2. RURAL MARKETS
CURRENT LANDSCAPE – RURAL INDIA
OPPORTUNITIES FOR MARKETERS
CONSTRAINTS
POSSIBLE SOLUTIONS
MICRO FINANCE - INDIA
END NOTE
IIPM AHMEDABAD 09 - 11 2
3. Village defined – population less than 5000
6, 42,000 villages – spreaded over 3.5 million square km.
Contribution to GDP – less than 20%
Annual Per Capita Income - $ 550 p. a
Fact – 70% population live in Rural India
NSS (National Sample Survey) – 35% households engaged in non –
agricultural activities.
IIPM AHMEDABAD 09 - 11 3
4. Kirana to Malls
Urban to Rural areas
MNCs keen to enter Indian Rural Markets
Indian Companies – Urban to Rural
Emerging Microfinance Concept
IIPM AHMEDABAD 09 - 11 4
7. Retail
Contribution towards Rural India
Wholesale trade
Sale, maintainance and repair of motor vehicles
Construction
1% 2% 4% Electricity , Gas & Water supply
2% 4%
2%
Manufacturing
5% 39%
2%
Mining & Quarrying
8%
Other Activities
Community, social & personal services
0%
Health & social work
0% 26%
Education
2% Public administration, defence & social security
1%
0% 1%
Real estate, renting & business services
Financial Intermediation
Source: Economic Census All-India Report (2005), Govt. of India, Ministry of
Statistics and Programme Implementation. Post & Telecommunication
Transport, Storage
Hotels & Restaurants
IIPM AHMEDABAD 09 - 11 7
8. 53% FMCG sales – Rural India
50% LIC policies – Rural Customers
Kisan Credit Cards – 40 million holders as equal to urban areas
Hero Honda – 50% sales Rural Market 2008 – 2009
120 million bank accounts – 70 million in Rural Areas
48% Rural Income – Agricultural sector
92% villages covered – Telecom Sector
Private Sectors – initiate to educate 70% people
Create Rural Entrepreneurs
Emerging Microfinance Concept
IIPM AHMEDABAD 09 - 11 8
9. Huge Imbalance between production & demand
Increasing logistics & transportation costs
Lack of production planning
Lack of market research
Unorganized & immature market
Illiterate & uneducated people
Underdeveloped & Poor people
Lack of infrastructure
IIPM AHMEDABAD 09 - 11 9
10. Bring together Rural Entrepreneurs – standardize products, marketing under
common brand, revenue sharing equal proportion
Awareness programs – Rural Entrepreneurs
Careful planning required
Public – Private Partnership – to explore rural areas
Start – production to sales efforts
IIPM AHMEDABAD 09 - 11 10
12. Urban Areas
have become a
magnet of poor
HUL – JAIPUR
SHAKTI FOOT
ITC ARVIND
ICICI E-CHOUPAL EYE
SELF – HELP HOSPITAL
IIPM AHMEDABAD 09 - 11 12
13. Focus on direct selling
Shop –in-shop stores double to 1200 by April
Pack Model – smaller packing – multiple choices
Product Innovation
Group to re-look – product innovation, rural marketing
No Forex Risk Attached
B2C Model – 50-60% y-o-y higher than denim
IIPM AHMEDABAD 09 - 11 13
14. 1999 start up – 6 new growth opportunities
Confectionaries & sweets – candy fastest growing product @ BOP
Ayush – Consumer Health Care
Sangam – E-tailing program for daily ordering & delivering.
Addressing needs of top – end consumers
Water facility
Project Shakti – direct – to – consumer initiative
IIPM AHMEDABAD 09-11 14
15. Women’s Self Help Groups – Entrepreneur Development training
Educating consumers on health & hygiene
4 goals of Project Shakti:
i. Plan to increase reach – Rural Market
ii. Attempt to increase awareness
iii. Change attitudes
iv. Catalyze rural affluence & drive growth
Andhra Pradesh – 70% involved in SHG
Total – 1 million nationwide
Investment > Rs. 20,000> 10% margin
Shakti Vani programme – trained communicators, driven messages on sanitation, good hygiene
practices & women empowerment
Year end 2008 – 45,000 entrepreneurs covering 1,00,000 villages across 15 states reaching 3
million homes
IIPM AHMEDABAD 09-11 15
16. States covered – 10
Villages covered – 40,000
# of e-Choupal – 6,500
Farmers e-empowered – 4 million
Expanding spectrum of commodities – wheat, pulses, soya, maize, spices,
coffee, aqua – products
Farmers – rise in income level
Compare price @ Chicago Trading Board too.
Choupal Saagar – 24 hubs, 3 states, grow by 100 by 2010
IIPM AHMEDABAD 09-11 16
17. E-commerce classification:
a. B2C – online selling by business unit to an individual consumer
b. B2B – Online selling by business to business
c. C2C – Online selling by consumer to another consumer
Today:
Customer is the king – 24*7 service through email, chat & toll free
Supply chain
E.g – ITC e-choupal
Better information
Convenience
Targeted & Mass Customization
Global Reach @ low cost
Value Added Service with best Customer service
“Shopping Anywhere, Anytime”
IIPM AHMEDABAD 09-11 17
18. Public – Private partnership help rural grow
Literacy rate to grow & make people grow
Awareness highly required
Micro Finance concepts need to be boosted more
Need to encourage youth – towards rural market & opportunity
Schools, Colleges & B-Schools – Importance of Rural Markets
IIPM AHMEDABAD 09 - 11 18