How to Beat Bharat's Blues

With rural consumers tightening their purse strings even for daily-use products, FMCG companies are trying to tide over the slowdown with a slew of strategies.

- Divya J Shekhar

Bhura Singh, 44, firmly believes that one cannot run a household by just being a grocer these days. He holds this view despite owning a large grocery store that caters to over 3,330 people in Khushhal Pur, Uttar Pradesh. The village has just one other store like his.

Among the fastest-moving products in his shop are single-use tea packs by Nice (manufactured in the neighbouring Harpur city) priced at ₹1, noodles by Rafan (manufactured in Kanpur) priced at ₹5 and chocolates called Dairy Rich manufactured by a company called Appeal, costing ₹5. All these products are placed alongside Tata and Brooke Bond Taaza tea pouches, Nestle’s Maggi noodles and Cadbury Dairy Milk respectively. “Dehat mein kisi cheez ki kami nahin hai [Villages have many options to choose from]. Of course people are aware of superior brands, but these days, they just come to me with ₹10 and ask for a product that will provide maximum quantity and value for the price,” says Singh.

“Aaj kal gaon mein toh daily kamaana, aur daily khaana,” he explains, referring to how most people—especially daily wage-earners and marginal farmers— are buying small units on a day-to-day basis. So high-value tubes of face creams are being sidelined for smaller packs, while shampoos and hair oils are only being bought in one-time-use sachets priced at ₹1 or ₹2. Soaps are being sold as usual, he claims, but “that is a product with the lowest margins”.

Singh, who is married with three daughters and one son, complains that customers are also taking longer to repay credit. This means he may delay paying his sub-stockists, who in turn face pressure from super-stockists and FMCG companies. With credit channels drying up, customers become more cautious about their purchases.