Middle India market for FMCGs will exceed US $ 20 bn by 2018 : Nielsen

15 Dec,2011

By Ratna Bhushan

 

The FMCG market of about 400 smaller Indian towns with populations of 1 – 10 lakh, is expected to surpass US $ 20 billion by 2018 and 80 billion US $ by 2026, a new study by insights and analytics firm Nielsen said.

 

Currently, the 400 smaller towns represent approximately US $ 6 billion.”Although big Indian metros remain the staple for FMCG marketers and rural India is proving to be critical for volumes in the long run, the next wave of the Indian urban demand revolution may be found in these 400 smaller towns with a population of 1 – 10 lakh,” said Ranjeet Laungani, Executive Director, Nielsen. “It’s time for marketers to take notice”, he added.

 

Nielsen’s study shows that out of the total US $ 28 billion in FMCG sales last year, products worth about US $ 6 Billion were consumed in these smaller towns. This number makes up more than 20% of overall FMCG sales, and 30% of the urban FMCG sales. Since 2002, the FMCG sector grew 3.5 times in these smaller towns of 1-10 lakh population, compared to 3.2 times at the all-India level.

 

“The demand revolution has percolated down to middle India and these towns will behave like the metros of tomorrow,” said Laungani. “Middle India leads the pack across urban and rural segments for FMCG value growth rates.

 

Out of 81 FMCG categories tracked by Nielsen, 49 product categories across personal care, over-the-counter drugs, household care, and food outgrew the all-India rate. Over 30 categories saw growth rates faster than 1.15 times the all-India rate. FMCG companies which anticipated this kind of growth and invested in these areas a few years ago, are likely seeing a positive return on their efforts,” says Laungani.

 

Source:The Economic Times

Copyright © 2011, Bennett, Coleman & Co. Ltd. All Rights Reserved

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