Unlocking $3 Billion in FMCG Sales: Insights on Low-Income Shoppers in India
In May 2013, Nielsen India projected an additional $3 billion in FMCG sales by 2015, driven by two emerging consumer segments: Low-Income Value Explorers (L.I.V.E.) and First-Time Modern Trade Shoppers (F.T.M.T.S.). The L.I.V.E. segment, representing households with incomes up to ₹72,000, spends significantly on FMCG, with rising consumer confidence and aspirations for better financial stability. The report reveals unique shopping habits, a growing appetite for branded products, and an increasing shift towards modern retail channels. Companies must adapt to meet these evolving consumer needs to capture this market potential.
Unlocking $3 Billion in FMCG Sales: Insights on Low-Income Shoppers in India
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Presentation Transcript
Turning india inside out Adrian Terron, Executive Director, Nielsen India, Nielsen Retail & Shopper Team May 2013
ADDITIONAL $3 BILLION USD FMCG SALES BY 2015 Driven by 2 segments L.I.V.E. F.T.M.T.S LOW-INCOME VALUE EXPLORER FIRST-TIME MODERN TRADE SHOPPER
L.I.V.E. CONSUMERS INCOME UP TO RS 72,000 SOCIAL CLASS SEC E SIZE 10M + URBAN HHs Source: NSS 2009-2010 + Nielsen Estimates
ADDING +$1 BILLION USD FMCG SALES BY 2015 SPEND GROWS 50% TO $3.5B USD EVERY 6TH URBAN HOUSEHOLD IS “L.I.V.E” SPEND $2.4B USD ON FMCG
MORE CONFIDENT THAN SINGAPOREANS! Consumer Confidence Index
GROWING & EXPLORING 1 IN 4 EXPECT INCOME TO RISE IN 2013 1 IN 2 SAW INCOME INCREASE IN 2012 1 IN 2 SWITCHED FROM UNBRANDED TO BRANDED
DREAMING & DARING 1 IN 4 SEND KIDS TO ENGLISH SCHOOL 2 IN 3 COLOR TV & MOBILE PHONES 1 IN 5 ASPIRE TO HAVE A COOLER IN 2014 BELIEVE CHILDREN WILL HAVE BETTER FINANCIAL STABILITY
Sensitized TO HEALTH… NOT SOLUTIONIzED CAN’T AFFORD TO GET SICK, STILL EXPLORING HOW TO STAY WELL 1 IN 2 NOT CONFIDENT MANAGING FAMILY MEDICAL EXPENSES 2 IN 3 NOT INSURED AWARE OF IMPORTANCE OF SURROUNDINGS, WATER, SANITATION, & INFECTIOUS DISEASE
YET TO FORM HABITS +$1 BILLION FMCG SALES POTENTIAL INFLUENCED IN-STORE 2 IN 5 SHOPPERS WILLING TO TRY NEW THINGS
NOT MODERN TRADE SHY 5% OF MODERN TRADE SALES MADE BY LOW INCOME SHOPPERS SPENT CLOSE TO5% OF HH BUDGET AT MODERN TRADE 1 IN 2 HAVE VISITED MODERN TRADE
AN UNCOMMON SENSE PERCEPTION REALITY MORE CONFIDENT THAN MIDDLE INDIA LOW CONSUMER CONFIDENCE PLAN THEIR PURCHASES INDULGE IN IMPULSE MODERN TRADE SHY $120 MM USD TRADE SPEND IN MT
ADDING ~$1 BILLION USD FMCG SALES BY 2015 SPEND @ MODERN TRADE GROWS +300% TO $1BN + USD EVERY 4TH MODERN TRADE SHOPPER IS FTMTS SPENDS $280M USD AT MODERN TRADE
SIZEABLE, INCLUSIVE & GROWING FIRS TTIME SHOPPER SEGMENTGROWING BY 15% EACH YEAR 35% OF FAST MOVING CONSUMER GOOD SPEND IS AT MODERN TRADE 1 IN 3 FROM SEC C; MIDDLE SEGMENT SHOPPERS
EVEN PLANNED PURCHASES SEE SUPERSIZING +$100 MILLION FMCG SALES POTENTIAL INFLUENCED IN-STORE 2 IN 5 SHOPPERS BOUGHT MORE THAN PLANNED
Emphasize PULL to ENSURE SUSTAINABILITY PROMOTIONS DEALS EVENTS WORD OF MOUTH EXPLORATION PULL PUSH
AN UNCOMMON SENSE PERCEPTION REALITY 1 in 2 switch brands F.T.M.T.S buys same brand as purchased at Kirana Range is about more of more Range has different meanings across categories Personal care category purchases are planned 2 in 5 shoppers purchase on impulse
