Emerging towns offer growth in India

15 December 2011

NEW DELHI: Sales of fast moving consumer goods are set to rise rapidly in emerging towns in India, offering opportunities for brands capable of building appropriate distribution networks.

Nielsen, the research firm, has released a study which estimated that the 400 or so Indian towns housing less than 1m people delivered $6bn in category revenues in 2010.

This equated to 20% of the nationwide figure, and was about 30% of the total generated by the country's largest urban centres.

Elsewhere, the report showed demand in these outlets has grown 3.5 times over since 2002, measured against growth 3.2 times over across India as a whole.

Having monitored sales in 81 segments within the FMCG sector, Nielsen revealed 49 categories had expanded more quickly in the roughly 400 towns under consideration than the national average.

Looking ahead, it predicted these markets would yield FMCG sales worth $20bn by 2018, reaching a projected $80bn by 2026.

Ranjeet Laungani, executive director at Nielsen, thus suggested the potential for manufacturers was simply too important to miss.

"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," he said.

While consumer staples will see an obvious increase in interest, Nielsen also stated health and wellness, personal beauty and home improvement should attract many shoppers.

Data sourced from Reuters; additional content by Warc staff