Premium FMCG consumption expands beyond urban centres: Worldpanel India

New Delhi: Worldpanel India has released its latest insights on premiumisation trends within the country’s FMCG sector, highlighting the expansion of premium consumption from metro elites to rural households and the emerging drivers of growth.

Premium brands currently account for roughly 15% of FMCG volumes across categories including detergents, bar soaps, toothpaste, tea, edible oils, biscuits and skin creams. While premiumisation slowed in 2024 due to softer rural demand, long-term consumption patterns indicate sustained growth as households across urban and rural India become increasingly aspirational.

Rural India has seen a notable rise in its contribution to premium FMCG volumes, climbing from 30% in 2021 to 42% in 2025 for super-premium categories and exceeding 50% for affordable premium offerings. Among metropolitan consumers in the SEC A1 segment, spending is shifting from essentials such as groceries and dairy products to lifestyle-led categories including housing, travel, luxury vehicles, smartphones and home décor.

Local brands focusing on health, natural and functional attributes are capturing market share in super-premium segments, often growing faster than established international players. Examples cited include Burhani Liquid Dishwash in Madhya Pradesh, AVT Gold Cup Tea in Tamil Nadu, and Meera Shikakai Shampoo in Karnataka and Odisha.

Smaller, more affordable pack formats are also contributing to growth by encouraging trial and penetration without compromising the premium experience. Notable examples include Sensodyne (75g), Nabati wafers (30g) and Tresemme (6ml). Leading premium brands such as Dove, Malkist, Sensodyne and Taj Mahal Tea have similarly adopted accessible pack sizes to balance premium positioning with wider reach.

Despite rising adoption of e-commerce and quick commerce, premium FMCG remains underrepresented in fast-delivery channels, suggesting potential for further expansion, particularly in categories such as toothpaste, skincare and packaged foods.

The report also highlights that premiumisation extends beyond FMCG. Sales of luxury housing above Rs 3 crore grew 80% in 2024, premium smartphone volumes rose 8% year-on-year in Q2 2025, and luxury car sales increased 6% in 2024, surpassing 50,000 units annually, reflecting a broader shift toward aspirational consumption.

Commenting on the findings, K. Ramakrishnan, Managing Director, South Asia, Worldpanel by Numerator, said, “Premiumization in India is no longer restricted to metros or high-income households. Rural consumers are becoming aspirational, local disruptors are redefining what ‘premium’ means and even the most affluent households are rethinking priorities. The future will be about delivering value-led premium experiences through the right packs, right attributes and right channels. For brands, this is both a challenge and a golden opportunity.”