Rural consumers to lead India's boom: Unilever looking to profit

27-Feb-2014 - Last updated on 26-Feb-2014 at 16:48 GMT

Unilever has announced its intention to join the Facebook-led alliance ‘Internet.org’, which seeks to provide web access to India’s rural population, in a move which looks to make the most of reaching the key consumer group.

Unilever’s commitment to improve India’s internet infrastructure is a savvy move for the personal care giant, as e-commerce and beauty are both set to boom in the region.

According to a study by the Associated Chambers of Commerce and Industry of India, fast moving consumer goods will see more than 50% growth in rural and semi-urban India by 2014.

Conditions ripe in India

Unilever will participate in Internet.org’s research programme, which “aims to better understand the barriers to connectivity in rural communities”, according to the businesses involved.

This research will inform the implementation by the alliance of companies of on-the-ground projects to improve rural consumers’ connectivity.

Overall annual growth for the Indian cosmetics sector in particular is reported to be twice that of the US and European markets, and its hair and beauty sector is expected to reach $6.2 by 2015, according to ‘International Beauty Mart' (IBM).

This coincides with the approaching explosion of online sales for the country, where revenues of e-commerce companies may increase threefold in the next three years to 504 billion rupees ($8.13 billion), according to Indian research firm Crisil.

"Driven by growing consumption in rural and semi-urban areas, the fast-moving consumer goods (FMCG) market is set to double from $14.7 billion in 2008-09 to $30 billion in 2014," Manoj Mehta, chairman, IBM 2014, said.

Unilever’s involvement in facilitating internet access will allow its brand key strategic access in this booming emerging market.

Ethical business

While accessing these rural consumers will prove lucrative for the businesses involved, Unilever is also keen to stress the ethical trading motivation behind the partnership.

“Unilever believes that one of the best and most sustainable ways it can help to address global social and environmental concerns is through the very business of doing business in a socially aware and responsible manner,” the company states.