Wednesday, July 26, 2006
Rural demand for FMCGs to rise over 50% by '12
NEW DELHI: Rural and semi-urban markets will drive the fast moving consumer segments business in the country to a compounded annual growth of 50 per cent for the next six years, according to Assocham.
The FMCG segment is estimated to become a Rs 1,06,300 crore industry by 2012 from the present Rs 60,000 crore.
Market penetration currently stands at about two per cent in the rural and semi-urban areas against total growth rate of about eight per cent, the chamber said.
Indian rural market with its vast size and demand base offers a huge opportunity to FMCG companies, it said.
A good number of malls would come up in the next four to five years in semi-urban areas, which would lead to increase in the the demand of these products, the report said.
However, the chamber also pointed out that the companies would have to face a number of difficulties specifically in the rural areas.
India has about 6,27,000 villages spread over 3.2 million sq km. About 750 million Indians live in rural areas and finding and delivering them the products is a tough task, it said.
The poor state of infrastructure would be the biggest challenge to make the products available in far-flung areas.
Affordability of a product or service to a rural consumer is also a problem with low disposable incomes that will compel the manufacturers to make the products more affordable.
www.economictimes.com
The FMCG segment is estimated to become a Rs 1,06,300 crore industry by 2012 from the present Rs 60,000 crore.
Market penetration currently stands at about two per cent in the rural and semi-urban areas against total growth rate of about eight per cent, the chamber said.
Indian rural market with its vast size and demand base offers a huge opportunity to FMCG companies, it said.
A good number of malls would come up in the next four to five years in semi-urban areas, which would lead to increase in the the demand of these products, the report said.
However, the chamber also pointed out that the companies would have to face a number of difficulties specifically in the rural areas.
India has about 6,27,000 villages spread over 3.2 million sq km. About 750 million Indians live in rural areas and finding and delivering them the products is a tough task, it said.
The poor state of infrastructure would be the biggest challenge to make the products available in far-flung areas.
Affordability of a product or service to a rural consumer is also a problem with low disposable incomes that will compel the manufacturers to make the products more affordable.
www.economictimes.com
# posted by Kallappa @ 10:49 AM 
