Rural consumers stock up on brands like Fem, Real, Pamper, Horlicks and others

MUMBAI: Soaps and detergents have moved to the back of the shelves as rural consumers are now stocking up on branded juices, facial bleaches and health food drinks with eagerness and are increasingly converting to baby diapers and feminine hygiene products. While this has resulted in a deeper penetration for brands such as Fem, Real, Pampers, Whisper and Horlicks, even brands such as Act II popcorn are said to be now visible in rural retail shops.

The presence of these products was as good as negligible in rural markets about two years ago, but current numbers speak volumes about their growing acceptance in rural households. Two factors that have fuelled the trend are efforts made by companies to increase their distribution networks and a rise in rural incomes.
Packaged juices and beauty products like bleaches were earlier seen as a very urban market product. Dabur, which has doubled its rural reach, is seeing demand coming from the hinterland for products like packaged juices under the brand Réal and Fem fairness bleaches. Riding on this, Dabur’s foods business has reported a growth of over 20% in the past one year. “Rural consumers across income segments are exhibiting marked propensity towards spending on premium high quality products , which are backed by strong brand values,” said Sunil Duggal, CEO, Dabur India.

Awareness generation is not restricted to beauty alone. It extends to health and hygiene as well. Take baby diapers , for instance. As a category, baby diapers’ rural sales are in excess of Rs 200 crore today. Over the last two years, rural category sales have grown by over 150%, with rural baby diaper sales accounting for 15% of total value sales of diapers (Rs 1,300 crore).

A key factor that could be driving conversions to diapers is the lowest price of Rs 10 offered by Procter & Gamble India . “Pampers has more than majority share of the baby diaper market across India, including rural India, and has also been growing value share consistently. This is a clear indication that rural consumers are choosing to buy branded diapers for their babies,” said a P&G spokesperson.

On the other hand, the rural sanitary napkins category grew by 74% over the last 3 years, with sales currently at Rs 366 crore. It demonstrates an increased usage of feminine hygiene products across India. However, the P&G spokesperson said there is still need for penetration and consumption of sanitary napkins and baby diapers to increase in India in line with more developed and progressive countries where these categories are 100% developed. P&G’s Whisper, which is a market leader across India, including rural markets, has also been made available at the lowest priced SKU of Rs 25 for a pack of 8s, which is an approximate per unit price of Rs 3.

An ICICI Securities report, based on their findings of a recent visit to rural Uttar Pradesh with 10,000-50 ,000 population, said: “The aspiration-driven consumption theme is unfolding with gusto in these markets, but one must be careful in identifying the categories that are benefiting from the transformation . Categories with core benefits — such as health food drinks, feminine hygiene, diapers , etc — are finding strong acceptance . Better-educated rural folk may switch to the pricier Bajaj Almond Drops hair oil, yet the demand for Babool and Cibaca remains strong,” the report said.

Overall, health food drinks are gaining acceptance and companies are also investing in expanding distribution. “Availability of packaged foods was strong in the rural areas we visited. While we were surprised by the availability of Agro Tech Foods’ Act II popcorn (ready to cook) in small towns, DFM Foods with its brand Crax stood out in terms of availability across markets,” said the report.

According to Asheesh Sharma , marketing head, AgroTech Foods, which makes Act II popcorn , the brand’s penetration has grown 80% in the last three years to reach 50,000-1 ,00,000 plus population towns. The brand has found its way to rural market as well through the wholesale route.

COUNTRY WEALTH

In addition to facial bleaches, branded juices and health food, rural consumers are adopting baby diapers and feminine hygiene products Rural sales of baby diapers grew 150% in 2 yrs to over Rs 200cr, while rural sanitary napkins category grew 74% over 3 yrs to Rs 366cr The biggest contributors to this change include cos widening distribution networks and a corresponding rise in rural incomes