Rural India's FMCG Basket Size Surges By 60%: GroupM & Kantar

GroupM and Kantar released the fifth edition of their Rural Barometer Report. The report provides insights into the current sentiments, consumption trends and economic behaviours in rural India. It also explores the growing adoption of digital technologies and their impact across various sectors, offering a thorough understanding of India’s rural landscape.

The 2024 Rural Barometer report reveals a 60 per cent increase in the average FMCG basket size among rural consumers, growing from 5.8 in 2022 to 9.3 in 2024, driven by a rising preference for convenience products. The shift reflects evolving lifestyles and increased purchasing power in rural regions. However, regional variations persist, with states like Jammu & Kashmir (39 per cent), Maharashtra (41 per cent), and Odisha (26 per cent) showing moderate FMCG basket growth, despite fewer financial concerns. The expansion in FMCG categories aligns with rising rural incomes and diversifying income sources including salaried earnings.

Ajay Mehta, Managing Director, GroupM OOH Solutions in India added, “The rural landscape is no longer just a geographical space; it's a digital frontier ripe with opportunities. As rural consumers embrace online platforms, brands must adapt their strategies to meet them where they are. By investing in digital initiatives that resonate with rural India’s aspirations, brands can contribute to the nation’s development and tap into a burgeoning market that promises substantial growth.”

The report highlights a divide between rural Indians who rely solely on agricultural income comprising 19 per cent of the population and those with multiple income sources, making up the remaining 81 per cent. Those dependent on agriculture alone experience greater financial concerns, affecting 82 per cent of this group while individuals with diversified income sources face less financial stress and tend to have larger FMCG basket sizes.

In terms of media habits, rural India is increasingly embracing a hybrid model that blends traditional and digital media, with 47 per cent of the population following this trend. The shift is more evident in areas with stronger digital infrastructure although states like Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh and Chhattisgarh remain less digitally connected, highlighting the need for region-specific media strategies.

“2024 Rural Barometer report shows that rural consumers are experiencing rising purchasing power and evolving lifestyles, as seen in increased basket sizes and a preference for convenience products, despite ongoing financial concerns. Regional differences in financial resilience are linked to diverse employment opportunities. We are also seeing rural media consumption shifting toward a hybrid of traditional and digital formats, though digital access remains uneven across states”, said Puneet Avasthi, Director- Specialist Businesses, Insights Division, Kantar.

As rural India continues to transform, digital platforms are becoming crucial for reaching and engaging consumers. From digital payments and ecommerce to gaming and lifestyle content, the rural digital landscape is expanding rapidly. While traditional media still holds sway, a hybrid approach that blends online and offline channels is essential to effectively connect with rural audiences. By recognising the shifting needs and preferences of rural consumers, brands can tap into the tremendous growth potential this market offers.

Rural consumers are increasingly drawn to lifestyle-oriented content such as fashion, health and travel, reflecting a rising interest in topics that enhance their everyday lives and align with their aspirations.

The report also highlights a marked shift in rural India towards digital payments, now reaching 42 per cent of active internet users and ecommerce, engaging 23 per cent of active users. The shift underscores a growing trend of financial and digital inclusion across rural regions.