Rural FMCG sales see 12.5% growth in June

Unlock-1 in June saw FMCG sales growing in double digits in rural markets against stagnant growth in urban areas. However, the revival of demand in the rural market may not help the FMCG sector much, as it would end the year with flat growth, finds Nielsen.

The 12.5 per cent FMCG growth in rural markets in June was three times the all-India growth of 4.5 per cent. Urban markets recorded 0.04 per cent year-on-year growth in June as some key metros were still under lockdown.

Even during the AprilMay lockdown, de-growth in rural markets was lower than urban areas. Even in a de-growth of 11.2 per cent rural markets fared better than urban markets, which contracted at 20.4 per cent. Across the country, the FMCG sector had de-grown by 17.1 per cent in April-May.

According to Nielsen, lower Covid-19 cases in rural areas helped the market bounce back faster and the latent demand saw sales growing in doubledigits.

The reverse migration of labours from cities to villages too has raised demand for daily products.

The income levels also went up as MNREGA wages and job days increased. Disbursements under various government schemes too have gone up by two-fold compared to the same period last year.

Better monsoon and increased availability of labour saw increased kharif sowing and this improved sentiments.

While the rural market may arrest FMCG degrowth, it will not help the overall growth for the entire year much. Urban markets account for 64 per cent of the national sales,