Paradigm shift in rural buying behaviour as quality takes centrestage: CII study

The consumption trend in rural areas has shown a paradigm shift from price-driven to quality-driven products, points out a recent study on rural marketing by the Confederation of Indian Industries (CII).

“The knowledge that branded goods offer better quality is visible. Established “upmarket” products of brands like P&G, HUL, Nirma, ITC have found loyal customer base as opposed to the situation about 20 years back, when they were highly sensitive to price and perceived value,” the study said. Rural consumers spend around 13 per cent of their income, the second after food(35 per cent) on Fast moving consumer goods (FMCG).

The FMCG industry in India was worth $16.03 billion in August 2008m and the rural market accounted for 57 per cent of the share. The sector showed the rural markets posted about 20 per cent growth in rural India, against 20 per cent in the urban areas, according to the CII study.

The rural India has been relatively insulated from the crippling blow of the global slowdown. On the other had, the slowdown has slowed the growth of urban middle class consumption. The rural demand has been fuelled mainly by funds infusion from debt loan waiver scheme, National Rural Employment Guarantee Act scheme and increase in minimum support price of various crops.