For marketers, Madhya Pradesh, Chhattisgarh, Bihar, Jharkhand and Orissa are low on the priority list because they are seen as having lesser disposable income and spending propensity as well as aspiration and awareness. Nielsen says, however, that well managed, these states can be a good buffer against declining sales figures.

The five states account for 16 per cent of the ₹2.38 lakh crore FMCG market (as of June 2014) and contribute 20 per cent to incremental sales. However, the FMCG categories that drive growth differ amongst these hinterland markets. While food drives incremental sales in Bihar and Orissa, non-food categories drive sales in Madhya Pradesh and Chhattisgarh.

Despite lower per capita consumption, the category-stocking pattern mirrors that of overall India. Shampoo, biscuits, soaps, washing powder and hair oils, the top five categories that have the deepest reach have higher penetration levels in these five states than nationally. Functional categories like utensil cleaners, toothbrushes and antacids saw maximum increase (over the same period last year) in reach followed by indulgence and personal grooming categories. This is an indication of the widespread consumption of regular-use categories, implying that marketers should offer their full portfolio in these state outlets.

(The authors of the study are Vijay Udasi, Executive Director, Nielsen India, and Sanchali Chakraborty, Director, Nielsen India. Krishna Kamal Mishra, Nielsen Sales Effectiveness Practice Area, provided inputs.)

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