India's FMCG market expected to grow significantly in 2021

In the fiscal budget announced by the Indian government on February 1, support and construction for India's rural areas were strengthened. Specific contents included strengthening rural infrastructure construction, expanding agricultural credit, etc. Among them, the budget investment in rural infrastructure construction will be increased by 34% .

The substantial increase in budgetary investment in rural areas in the 2021 budget means that in the coming year, the Indian government will focus on the construction of rural areas. Infrastructure construction will include transportation, networks, residential and commercial buildings, and other aspects. Rural India is about to usher in rapid development.

With the further implementation of the Indian government's policies, in 2021 and in the future, the Internet penetration rate in rural areas of India will be higher, transportation will be more developed, the employment rate will be higher, the per capita income will be higher, and the rural economy will become more prosperous.

The development and prosperity of rural areas will create new consumer demand. Therefore, rural areas may trigger a consumption boom in India's fast-moving consumer goods industry and promote the rapid growth of the fast-moving consumer goods market. After the budget was released, some fast-moving consumer goods companies have stated that they will expand in rural areas, including PepsiCo and Dabur India ( Indian Consumer Goods Company ) .

According to a report by Kantar Worldpanel , India 's fast-moving consumer goods market has been growing rapidly since the outbreak of the epidemic, increasing by 4.2% in fiscal 2020 , twice the growth rate of 2019. The surge in demand in rural areas and small and medium-sized towns has made a huge contribution, and the strengthening of rural infrastructure will further expand demand and promote the growth of the fast-moving consumer goods market.

In addition, India's e-commerce platforms may continue to maintain their rapid momentum and compete with physical stores for rural market share. Most of the growth in the fast-moving consumer goods market in 2020 was contributed by e-commerce platforms such as JioMart, Flipkart, and BigBasket, while physical stores were severely damaged.

For cross-border e-commerce sellers, as e-commerce platforms expand in India's rural market, the platform's traffic will continue to grow, and sellers will also receive more orders. Among them, sellers can focus on personal care products (shower gel, shampoo, etc.). This category maintained good growth in 2020 and is expected to continue to grow in the future.

Cross-border e-commerce

E-commerce market

E-commerce platform