Nearly 24 percent of overall FMCG sales in India are from the five south Indian states, Andhra Pradesh, Karnataka, Tamil Nadu, Telangana and Kerala
Consumers in southern India tend to buy small pack sizes, are more experimental, and on average, spend more on groceries compared to the rest of India, according to a study by research firm Kantar Worldpanel.
Their monthly survey studies consumer behaviour to understand the shopping habits of households by following their monthly purchases of FMCG goods and shopping frequency among other factors. The report said India's five southern states are more urbanised, economically progressive, better developed and lead the country socially. And this influences their shopping behaviour.
Nearly 24 percent of overall FMCG sales in India are from the five south Indian states, Andhra Pradesh, Karnataka, Tamil Nadu, Telangana and Kerala, according to K Ramakrishnan, Group Head and General Manager, Worldpanel division, Kantar in India.
Nearly 33 percent of the households in these southern states are SEC A and B households, i.e. of a higher socio-economic class. This is higher than the rest of India that has 24 percent such households. The south has a per capita net state domestic product (NSDP) beyond Rs 130,000, as against a national average of Rs 85,229.
NSDP is defined as a measure, in monetary terms, of the volume of all goods and services produced within the boundaries of a state during a given period of time after deducting the wear and tear or depreciation, accounted without duplication.
Ramakrishnan said all these factors "determine some level of affluence or a slightly more forward consumer demographic and that's perhaps the reason they are experimenting".
Average grocery bills from these states are higher than the rest of the country. Households here spend around Rs 7,892 on FMCG annually, while other parts of India spend Rs 7,365. "Southern households are in love with smaller packs," the research noted. The average pack size bought in south India is 178 grams (excluding packaged wheat flour), notably less than the 215 grams average for the rest of the country.
Since they buy smaller packs, south Indians buy more packs in one go which is reflected in the numbers. People of these states buy 586 packs of FMCG annually as opposed to 534 packs in the rest of the country. They spend more on food products and households care products.
"On average, southerners pay 31 percent more for household care products and 12 percent more for food and beverage products than the rest of the country," the study said.Nearly 25 percent of Parle's sales come from the south and therefore, the company offers the maximum amount of storage units for its stock there. "The south, unlike other zones, has a very well-developed multi-channel distribution. For instance, it was among the first zones to latch on to modern trade and has also been a pioneer as far as digital marketplaces are concerned. Given these variables, the consumer in the south is far more evolved," Mayank Shah, senior category head at the Mumbai-based firm told Mint.