Rural FMCG Demand Outpaces Urban Growth in Q4; Q-Com Sector Surges
India’s rural markets continued to outstrip urban growth for FMCG companies in Q4 FY24, driven by improved agricultural income, favourable weather conditions, and government subsidies. According to the latest FMCG Snapshot by Kantar Worldpanel Division, rural India posted a 6.2% volume growth for the January-March quarter, compared to 4.2% in the previous quarter, while urban growth slowed marginally to 3.6%.
The strengthening rural momentum comes after nearly two years of subdued performance, and is supported by a combination of factors including increased rural employment and stable input prices. The overall FMCG volume growth stood at 4.6% in Q4, underscoring a recovery across both markets.
Packaged foods led the volume gains, clocking a growth rate of 5.8% in rural areas. The non-food category also rebounded in the hinterlands, posting a 7% increase—its first positive quarter in two years. This signals rising consumer confidence and a revival in discretionary spending in non-food staples such as personal care and home care.
While general trade grew by 3.6%, it was the modern trade and quick commerce (Q-Com) channels that recorded the strongest performances. Modern trade grew 7.6%, while Q-Com surged an impressive 36%, highlighting the increasing relevance of digital-first retail formats, particularly in urban India.
At a regional level, the East and North zones saw the highest volume growth, up 7.5% and 6.9% respectively, compared to the national average of 4.6%. Rural markets in these regions clocked double-digit growth—East India saw rural volumes rise by 13%, while Northern rural consumption increased by 11%, reflecting regional disparities in demand recovery.
Experts attribute rural resilience to policy support, better crop yields, and stabilising price pressures, which have led to a loosening of consumer purse strings. In contrast, the moderation in urban demand may signal saturation and a shift towards premiumisation or reduced basket sizes.
For FMCG players, these trends suggest a tactical pivot towards rural-centric marketing and SKU strategies, while continuing to invest in high-growth digital channels like Q-Com. With inflation pressures easing and monsoon