Rural consumption of FMCG products is growing faster than in the urban sector. Led by increasing incomes and higher aspiration levels the rural market is seeing a higher demand for branded products.
It is to be noted that in our discussions with our customers, the urban segment contributes to about 70% of the revenue share, while the rural segment accounts for 30%. FMCG products account for 50% of total rural spending and increased demand for branded products in rural India.
While more and more FMCG brands are finding traction in the rural and semi-urban markets, visibility on distribution is still a major challenge for most FMCG companies. Distributors or Sub-distributors working in these areas are generally behind on the technology curve, and infrastructure, and do not have the viability to spend on upgrades.