Rural consumption of FMCG goods surged 60% over last 2 years: Report

There has been a 60 per cent rise in the average FMCG basket size among India's rural consumers in the last two years, driven by a growing preference for convenience products, according to the latest Group M and Kantar report released on Monday.

"Rural India has seen a marked increase in the average basket size from 5.88 in 2022 to 9.3 in 2024, driven by higher consumption in convenience categories like RTE, beverages etc," the report states.

This reflects the evolving lifestyle and rising purchasing power in rural areas.

Regional variations exist, with states like Jammu & Kashmir (39 per cent), Maharashtra (41 per cent), and Odisha (26 per cent) showing moderate growth in the FMCG basket despite lower financial worries. 

This positive trend in the expansion of the FMCG category basket is accompanied by growing rural incomes and a diversity of income sources including salaried income, the 2024 Rural Barometer report states.

The report highlights a significant divide between rural individuals with only agricultural income, who make up 19 per cent of the population compared to those with diverse income sources, comprising the balance 81 per cent. 

Those relying solely on agricultural income face higher financial concerns, affecting 82 per cent of these, while those who have diverse income sources demonstrate less stress and enjoy larger basket sizes, the report says.

In terms of media consumption, rural India is increasingly adopting a hybrid model that combines traditional and digital media, with 47 per cent of the population engaging in this trend.

This shift is more pronounced in regions with better digital infrastructure. 

However, states like Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh, and Chhattisgarh remain less digitally connected, necessitating targeted media strategies, the report adds.

Ajay Mehta, Managing Director, GroupM OOH Solutions in India, said: "The rural landscape is no longer just a geographical space; it's a digital frontier ripe with opportunities. As rural consumers embrace online platforms."

As rural India continues to evolve, digital platforms are playing an increasingly vital role in reaching and engaging consumers. 

From payments and e-commerce to gaming and lifestyle content, the digital landscape is expanding rapidly. 

While traditional media remains influential, a hybrid approach that leverages both online and offline channels is key to effectively connecting with rural audiences. 

By understanding the evolving needs and preferences of rural consumers, brands can capitalise on the immense growth potential of this market, the report points out.

Rural consumers are increasingly drawn to lifestyle-focused content such as fashion, health, and travel, reflecting a growing interest in topics that enhance their daily lives and align with their aspirations, the report adds. 

Additionally, the report underscores a significant shift in rural India towards digital payments, which now reaches 42 per cent of active internet users and e-commerce, representing 23 per cent of active internet users This shift reflects growing financial and digital inclusion in Rural India.