While rural India had been a key driver of growth a few years back, we have seen rural demand dropping below urban demand in the previous financial year due to the high inflationary environment. The new-age channels like modern trade and e-commerce have been driving urban growth.
While the syndicated data shows that rural demand continues to lag urban demand, the gap between urban and rural and been shrinking, which shows a sequential revival in demand from the hinterland.
However, Dabur has seen demand from the hinterland return to the growth trajectory and outpace urban demand in Q3 of this fiscal. Rural growth for Dabur was 200 bps higher than urban growth in Q3 and this is a result of the several initiatives that we have rolled out to seed demand in the hinterland.
We have been investing in expanding our rural footprint, which has expanded by 17,000 villages in the current fiscal from 100,000 to 117,000. We are working towards ending this year with a rural coverage of 1.2 lakh villages. Even syndicated data shows that Dabur’s rural distribution has grown the highest among FMCG peers, giving us a distinct advantage and helped us reap the benefits of improvement in rural consumer sentiments.
Alongside, we have expanded our product basket in the rural market by way of newer affordable and rural-specific packs across categories to feed these markets and push demand growth. Similar initiatives will continue. We have also invested in consumer activations in rural India to better reach out to consumers in the hinterland, giving them an opportunity to touch, feel and experience our products.
We feel that it’s only going to improve from here, thanks to continued Capex in infrastructure building by the government.