BrandPulse Global on India's resilient sachet economy & rise of q-commerce

India’s economy has long thrived on its unique “sachet model,” a system where consumer goods, particularly in the FMCG (Fast-Moving Consumer Goods) sector, are sold in small, affordable packs. The Indian FMCG sector is valued at over $230 billion as of 2023, and sachet-based sales contribute significantly to this figure. BrandPulse Global, a leading consumer research firm, has highlighted how this model, offering products in ₹2, ₹5, and ₹10 sachets, continues to be a cornerstone of India’s retail landscape. In fact, sachet sales account for nearly 70% of shampoo sales in India and contribute significantly to categories like 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."

Kirana Stores: The Heart of India's Retail Ecosystem

Kirana stores, the small neighborhood shops scattered across India, are the backbone of this retail model. India has approximately 13 million Kirana stores, contributing to more than 90% of the country’s FMCG sales. Operating in a hyperlocal, cash-based economy, these stores offer personalized service and even credit to their loyal customers—something modern retail chains and Quick-Commerce (Q-Com) platforms have yet to replicate. Despite the rise of Q-com platforms like 10-minute grocery delivery services, these stores remain resilient and indispensable, especially in rural and semi-urban areas.

BrandPulse Global emphasizes that Q-com platforms largely cater to urban, tech-savvy, and higher-income customers, while Kirana stores serve a vastly different demographic. With nearly 60% of India’s population living in rural areas, sachet-sized products and Kirana stores play a critical role in reaching the masses. In fact, rural markets account for 35% of the FMCG sector’s total revenue, with much of it driven by sachet-sized products sold through Kirana stores.

Sachet Economy vs. Q-Commerce: A Coexistence

Though Q-com platforms are gaining ground in urban markets, BrandPulse Global research reveals they will not displace India's sachet-driven economy. The firm believes that these two models will coexist, each catering to their unique consumer base. Q-commerce in India, valued at around $3 billion in 2022, is expected to grow at a CAGR of 25% through 2027. The strength of the sachet economy lies in its low prices, accessibility, and personalized service, all of which are irreplaceable in rural and semi-urban areas.

"Q-commerce platforms in India are evolving rapidly, focusing on high AOV and premium products to cater to urban consumers seeking convenience. As the market matures, there is immense potential for expansion into rural areas, where a hybrid model could bridge the gap between traditional essentials and modern, on-demand services. The future of Q-commerce is about balancing high-value offerings with broader accessibility, making quick delivery a reality for every Indian household," says Riya Maity, Business Head of BrandPulse Global.

The Future of India’s Retail Landscape
India’s sachet economy is here to stay, ensuring that Kirana stores will continue to thrive, even in the face of digital disruption from Q-Com. BrandPulse Global predicts that as Q-Com platforms expand, they will cater to niche, high-income urban markets, while Kiranas will continue to serve the broader population. With India’s FMCG market expected 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 integral to the country's retail fabric for years to come."