Why Pinoy rural shoppers are spending more
MANILA, Philippines - Filipinos living in the rural areas are spending more, boosting the growth of fast moving consumer goods in the country, according to a consumer survey done by Kantar Worldpanel.
"The rural sector is proving to be a very significant factor in the growth of FMCG (fast moving consumer goods) purchases today... They have contributed a total of P246 billion worth of FMCG in-home purchases over the past five years," said Luzviminda Barra, Kantar Worldpanel Philippines commercial director.
Barra noted the rural sector's spending is growing at a faster rate than the urban sector.
Kantar Worldpanel said annual spending of rural homes jumped 4% from P20,610 in 2009 to P25,442 this year. In contrast, the annuals pending of urban households increased by 2% to P31,179 in 2013 from P28,207 in 2009.
Rural households in South Luzon and Mindanao led the way, spending 5% and 6% more, respectively, since 2008.
"There's an improvement in their spending and some of the factors that could have influenced this were the positive developments in the rural and agricultural sectors which the government backed," said Stephanie Tanada, senior account manager for Kantar Worldpanel.
The research group also found that rural households are now frequenting modern channels (hypermarkets, convenience stores and department stores) more, increasing their rate of spending in these outlets by 9%, three times more than those of urban homes.
"The efforts of different brands and retailers to branch outside the metro have paid off," said Barra.
Coffee brand Nescafe topped the list of the most frequently purchased brands in rural areas, followed by Lucky Me and Ajinomoto.
While the demand for personal care products, which include whitening soaps and hair conditioners, again outpaced their urban counterparts. Hair conditioners led the way with a 19% increase in demand.
However, rural homes still prefer traditional channels (sari-sari stores, groceries and public markets) rather than modern channels, according to the survey.
Rural households visit traditional stores five times a week while they only frequent modern channels twice a month.
Kantar Worldpanel hopes that the results of the survey would help investors to consider rural markets to be a fast emerging market.
"It is important to look at what Filipinos prioritize to buy for their households so that brands, retailers and marketers and organizations in general can strategize to reach and recruit more shoppers in new geographies, new targets, new segments or new occasions," explained Barra.
Kantar Worldpanel followed the standards set by the National Statistics Office regarding their classifications for urban and rural households. The study was conducted among 3,000 rural and urban households.