Rural Demand Outpaces Urban, HUL & Dabur Concur

There’s someone who is always telling how 40 is the new 20. That someone is almost always an extroverted 60-year-old or a patronising 30-year-old. Both are delusional. 

40 is 40 with its warts and all. We are not delusional because we rely on data. Numbers tell the truth. In this case, it is the truth of rural demand picking up. It is doing better than in urban centres. Rural areas comprise small towns and tier-2 cities. Here’s the short of it:

Rural India is beating urban in average sales by as much as 40%!

(as per June data from Bizom’s Retail Intelligence Platform)

So, is the fabled power of rural consumption back? Bizom’s numbers say that they are. Even Hindustan Unilever’s MD Sanjiv Mehta recently stated that the company’s production is almost back to pre-COVID levels owing to increasing demand. Incidentally, over 40% of Unilever and Dabur’s sales come from rural areas. (Source: Business Standard).

According to Kantar, several macros are in favour of rural India, including expectations of a normal monsoon and greater social development spending from the government in welfare schemes like MGNREGA & Garib Kalyan Yojana. Additionally, migrant labourers have gone back to their towns and villages taking their consumption along with them. These positive factors could mean that rural India will outpace urban as early as the next quarter. All good news for consumer businesses. 

According to the second edition of Bizom’s COVID-19 Impact India Report, in the new normal, West has the slowest recovery with Q1 vs Q2 demand down by 50%. Southern regions recovered the most. Here are some of our key observations:

• Average sales in the South are at 95% of pre-lockdown levels
• The continued COVID impact in the West has lowered the number of transacting outlets even further
• Faster recovery in rural India, potentially aided by government spending, in line with the farming season and workers returning home

If you want a copy of the report or wish to discuss insights for your category, write to us at marketing@mobisy.com.