FM CG sales in fast lane in rural areas

Leading FMCG players such as ITC, Godrej, Dabur, Emami and Marico are witnessing robust sales in rural and semi-urban markets, bolstering hopes of a speedy recovery from the impact of the COVID-19 crisis.

Interestingly, the companies are also reporting a spike in sales of health and wellness, hygiene and immunityboosting products in these markets, apart from the food products category.

The firms have started to offer these items in value packs and are also expanding their network in rural and semi-urban markets.

"Rural has been growing much ahead of urban and it's actually performing better than the pre-COVID days," Godrej Consumer Products (GCPL) CEO India and SAARC Sunil Kataria said.

This is largely due to the fact that the lockdown has been less intense in rural India than in urban areas, he added.

Dabur India Chief Executive Officer Mohit Malhotra said his company has also witnessed a similar trend where rural demand has been growing ahead of urban demand.

"Going forward too, I think rural demand will continue to outpace urban demand. With migrant workers shifting back to their hometowns and the government announcing additional spend on MNREGA and higher MSPs, rural consumption would surely see an uptick," he said.

Moreover, expectations of normal monsoon this year would further improve sentiments in the hinterland, he said.

According to a recent report from Edelweiss Research, several government initiatives and a good monsoon will supplement farmers' incomes, which should prop up rural growth from Q2 FY21.

"Overall, with supply chains restored and a likely rural recovery, we expect the sector to record positive growth beginning Q2 FY21," it said.

Homegrown FMCG firm Emami is seeing stable growth in rural demand post-March, which is overall at par with last year. It expects to clock double-digit growth in these markets this year.