Corporate's out to Rob the rural market :: Wake up India

Lets go rural guy's :: wide-ranging, practical implications for creating successful portfolio strategies and packaging formats that recognise these traits and appeal to the rural consumers' senses.

"Beware the clutches of the Corporate" 

 "The robbers are on too you now to steel your money and your freedom, until you are left with a bowl to beg"

(article in Indian Express :: 21st Nov 2011

FMCG firms intensify focus on premium products

Press Trust of IndiaTags : FMCG firms, Indian consumers, Harish Manwani,Aditya Agrawal, business newsPosted: Mon Nov 21 2011, 00:04 hrs)

“As income level in the rural areas also increases, there is propensity to spend more. So most FMCG firms are trying to upgrade the choices of consumers in those markets,” he added.

According to market research firm Nielsen, FMCG market in rural India is expected to grow more than tenfold to $100 billion in the next 15 years.

Rural markets in India is currently worth around $9 billion in consumer spending in the FMCG space annually. The report said premium products currently contribute more than 21 per cent to the growth of the FMCG sector than other price tiers.

ITC is also adding more premium products portfolio to its foods portfolio.

“We are attempting to build a premium portfolio and definitely premium products are skewed towards urban markets. With this effort we are trying to earn higher margin and try to push back some of the margin to cover cost of some of the products,” ITC Head of Sales (Foods) Vikram Khosla said.

FMCG market in rural India to touch $100 bn by 2025: Nielsen

NEW DELHI: The fast moving consumer goods market in rural India is tipped to touch $100 bn (around Rs 45,735 crore) by 2025 on the back of "unrelenting" demand driven by rising income levels, according to a study by research firm The Nielsen Company.

"The Indian rural market is set to become a USD 100 billion opportunity for retail spending in the next fifteen years," according to a statement released by the company today.

According to Nielsen, rural India accounts for more than half of sales in some of the largest FMCG categories.

"While the ability of lower priced packs to improve accessibility is known, their pace and presence has been unrelenting," The Nielsen Company India Vice President Prashant Singh said.

In addition, premium skin care brands typically associated with the urban population are growing nearly twice as fast in rural areas, he added.

At present, rural consumers spend about USD 9 billion per annum on FMCG items and product categories such as instant noodles, deodorant and fabric, with the pace of consumption growing much faster than urban areas, as per the findings.

The Nielsen study also suggests that the number of direct-to-home television connections in rural areas is already more than double that of urban centres and growing dramatically. "Today, two out of five new mobile telephone connections are in rural," the statement added.

"These findings have wide-ranging, practical implications for creating successful portfolio strategies and packaging formats that recognise these traits and appeal to the rural consumers' senses," Singh said.

An ever-thirstier region

South Asia’s water

Nov 19th 2011

Extract from the article ( Unquenchable thirst :: A growing rivalry between India, Pakistan and China over the region’s great rivers may be threatening South Asia’s peace ) from | The Economist

An ever-thirstier region

The scarcity of water in South Asia will become harder to manage as demand rises. South Asia’s population of 1.5 billion is growing by 1.7% a year, says the World Bank, which means an extra 25m or so mouths to water and feed: imagine dropping North Korea’s entire population on the region each year. Greater wealth in South Asia brings with it a soaring demand for food, especially for water-intensive meat and other protein. Industry and energy-producers also use water, though unlike farms they return it, eventually, to the rivers.

Worse, overall supply will not only fail to keep up with rising demand but is likely to fall (unless a cheap way is found to turn sea water fresh). The Himalayan glaciers are melting. A Dutch study last year of the western Himalayas reckoned that shrunken glaciers will cut the flow of the Indus by some 8% by mid-century. Flows may also get less regular, especially if glacial dams form, withholding water, and then collapse, causing floods.

Others give even scarier predictions. Sundeep Waslekar, who heads a Mumbai think-tank, the Strategic Foresight Group, which has picked water as a long-term threat to Asian stability, sees a “mega-arc of hydro insecurity” emerging from western China along the Himalayas to the Middle East and farther west. The strain of bigger populations, diminishing water tables and a changing climate could all conspire to produce a storm of troubles. South Asia is especially vulnerable: Mr Waslekar sees a cut of 20% in total available fresh water over the next two decades.

The greatest threat of all would be from any change to the monsoon, which delivers most of the region’s fresh water each summer. Here, again, worries arise. Indian meteorologists who have studied rainfall data from 1901 to 2004 have noted signs in recent decades of more dry spells within the peak monsoon months. If these lead to weaker, or less predictable, monsoons in future (though this year’s was about normal) the consequences for farmers could be dire.

In any case, the cost of running short of water is already becoming clearer. The Lancet, a British medical journal, reported last year that up to 77m Bangladeshis had been poisoned by arsenic—the largest mass-poisoning in history. It was the result of villagers pumping up groundwater from ever deeper aquifers. The same poison is now entering crops and more of the food chain.

Filthy water and bad sanitation spread diseases, such as diarrhoea and cholera, which kill hundreds of thousands of Indian children every year, says Unicef, the UN’s children’s agency. Several South Asian rivers, suffering from weaker flows, have become a sludge of human and animal waste, dangerous to drink and wash in and unsafe even for watering crops.

All over the region water tables are dropping as bore holes drive deeper. In the dry season even some of the larger rivers slow to a trickle. Knut Oberhagemann, a water expert in Dhaka, Bangladesh, says that the flow of the mighty Ganges where it enters Bangladesh is at times a pitiful few hundred cubic metres a second, so low that “you can walk across the river”. When the same river, at this point called the Padma, reaches the coast, it is often so feeble that the sea intrudes, poisoning the land with salt.

The same problem curses the delta of the Indus in Pakistan. There a semi-desert was turned into some of the most fertile land on earth by British-built irrigation canals. But as the sea encroaches on low, flat land, rivers at times are flowing backwards, laments a local environmental activist. Take away the fresh water—around 60% of which is now lost to seepage and evaporation because of the bad management of those canals—and the desert will eventually come back.