India’s economy, particularly in the FMCG (Fast-Moving Consumer Goods) sector, has long been bolstered by its unique “sachet model”—a system where products are sold in small, affordable packs. Valued at over $230 billion as of 2023, the Indian FMCG sector derives a significant portion of its revenue from sachet sales.
According to BrandPulse Global, a leading consumer research firm, this model, with products priced at ₹2, ₹5, and ₹10, remains a cornerstone of India’s retail ecosystem. Sachets account for nearly 70% of shampoo sales and also dominate categories such as detergents, confectionery, and skincare products.
“The sachet model democratizes consumption, making premium goods accessible to the broad base of Indian society,” says BrandPulse Global. “From shampoos to detergents and spices, sachets ensure that even low-income consumers have access to branded products.”
Central to this sachet-driven economy are Kirana stores—small neighborhood shops that dominate India’s retail landscape. With over 13 million Kirana stores across the country, they account for more than 90% of FMCG sales, thriving on hyperlocal, cash-based operations. These stores provide personalized service, often offering credit to loyal customers, a feature that modern retail chains and Quick-Commerce (Q-Com) platforms have yet to replicate.
Even as Q-Com platforms, offering 10-minute grocery deliveries, gain traction in urban India, Kirana stores remain essential, particularly in rural and semi-urban areas, where they play a critical role. BrandPulse Global highlights that with 60% of India’s population living in rural areas, sachet-sized products and Kirana stores provide accessibility to branded goods that larger platforms cannot match.
While Kirana stores hold their ground, Q-Commerce (Q-Com) is rapidly evolving, primarily catering to urban, tech-savvy, and higher-income consumers. In 2022, India’s Q-commerce market was valued at approximately $3 billion, with an expected CAGR of 25% through 2027.
BrandPulse Global underscores that these two retail models—sachet-driven Kirana stores and Q-Commerce—will coexist, each addressing the needs of distinct consumer bases. Riya Maity, Business Head at BrandPulse Global, believes that as the market matures, there’s potential for Q-Com expansion into rural areas through a hybrid model, blending traditional products with modern, on-demand services.
“Q-Commerce platforms are focusing on high Average Order Value (AOV) and premium products for urban consumers seeking convenience. However, the future of Q-Commerce lies in balancing these high-value offerings with broader accessibility, making quick delivery a reality for every Indian household,” Maity says.
Looking ahead, India’s sachet economy, along with its Kirana store network, is expected to thrive despite the rise of digital retail platforms. BrandPulse Global predicts that while Q-Com will grow, serving niche, high-income urban markets, Kirana stores will remain integral to the broader population. With India’s FMCG market forecasted to reach $1288 billion by 2030, the coexistence of these two models is inevitable.
“It would be irrational to believe that Q-Com could wipe out the sachet model,” concludes BrandPulse Global. “India thrives on its sachet economy, and Kirana stores will remain central to the country’s retail fabric for years to come.”
Key Highlights:
- India’s sachet model remains resilient, contributing significantly to the $230 billion FMCG sector.
- Kirana stores dominate with over 90% of FMCG sales, particularly in rural and semi-urban areas.
- Q-Commerce, valued at $3 billion in 2022, is expanding rapidly but targets urban, high-income consumers.
- BrandPulse Global predicts that the sachet economy and Q-Com will coexist in India’s diverse retail landscape.