Rural FMCG sale to touch $ 3.5 bln by year-end

New Delhi, Dec 26 (UNI) High consumption patterns of rural India for consumer durable products, including refrigerator, television sets and electrical appliances, will drive the sale volumes of rural FMCG industry which will touch 3.5 billion dollar by the year-end, according to Assocham.

By 2007-end, the FMCG size in value terms is expected to be over 18 billion dollar of which its rural segment could be slightly more than one fifth of total FMCG market, according to estimates by the Assocham.

''The factors responsible for increased market penetration in rural FMCG sector comprise higher consumption patterns of rural population for products such as consumer durables as rural India is getting connected with power facilities, personal care products, toiletries and soaps and soft drinks,''Assocham President Venugopal N Dhoot said.

Releasing the finding here today Mr Dhoot adds that consumer durable manufacturers in 2007 introduced and designed special budgeted products as per rural requirement as a result their sales increased by over 30 per cent in rural areas in first 10 months of 2007.

The trend, according to Assocham Chief remained almost similar for television sets and other consumer and electrical appliances.

The production strategies for this also remain identical by MNCs and their counterparts in domestic company for increased and higher rural market penetration of FMCG products. This worked and clicked and amounted to 25 per cent here in sales as in compared to last year.

In 2007 FMCG total sale by December will be within the range of 3.5 billion dollar due to christmas, handsome and attractive discounts being offered by almost every FMCG manufacturer, be it in consumer durable and appliances, products of personal care, soap, detergent and even soft drinks as from early 2007 onwards even, Pepsi or Cola bottle are available at Rs five in countryside.

In India there are approximately 128 million households, the rural population is nearly three times the urban. As a result of growing affluence, fuelled by good monsoon and the increase in agriculture output to 200 million tonnes, rural India has a large consuming class with 41 per cent of country's middle class and 58 per cent of total disposal income.

The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all the two-wheelers purchased.

The rural market accounts for half the total market for television sets, fans, pressure cookers, bicycles, washing soaps, blades, tea, salt and toothpowder.

UNI