Mumbai: The webinar ‘Urban Wealth, Rural Volume, and What’s Next: The Great Indian Consumption Shift’ focussed on how India’s consumption model is evolving, with growth no longer uniform and being driven by a mix of premiumisation, upgrading, and volume expansion across markets. The session organised by MRSI featured Sharang Pant, Customer Success Lead, NIQ India, NielsenIQ India, P.S. Pradeep (Advanced Analytics Director, Worldpanel by Numerator), and Manish Makhijani, CEO, RSPL Ltd (Hygiene Care Business – India and International), bringing together perspectives on changing consumption patterns across categories and geographies, and the session was moderated by Abhinav Goel.
The discussion highlighted how consumption growth is increasingly shifting beyond metros, with smaller towns and rural markets playing a larger role alongside premiumisation trends in urban India.
Pant highlighted that consumption growth is increasingly coming from smaller towns and rural markets, which are growing faster than metros, especially in FMCG where growth is volume-led, while metros are seeing price-led or premiumisation-driven growth. He noted that factors such as increasing e-commerce reach, higher internet penetration, and expansion of organised retail are enabling access and driving consumption beyond metros.
He also pointed out that premium and higher-value products are seeing growth across both metros and non-metros, and categories like tech durables are expected to see further growth as incomes rise. He emphasised that growth varies by region and is not uniform, and that India’s consumption is becoming more income-led, requiring more focused and region-specific approaches.
P.S. Pradeep further spoke about the clear divergence in India’s consumption patterns, with rural areas continuing to anchor overall FMCG volumes while urban markets show stronger momentum in consumption growth. He highlighted that rural contributes a significant share to FMCG volume and value but remains behind urban in per household consumption and spend. Growth dynamics differ, with rural areas seeing steady expansion through increased consumption across more packs, while urban consumers are increasing consumption at a faster pace and shifting towards more planned shopping behaviour. He also pointed out that unbranded products are growing faster in urban markets, whereas in rural, listed brands are performing better due to stronger distribution, wider pricing options, and the essential-heavy nature of rural consumption baskets.
He also explained that while overall spend growth per household is similar across rural and urban markets, the coping behaviours differ, rural consumers are spreading consumption across more, often smaller packs, while urban consumers are reducing trips and becoming more planned in their purchases. Rural demand is evolving with increased adoption of convenience-led and problem-solving categories, along with gradual category expansion driven by segments like snacking and personal care.
He noted that premiumisation is visible, with growth concentrated at the mass and premium ends while the mid-segment is declining, and that rural contribution to premium segments is increasing, largely enabled through smaller pack sizes. He added that rural consumption continues to be essentials-led but is gradually upgrading, with growth expected to come from both mass and premium segments, supported by affordability-led access and varying category demand across essentials, indulgence, and problem-solving needs.
Makhijani spoke about the drivers of growth, highlighting both economic and marketing factors shaping rural and non-metro markets. He pointed out that a significant share of higher-income households is present beyond metros, with a large proportion across non-metro and rural regions. He highlighted key economic enablers including stable inflation, rising incomes, infrastructure development such as roads and electrification, increased focus on health and hygiene, and the impact of digital transformation including UPI and internet access in rural India.
He emphasised that affordability does not mean consumers prefer low quality, and that aspirations remain high, with brands needing to offer good products at accessible price points, often through smaller packs. He also spoke about distribution innovations such as micro-distribution, rural influencer networks, and direct-to-retailer systems, along with the role of digitalisation in improving supply chains. He further highlighted the importance of hyperlocal and vernacular marketing, as well as on-ground community-led brand building. He noted that rural consumers are not different but operate in a different context, with different needs and language, and understanding this is critical to unlocking the opportunity in these markets.
Overall, the session captured how India’s consumption landscape is becoming increasingly diverse and non-uniform, with growth being driven by a combination of premiumisation in urban markets and volume expansion in rural and emerging regions. It highlighted the need to move beyond a one-size-fits-all approach, with a sharper focus on regional realities, affordability-led access, and deeper on-ground understanding to effectively tap into the next wave of consumption growth.
