At the unveiling of Pitch Madison Media Advertising Outlook 2015, Piyush Mathur, President, Nielsen India spoke about 2015 being a boom year for FMCG and elaborated on the trends to track in the FMCG sector.
Speaking on the growth potential that exists in metros and rural areas, he said, a lot of specific targeting is possible in both areas if seen in a different light. Rural has grown 3x in ten years. 95% of villages are electrified. 72% of FMCG is just in the 10 states. 66% of soft drink consumption in rural areas, happens in just 3% villages, just 19,000 villages. A very interesting segment of consumer that are emerging which Mathur referred to as ‘rural superconsumer’. They are emotionally and economically wanting to try out high ticket brands. Almost 15 to 20% of rural population can be classified as rural superconsumers.
Another trend will occur between branding and premiumisation. In the last two years, 5 thousand companies have come up in the FMCG space, said Mathur. Premium is defined as the 20% above the category price. The trend observed is premium segment grow faster than FMCG in 2014. Premiumisation among the top ten companies, as studied by Nielsen, is actually driving their growth. These companies while launching premium products have to convince the consumer of the value of the product, they were actually spending 20% more on advertising.
The third trend is around innovation and breakthrough innovation. Innovation now is a sheer matter of survival, observed Mathur. Only 10% of innovation that comes out survive for two years and then there is a very few number of breakthrough innovation, whether it’s Oreo or Bru Gold. The reason why innovations became breakthrough was because of premiumisation, a lot of efforts were made in the metros. They continued to back their big innovation for a much longer period of time.
Mathur said three years ago modern trade was growing 2x of traditional trade. Last year, it was actually slower than traditional trade. BTL will always remain important from an advertiser’s point of view. In India, e-commerce is just taking off. It is just the beginning. Value and convenience are the two things that will continue to drive e-commerce.
In summation, Mathur said what one could take away from his presentation, was metro trend is about creating the right content across platforms, while in rural it is important to be precise in what you do. Branding is going to be about local and regional advertising. Going after premium products will result in growth. Innovation is for survival while breakthrough innovation is about supporting that brand for a longer time. Traditional trade will drive BTL advertising while e-commerce is just about to take off.