Small town FMCG market to outpace metros soon

India’s small town demand for fast moving consumer goods (FMCG) is seen outpacing cumulative demand from the country, a report by research firm Nielsen showed.

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Demand for consumer products from four hundred small towns with a population of up to 1 million is seen touching $20 billion by 2018 and $80 billion by 2026.

“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,” Ranjeet Laungani, executive director, Nielsen, said in the report.

In 2010, demand from small towns was $6 billion, about a fifth of India’s total FMCG sales and 30 percent of the urban FMCG sales, the report said.

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Since 2002, the sector grew 3.5 times in these smaller towns compared to 3.2 times at the all-India level.

Out of 81 FMCG categories tracked by Nielsen, 49 product categories across personal care, over-the-counter drugs, household care and food outgrew countrywide demand.

The report also said consumers in these markets are trying out new categories such as health and wellness, personal grooming and home improvement, apart from regular household goods.

Reuters