FMCG major ITC and Emami are scaling up their reach in rural areas to battle the subdued consumer sentiment hoping it can help push sales. The move is backed by consumer connect initiatives.
In view of the ongoing slowdown, which has impacted demand in rural India, ITC doubled its rural stockist network in the current fiscal year with significant increase in coverage across low population group markets.
“We have actively increased our direct reach in rural areas by adding more than 25 per cent new markets to the existing large serviced base”, an ITC spokesperson told Business Standard.
ITC’s handler base currently stands at 6.2 million outlets and it continues to deploy resources to augment the coverage aggressively. Nearly 80 per cent of new handlers added in the current year come from the rural sector.
Meanwhile, Emami Ltd, which has one of the highest exposures in rural areas among its peers, is banking on its Project Dhanush initiative which it undertook three years back to reach the deepest and remotest of the geographies.
In the last three years, Emami expanded its footprint to more than 20,000 towns with a population of around 3,000 across India. “Van branding and visual merchandising at outlets through point-of-purchase visibility have proved to be an effective consumer influencer fuelling rural channel growth,” Mohan Goenka, director at Emami Limited told this newspaper.
With more than 3,000 distributors and more than 600,000 square feet of trade assets, which incidentally is the largest in-store merchandising in the country, HUL also has prioritised increasing its direct distribution network.
According to the International Journal of Research – Granthaalayah, since its launch in 1997, HUL has appointed 6000 sub-stockists because of which its distribution network directly covered about 50,000 villages and is reaching about 250 million consumers.
This translates into 37 per cent of rural consumers. The rural distributor has a set of stockists attached to it who drives distribution in villages using unconventional transport like tractor, bullock cart and others.
Nearly all of the FMCG companies like Marico, HUL, ITC, and others have been pointing out that the operating environment has been challenging with a drop in consumption, especially in rural areas, severe crunch in market liquidity conditions and disruptions and floods in several parts of the country.
FMCG players are also leveraging e-commerce platforms and using digital technology to drive sales.
Both HUL and ITC are using big data analytics to attract consumers from small towns or rural India by offering suitable products, SKUs and communicating its portfolio. HUL has also come up with an online ordering app for its salespeople as well as opt for customised promotions.
“FMCG brands are leveraging e-commerce platforms to offer their products catering to the growing demand and in 2020 we got orders from big cities as well as smaller cities such as Ajmer, Bharuch, Chittoor, Dharwad among others. We are consistently widening our selection of FMCG daily essentials making them available for customers throughout the country with our growing infrastructure capabilities”, an Amazon spokesperson told this business daily.
According to Nielsen India, FMCG sales via the e-commerce route is expected to grow to $4 billion by 2022.
Pointers –
*ITC’s 80% of new handler base came in from rural
*Emami expanded its footprint to more than 20,000 towns and rural locations
*HUL’s distribution network directly covered about 50,000 villages
*HUL & ITC employing e-commerce platform and digital route in rural areas
*Emami banking on online routes for urban centers only
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