The Associated Chambers of Commerce and Industry of India (Assocham) has said that the fast moving consumer goods (FMCG) sector will grow at 25% despite the ongoing economic downturn.
According to Assocham, sale of FMCG remains unaffected by slowdown and the sector is expected to touch $25 bn by the end of calendar 2008 as against $20 bn in 2007.
The sale of FMCG in rural areas will touch $5 bn by end of December 2008.In 2007 rural sales of FMCG stood at $3 bn according to Assocham study.
Assocham’s study is based on the feedback given by companies like Hindustan Lever, Godrej, Dabur, ITC, Johnson & Johnson, Procter & Gamble, Reckitt & Benckiser, Parley, Britannia, Nestle among other.
The factors responsible for increased market penetration in rural FMCG sector, according to ASSOCHAM, comprise higher consumption of products such as consumer durables which include refrigerator, TV and electrical appliances.
The study says that the rural market accounts for half the total market for TV, fans, pressure cookers, bicycles, washing soaps, blades, tea, salt and tooth powder. The rural market of FMCG products is growing much faster than the urban counterpart, points out the ASSOCHAM.