‘Middle India’, together with metros outpaced India growth story says Nielsen
Moneylife Digital Team 27 December 2011

According to the report, hygiene awareness, health, personal grooming and convenience seems to be the driving force behind increased consumption in middle India

‘Middle India’, a region made of about 400 towns with a population of one to 10 lakh each, has outperformed all-India fast-moving consumer goods (FMCG) growth story, says Nielsen’s report titled ‘Managing the Middle India Gold Rush’. Terming this region as ‘vastly underrated’, the report states that middle India would emerge as a key growth engine in a decade.
 
‘Middle India is are home to 100 million Indians and today constitute up to 20% of the country’s FMCG consumption. In fact, only the metros and Middle India have outpaced the all-India growth story in the last eight years. Even today, Middle India leads the pack across urban and rural segments for FMCG value growth rates,” says the report.

It states out of the Rs1.4 trillion ($280 billion) in FMCG sales in 2010, goods worth about Rs287 billion ($5.74 billion) were consumed by the Middle India population. This number makes up more than 20% of the overall FMCG sales, and 30% of the urban FMCG sales.

Interestingly, focus on hygiene, health, personal grooming and convenience seems to be driving the rapid growth in these towns. The top five fastest growing categories like diapers, scourers, liquid toilet soaps, acne preparations and air fresheners, which fared strongly in the past year, performed even better in 2011, indicating continued possibility of robust growth in the near future.

Middle India is also home to 30% of all urban stores, comprising over 900,000 million stores today. From 2002 to 2010, the region has seen a vast increase in sales values, going to Rs287 billion from Rs83 billion. Only metros have registered more growth, from Rs110 billion to Rs412 billion during the same period. This is a significant achievement for these smaller towns, considering the fact that the metros breached the Rs280 billion mark as recently as in 2009.

 “Although some companies have partially penetrated the Middle India market, many tend to overlook smaller towns, ignoring the fact that these markets are perhaps easier to penetrate due to relatively sparse competition,” says the report.

However, a few major players with adequate capital and wide distribution networks are already cashing in on the opportunity.

The report from Nielsen says, “The annual turnover of the top ten FMCG players from the Middle India segment rose more than 42% or by Rs35.8 billion ($716 million) in just two years between 2009 and 2011.”

Comments
RNandakumar
1 decade ago
It would be interesting if Neilson were to take an exclusive survey on the sales of fairness creams. I am sure of the sales figures should be atleast at par with washing powders' sales if not more. Our craving for ' Fair Girls' and 'Fair and Handsome boys' must be making the companies laugh all their way to the banks.
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