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FMCG consumption pattern shows divergent trends- Tier-2 and 3 consumers prefer second rung brands in noodles, well-entrenched brands in biscuits – OkCredit report

 Last year, Ok Credit captured 0.5% of the total value of GDP, that is, $40 billion worth of transaction.

  • Local brands are preferred in their home states owing to the factories and distribution network.
  • Parle emerged as the market leader in the states of Gujarat, UP, Rajasthan, Maharashtra, MP, and Chhattisgarh.
  • User attributes- Middle-aged merchants are the most active users of the OkCredit app. Electronics saw a higher number of middle-aged users than other sectors.
  • More women from tier-3 towns use OkCredit for digital bookkeeping than those in tier-1 and tier-2.


New Delhi, 29 January 2021: Ching’s, Yippie and Top Ramen, the three noodle brands standing next only to Maggi, the country’s favourite noodles are finding increased preference among the tier-2 and tier-3 population. Maggi remains the undisputed leader in the noodles category, with a growing preference seen in tier-1 locations. While Maggi still remains the highest consumed even amongst tier-2 and tier-3 population, a change in preference has been seen in favour of the next in order brands.

These are a few among the several findings of a report done by OkCredit, a digital bookkeeping app. The app is used by mom- and-pop stores, essentially small and medium businesses (SMBs) to record credit, an integral part of transactions in India. Given its reach to 95% pin codes and more than 2.3 crore registered merchants, the platform has extensive data on consumption patterns across tier-1,2, and 3 towns. The report also highlights demographic trends in the adoption of digital tools such as bookkeeping by neighbourhood stores.

SMBs are rarely a part of the mainstream conversation, even though a significant part of the GDP is contributed by them. Through this report, our intent is to bring SMBs at the centre of the conversation. They are the real monitors of the consumption story in “Bharat” and we are fortunate to have a pulse on that, through our network”, said Harsh Pokharna, co-founder and CEO of OkCredit.

Contrary to the popular perception that women are usually missing from traditional businesses, about 7-15% of users on OkCredit’s platform are women. Interestingly, more women from tier-3 towns use OkCredit for digital bookkeeping than those in tier-1 and tier-2. The concentration of women is higher in apparel related businesses as compared to others.

The report primarily delves on three major areas- telecom, FMCG and modes of payment used at the neighbourhood stores. A large base of mobile recharge merchants gives OkCredit deep insights on the pre-paid user behaviour, operator wise. As per the data, Jio is a pan-India leader except the markets of Goa and Kerala where Vodafone Idea is still at the top in terms of preference. Similarly, Airtel has made significant progress in tier-3 locations, on the back of 2G upgrades.

The report further highlights that among SMBs, cash is still the most common method of payment with over 50% payment made to neighbourhood stores in this mode. This is particularly true for high-value categories like hardware and jewelry and is mainly due to the upper limit on the total transactions, both in terms of individual transactions and the daily limit amount, for digital payments.

Due to this limitation, businesses with small ticket size transactions have a higher percentage of digital payments. This is followed by digital payment methods such as UPI cornering over 30% of total payments. Cheque payment was minuscule at around 2% of the total payments made.

The extensive data has been possible only because of network effects seen in OkCredit’s business, wherein one merchant on the platform leads to several other sign-ups, increasing virality and thus the customer base. Post lockdown, the platform saw 40 out of every 100 new registrations coming from existing merchants, helping them develop a super network of merchants. As an example- even in a remote location like Tohana in Haryana, a single merchant is connected to as many as 55 merchants.

In 2020, the company bolstered its solutions for SMBs by launching two more products- OkStaff and OkShop. OkShop helps a merchant to create his own digital shop while OKStaff acts as a means to manage its employees. It aims to become a 360-degree business solution for SMBs by empowering them with tools in the form of OK Apps.

The next era will be transformational for small businesses as both internet and software consumption is going to go through the roof. A strong network effect will be key to digitizing the 50 million SMBs over the next decade”, said Gaurav Kunwar, co-founder of OkCredit.

About Mahender Bansal

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