According to a recent report by market researcher Kantar, despite lower penetration of several personal care, personal hygiene, and home hygiene products in rural markets, the resilience of sales in these markets and higher propensity to spend during the two years of the pandemic are pushing the rural markets into a bigger or nearly equivalent size as the urban markets in terms of volume sales.
Hand sanitizer sales, for example, have increased significantly in rural India, reaching about 4.44 crore households compared to 4.26 crore in urban India. In terms of penetration, urban India leads with 40.1 percent, while rural India comes in second with 22.3 percent.
Rural markets have a distinct consumption pattern. Hand sanitizers have surpassed hand wash liquids in rural market penetration, although hand wash is a larger category in urban markets. Hand soap is becoming more widely available in rural markets.
Similarly, because there is less of a home-office tendency in rural areas, grooming and personal care items like toilet soaps and skin creams have seen better momentum in the last two years.
Personal and home hygiene goods have also shown increased demand in rural India this year, whereas sales in urban India have slowed. Utensil cleaners, toilet cleaners, hand soap, and hand sanitizers all saw significant increases in household penetration, according to Kantar.
Due to higher population size and lesser penetration, rural sales volume for numerous FMCG categories is projected to be higher than urban. Even while urban penetration is stronger, Kantar said some categories such as toothpaste, talcum powder, butter, cheese, pesticides, basmati rice, and snacking such as quick noodles are still enjoying tremendous rural volume increase.
“As rural consumers’ purchasing habits evolve, companies of all hues may soon discover that their primary audience is rural, rather than urban,” said Soumya Mohanty, MD, Kantar’s client and quantitative insights division.