Mondelez India sees huge potential in rural markets

April 28, 2016 12:00 am | Updated 05:54 am IST - HYDERABAD:

Chandramouli Venkatesan

Chandramouli Venkatesan

Mondelez India, the Indian arm of the confectionery major Mondelez International, is focussed on harnessing the rural markets that offer huge opportunities.

The company has adopted a two-pronged approach of ensuring availability of its products and creating awareness about their relevance among the rural consumers. The contribution from the rural markets has gone up significantly and it has become a strong segment for the company, said Mondelez India Foods managing director Chandramouli Venkatesan.

According to him, the structural enablers including the demographic dividend and high levels of disposal incomes are strong in rural segment and the company had created a separate hub to cater to the tier-III and IV markets. The company has appointed distributors and sub-stockists in its route to rural market and is activating the market through seeding exercise.

“This is motivating the outlets to keep the products and see whether it will sell,” he told The Hindu . The sustained intervention in terms of creating the market and establishing coverage there had been working out well for the company. The Indian chocolate market, which was worth Rs.5,800 crore in 2014, is expected to reach Rs.12,200 crore by 2019 and Mondelez’ brand Cadbury has a 60 per cent share in it.

Mr. Venkatesan said rural markets could be defined on the basis of their location, but the mind set of the people was very urban. “Contrary to popular perceptions, there is high level of disposable income in rural areas. Although the consumers in urban areas have higher income levels, they have to factor in issues like expenses on account of accommodation, travel and other factor. These factors are not present in rural areas, thus ensuring that there is more disposable income. The presence of large number of youth who prefer our products is another factor that drives the growth for us,” he said.

Mondelez, in general, is bullish about the Indian market as there is low par capita consumption. Compared to around 10 kg consumption of chocolate per individual a year, the per capita consumption in India is less than 100 gm. “This shows the huge opportunity,” he said adding the company had therefore chalked out plans for investing in future and be ready to meet the demand as and when it rises.

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