Indian Rural Market to Emerge as Next Growth Frontier for Consumer Goods Industry Sys TechSci Research

Increasing purchasing power and improved tendency to consume will drive the rural markets in coming years.

Noida, India, August 27, 2010 --( According to a recent research study by TechSci Research, rural markets will emerge as the next battle ground for consumer goods companies in India. The traditional focus on urban markets will shift towards unexplored rural territory. These companies have now realised the importance of more than 600 Million consumer base which will help them to maintain their growth momentum and to overcome their concerns in an already crowded urban market.

In the opinion of Neeraj Chawla, Sr. Retail Consultant at TechSci Research, "The market dynamics of rural India has drifted towards reach or supply chain issues, rather than the initial concern of product pricing. Today, the rural consumer has the requisite purchasing power to consume and is more aware of product availability in the market through increasing penetration of electronic and print media in his surrounding environment. The main concern for the consumer goods company is how to tackle the logistic and supply chain issues in order to offer their product lines at the doorstep of the consumer."

Most of the companies have already designed and implemented their rural market-specific strategies in order to gain first-mover advantage. Companies like Hindustan Unilever and Godrej Consumer Products Ltd (GCPL) have initiated projects like Shakti (2005) and Dharti (2009) respectively in order to penetrate the rural market. These projects have been implemented successfully and have contributed towards the company top line, as well as, bottom line growth.

As per TechSci Research, the rural market in India will witness the fastest growth trajectory as compared to urban markets in the coming years. The rural consumer is expected to account for a major chunk of multiple product lines driven by improving economic condition and an increasing focus of companies in strengthening their rural distribution networks. Consumer goods companies need to spend more on educating the rural consumer and inducting them as their partners rather than restricting them to an end point of consumption.

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TechSci Research
Karan Chechi