Rural Markets Forming a Hub of Opportunities

Urban markets have been the primary location for consumer durables in the past. The condition was due to ease of advertising, distribution channels, and adaption to change in urban areas.
However, lately, especially after the advent of COVID, rural markets have boomed to contribute to increasing sales for consumer durables. This includes the FMCG, fashion and textile industry, and electronics.
There is also an increasing sales observed in the consumer durables section in the rural markets. Post covid the durables sales like fans, TV sets and many other kitchen appliances. The durables sector has also expanded its distribution outreach to attain last-mile connectivity. The strategy has served as a complement for the increased spending on durables.
Usha International vice president reported that a change in lifestyle in the rural areas observed that people had been comfortable purchasing at local stores than reaching out to nearby towns. This lifestyle change explains the expansion in distribution outreach by the companies. He also mentioned that the rural population contributes roughly around 18-19% of sales of Usha, and in the October 20 and January 21 quarters, there has been a 30-35% increase in rural sales. The reported rural sales for Usha for twice that of its urban sales. The trend is expected to be followed for the upcoming months as well.

FMCG:
Dabur has recently said that the urban sales volume has not reached the pre covid expansion levels. Contrary to which rural sales have surpassed pre-covid expansion rates. This explains the commendable September results for the FMCG companies.
Though many FMCG giants have reported a minor slow down (around 2.9%) in sales volume post their September results, there was a 9.4% increase in terms of value. The giants also reported that the slowdown is observed, but still, it is not alarming, and rural remains the best bet for FMCGs in the future.
Despite the low penetration of personal care products in the rural areas, the sales since the pandemic (for about two years) have been pushing limits, and the demand is predicted to be almost equal to the urban demand.
As reported by Economic Times, hand sanitizers have reached around 4.44 crores in households in rural areas compared to the 4.26 households in urban locations. A peculiar trend of hand sanitizer sales taking over the sales of hand wash liquids is observed in rural areas. In contrast, the vice versa trend persists in urban areas. Other personal care products related to skin and health have also risen in rural areas post-covid. Kantar once mentioned that there is also a striking sales growth difference in villages located within a 10km radius near towns and those beyond 10km from towns.
The rural penetration programs of FMCG giants have also gained pace in the near past to capture the newly racing demand in the areas. Thus rural markets are possibly the undiscovered and driving force for consumer durables and FMCGs.