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    Companies finding rural markets increasingly attractive: Assocham

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    Demand in India’s urban areas may be dwindling, but leading industry group Assocham said the hinterland is becoming increasingly attractive for manufacturers of consumer products and automobiles, as well as organised retail businesses, according to a company press release.

    The Assocham, in a recently released report titled ‘The Rise of Rural India’ said companies in the fast moving consumer goods (FMCG) sector have recorded higher growth in rural market, which has contributed substantially to their bottom lines.

    “Majority of FMCG firms such as DCM and ITC have been recording higher growth rate and sales of their product in rural areas as compared to urban markets,” the report said. “India’s FMCG industry is currently estimated at Rs 2,000 billion. Out of this, domestic consumption accounts for Rs171.89 billion.”

    On releasing the report, , president, Assocham, said, “FMCG sector in rural areas is expected to grow by 40 per cent as against 25 per cent in urban areas

    “Rising rural incomes, healthy agriculture growth, boost in demand, rising consumerism across India, better penetration of FMCG products in the rural market are contributing to high growth and rapid expansion of the FMCG industry in rural India,” he added.

    The report further said that the rural retail market – currently estimated at USD 112 billion, or around 40 per cent of the USD 280 billion retail market is another potential area for business development. In addition, report said, the rural market was expected to double in the next four to five years, though only about 10,000 out of India’s 600,000 villages have access to organised retail services.

    — IndiaRetailing Bureau