Page 268 - DMGT509_RURAL MARKETING

Unit 14: Corporate Sector in Agri-Business

Notes
Figure 14.1: Hariyali Kisan Bazaar in Rural India

FMCG

Increasing levels of income in the hands of rural households, coupled with massive advertisements
by the market players, would take rural FMCG market from current 87,900 crore (US$ 19.08
billion) to a market size of over 1,06300 crore (US$ 23.08 billion) by 2012, according to an
analysis carried out by a leading industry body. This entails a compounded annual growth rate
(CAGR) of 10 per cent in totality for rural and semi-urban areas.
Meanwhile, a recent study by global information and measurement company Nielsen has
revealed that over 80 per cent of FMCG categories are growing faster in rural India as against
urban India.
FMCG players like HUL and ITC have already established their foothold in hinterlands. ITC’s
‘Chaupal Sagar’ offers huge variety of FMCG products in villages while HUL expects contribution
of rural markets to grow from 40 per cent to 50 per cent in next 4-5 years in its turnover.

Consumer Durables

India’s consumer durables market is anticipated to expand by 40 per cent in 2011-12, according
to a study by a leading industry body - ‘Rise of Consumer Durables in Rural India’.
Mobile handset companies are betting on low-end models to target a significant segment in the
society that wants basic vanilla communication tool to stay connected to the world. Indian
companies like Tata and MTS are fighting for rural market share with Chinese brands like
Lawow and G’Five. Players like Videocon and Micromax have also rolled out models that are
meant for sizeable price-sensitive customer segment.
Moon B Shin, Managing Director, LG Electronics has revealed in his recent interview that rural
India stands as a great opportunity for the company in future and provides 15-20 per cent of the
business to the company.

India’s Rural FMCG Market to Grow to $100 Billion by 2025

The Indian rural market is expected to grow more than tenfold to become a USD$100 billion
opportunity for retail spending in the next 15 years, The Nielsen Company has found.

LOVELY PROFESSIONAL UNIVERSITY 263