Dabur India originates half of their sales from rural India. While Colgate Palmolive India and
Marico constitutes nearly 37% respectively, however Nestle India Ltd and GSK Consumer drive
25 per cent of sales from rural India.

Figure 8.4: Penetration of many Home and Personal Care Categories
is Extremely low in both Urban and Rural Areas

Source: United Nations, Credit Suisse

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