Need smaller stores to boost reach'

A recovery in rural markets is prompting retailers and fast-moving consumer goods (FMCG) companies to increasingly tailor their strategies for the hinterland.

- VIVEAT SUSAN PINTO

A recovery in rural markets is prompting retailers and fast-moving consumer goods (FMCG) companies to increasingly tailor their strategies for the hinterland. This is showing up in more access packs of premium items from soaps to shampoos, biscuits to colas, taking the digital route for launches, content, messaging and commerce as well as setting up more stores in small towns and cities.

A joint report by consultancy Deloitte and the Retailers Association of India (RAI) notes that rural spending is likely to increasingly align with urban trends as spending is set to grow over the next few years.

Executives couldn't agree more. "The attention for most FMCG firms will shift to rural areas as it gets back to the growth path," Tarun Arora, CEO and wholetime director, Zydus Wellness, said on Friday. He also points to the trend of mass personalization as spending patterns change and consumers in the countryside aspire for better products and services.

Even quick commerce, which has largely grown in top cities and metros over the last few years, is eyeing the next level of expansion into smaller cities, Deloitte says. It notes that q-comm will grow into a $40-billion market by 2030 from $4 billion now, galloping at the rate of 47% per annum in the next five years.

"Quick commerce will evolve in the next five years and everybody will have space," Hari Menon, CEO, bigbasket, said, adding the plan to go public in the next 18-24 months. BBNow, the q-comm unit, accounts for 80% of its business.