Home-grown FMCG major Dabur India is seeing ‘very good recovery’ in rural markets and expects growth from these markets to come at par with the urban market in the next 3-4 quarters, CEO Mohit Malhotra said.
As inflation is coming down with the cooling of commodity prices, a ‘slow volume recovery’ is happening in those markets, which is narrowing the difference between the growth rate between rural and urban, he said.
The recovery from the rural market is likely to continue despite a disruption in rain in some parts of the country, led by factors such as hike in MSP, good sowing of winter crops, and election season.
Besides, India’s unemployment rate has decreased in the rural areas and the consumer confidence index is also at an all-time high, almost reaching the pre-COVID level, he added.
“There are definite very good recovery signs, which actually I am seeing. The festive season which is coming in, should augur very well for us going forward in the future. So I am very hopeful,” Malhotra told PTI.
The company which owns power brands such as — Dabur Chyawanprash, Dabur Honey, Dabur Honitus, Dabur PudinHara, Dabur Lal Tail, Dabur Amla, Dabur Red Paste, Real — is enhancing its rural footprint with low unit price packs.
Asked when he expects rural growth to come at par with urban markets, Malhotra said: “It’s a matter of time. I think it will take another three-four quarters… before rural comes at par with urban.”
However, he added that the urban market is also driven by new-age channels such as modern trade and e-commerce, which are contributing around 20-25% of the FMCG business.
“So they are growing much ahead. For the rural, which is mainly GT (general trade as Kirana), to grow at that percentage is very difficult because the rural market has a large base and for a large base to grow at that percentage is difficult. So urban, I think for some time it is going to drive the growth,” he said.