Uniqueness of Emerging Rural Markets of India

#india is the seventh largest country in the world with a population of approx. 1.3 billion, second only to China. According to the last census data of 2011, nearly 70% of the country’s population predominates in #rural livelihood i.e. approx. an overwhelming 83.3 crore of people populates and drive the backbone of Indian economy through agriculture and other forms of self-employment like fishing, pottery, traditional dying arts of weaving and painting, poultry, and dairy-related farm activities. In the minds of common man, the word #Rural paints a vivid picture of huge acres of land painted lush green with a very poor farmer working very hard day and night to raise the crops tenderly, yet, not having enough to feed his family even two meals a day. However, the official definition by NSSO governs that #rural is anything that has:

1. An area with a population density of up to 400 per sq km.
2. Villages with clear surveyed boundaries but no municipal board
3. Minimum of 75% of male working population involved in agriculture and allied activities.?

RBI guidelines lay the #rural areas with a population of less than 49,000 (tier -3 to tier-6 cities). However, from marketing point of view, #rural market is any geographical location that has a population of less than 20,000. Hence, looking at the above statistics, #rural India contributes to a substantial percentage of India’s GDP and yet, for the private sector, it is still the largest untapped marketing potential.?

#Ruralmarketing in India follows, in reality, a two way trajectory

1. #Rural to urban: the produce of the villages is made available to urban market such as agricultural products like crops, cereals, vegetables and fruits, pottery, the great weaves and stitching designs, and handcrafted items like paper maché from Jammu and Kashmir, bamboo crafts from Assam, choir crafts of Odisha, ivory crafts of south India, etc., dairy and milk products as well as poultry, meat, apiary business, etc.
2. Urban to #rural: this is mostly the unrealized potential for the private sector, making FMCG (Fast Moving Consumer Goods) such as television, soaps, detergents, toothpaste, textiles, etc. available to the poor farmers of India at a cost that they can afford. It also includes #Rural Producer Empowerment which means that empowering the people of villages with knowledge about latest technologies available that can increase their yield with minimum labour and investment cost and providing them with the raw materials such as high yielding seeds, tractors, latest farm equipment, fertilizers, etc. at a reasonable rate so as to allow them to have profit and flourish after their produce.

Are #rural market is very different from urban market?

?First, it is largely an unorganized sector where the population potential is not only enormous, but scattered as well which makes proper logistics arrangement a big challenge.?

Secondly, owing to large geographical area of India, the cultural and linguistic diversity as well as the caste system makes every village, a different mini market demanding personalized marketing strategies. Due to change in dialect, the same ad commercial which may be a great hit in one part of the state, may be summarily rejected in the next nearby village.?

Third, the low per capita income of the poor which is now forcing them to move from villages to cities, is also the most important barrier in improving the sales in villages. However, due to many government schemes and works of a varied number of NGOs as well as CSR initiatives of some of the reputed private companies, such as the “project Shakti” of the Hindustan Unilever in 2001, the purchasing capacity of the village consumers is on the rise.?

Fourth, the stubbornness of holding onto traditional value system is a major obstacle in driving the economy forward. The best example is using of cloth instead of hygienic sanitary napkins during the monthly periods of the women folk.?

Fifth, the income of the rural customer is largely seasonal and hence, their purchasing capacity is also largely seasonal and based largely on crop production cycle.?

Sixth, the illiteracy of the poor demands that the advertisements be mostly in form of audio-visuals like TV commercials, nukkar natikas and dramas in the village fairs rather than banners and writing pamphlets and other forms of print media. Thus the strategy of marketing in rural India generally must involve the village headman, the panchayat, or the school headmaster or the anganwari workers whom the villagers follow as a role model.?

Seventh, the infrastructure development in Rural India is still at its nascent stage, with lack of proper roads and electrification etc. thus the transportation and warehousing of perishable consumables become a huge challenge. However, with the latest government initiatives like 100% electrification of India and “gram sarak yojna”, and free Wi-Fi available in every village, the scenario is bound to change rapidly in the years to come.

Eight, there are a lot of local innovations in the name of Jugad technology and local dummy brands that hinders the introduction and polarizing of the company’s branded products. However, in certain products, owing to increased knowledge exchange the rising trend of using the branded products and the status symbol associated with branded products is also on the rising trend.?

Last but not the least, in-effective distribution channels forces the companies to create fresh channels in every village. The unorganized distribution chain necessitates the opening of retail outlets in villages. The village haats are the heart of rural marketing and often the only source of availability of goods to the consumer.?They are the readymade distribution networks prevailing since ages. What’s most attractive is, these haats offer an opportunity of barter system and free flow of cash. Credits are also a means of finance since every customer knows every other customer.

Finally, the products destined for rural customers need to be at low cost, high utility oriented, the modified product with minimal sophisticated packaging cost and small unit packaging. Keeping in mind the large size and growing income the aspiration and knowledge of these customers are growing which is making these markets very important for future. So #emerging markets are becoming strategic necessity of survival for all companies.