FMCG offers an opportunity to play rural consumption theme

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The fast moving consumer goods (FMCG) sector is an important contributor to India’s GDP growth, with a whopping size of around Rs 500 billion. With the revival in rural demand coupled with new product launches by FMCG companies, revenue growth from the rural segment, which contributes 40-45 per cent of total income of the FMCG firms, is expected to exhibit a positive growth trend in the coming years.

Consumer appetite had taken a hit after the government’s demonetisation move in November 2016, which resulted in sluggish rural demand amid intense competition. Also the implementation of the goods & services tax (GST) put pressure across consumer sectors.