Marico’s MD & CEO, Saugata Gupta, believes that the rural market is at an “inflexion point,” offering significant opportunities for FMCG companies that invest in price point packs. The rural market, with its large population base and rising disposable income, presents a “headroom for growth” for FMCG companies. This is due to an increase in per capita income, helped by infrastructure spending and an increase in the minimum support price of crops, leading to improved quality of life for the rural class.
Gupta emphasizes the importance of affordability and availability in rural markets, which can be achieved through price point packs and distribution. He notes that affordability is driven by price point packs, while availability is driven by distribution, as counterfeits can be major issues in rural areas.
Gupta believes that FMCG companies should continuously invest in rural infrastructure, distribution, and create “moats” to maintain a competitive advantage. He also highlights the importance of differentiated offerings in various channels to avoid channel conflict and ensure exclusivity of packs.
The rural market has been growing at a higher rate than urban areas, with the latest quarter seeing rural growth outpace urban growth for the fourth consecutive time. Marico, which has seen sequential volume growth, notes that urban consumption is stable, while rural demand continues to grow. Gupta believes that traditional retail channels, such as Kirana stores, will continue to coexist with new-age channels like Quick-Commerce, each playing a specific role in different catchment areas.