India, May 1 -- If you thought that shoppers in India's villages still buy loose staples and items of daily use that are unbranded, think again. Consumers in rural markets are lapping up branded fast-moving consumer goods (FMCG), that is, products like flour, spices, pulses, tea, soaps and shampoos, detergents, among others, that come from listed FMCG companies. Additionally, these consumers are buying premium brands albeit in small pack sizes and adding new product categories to their purchase baskets. Contrary to popular perception, urban markets are driving growth for unbranded packaged goods. These were some of the observations made by insights firm Worldpanel by Numerator at a recent webinar. Worldpanel maps household FMCG consumption in India. Consumption growth in India is fragmented, hyperlocal and contradictory as consumers are trading up (buying premium products) and trading down (buying cheaper or smaller packs) at the same time, the speakers noted. Consumer intelligence company NielsenIQ's Sharang Pant said small-town India was growing faster than the large metros. In value terms, FMCG's compounded annual growth rate in Tier 1 cities was 9% between 2023 and 2025 while the rest of urban India (non-metros and small towns) and rural India grew at 13% and 11% respectively. "Small towns and rural markets are driving volume growth for FMCG while in the metros, the growth is more price-led or premiumization-led," Pant said. In December quarter of 2025, FMCG companies reported strong demand in rural markets as inflation and edible oil prices stabilized. But going forward, the war in West Asia and weak monsoons may de-accelerate this growth. Yet experts do not expect big shifts in rural consumption. "Despite situations like covid, edible oil price surge etc. rural has turned out to be extremely resilient," said K Ramakrishnan, MD, South Asia at Worldpanel by Numerator. "We do not expect a knee jerk reaction from the rural shopper. At the moment, we expect rural shoppers to evolve positively toward brands and listed companies, continuing to go premium and buy newer categories," he said. Rural consumption comprises 65% of all Indian households as per Worldpanel. "It is a common misconception that rural people buy a lot of unbranded goods. Only 37% of unbranded products bought in the country are bought in rural areas," said Ramakrishnan. 63% of unbranded FMCG product volumes sell in the cities. Cities have greater availability of unbranded products. Most supermarkets stock unbranded products in large containers and bakeries too sell unbranded bread and cookies. Since unbranded goods lack the strong distribution networks that the larger national companies have, their availability remains limited to urban areas. On the other hand, FMCG majors (HUL, ITC, Godrej, P&G, Parle) thrive in rural markets on the back of their investments in building brands and increasing penetration. "National brands have built serious equity in the rural markets with decades of work behind them. That equity pays off," Ramakrishnan said. Thirdly, rural consumers prefer brandedlisted players as affordability is already built in through price laddering. Large companies offer smaller packs which others do not. Rural consumers are also demanding more solution-led and convenience categories not usually associated with them. Pain relief, antiseptic creams, sensitive toothpastes, etc., are problem-solving categories that are growing in rural markets. Penetration of body creams, face wash, hand wash and fabric softeners has improved. "This is part of rural India's evolution. Rural areas are more connected, thanks to the internet. National brands are easily accessible because of their distribution efforts and lower price point packs. Overall, the rural economy has improved over the years and hence the adoption of newer categories," Ramakrishnan said. Clearly, the rural markets are upgrading. "First, there's diversification of consumption, particularly the adoption of self-care and indulgence categories. Both are signs of a market that is maturing in its consumption behaviour. Second, premium brands have grown by at least 13% in the last couple of years in rural markets. The share of super-premium brands (brands priced at 1.5X the average category price) has grown from 30% to 42%) in the last four years," Ramakrishnan noted....