The New Rural Consumers- Ready for Big brands
Posted : January 31, 2005 at 9:58 am [IST]
Though many do not agree, I go by what I see in my village that is a typical one and remote too with no electricity even today. The rural India is changing and changing fast. I am of a strong opinion that instead of giving doles and subsidies, if we empower our rural poor, we can have better India. No nation can grow by providing charity to a class. It makes them lazy and the class becomes a liability, where as every thing possible must be done make them assets.
I find roads getting constructed under different schemes. Basically, the contractors don’t follow the specifications. Again the roads are misused and very soon it becomes full of potholes. I am sure if panchayats are made responsible for the construction and maintenance, the situation may improve. Panchayats must be given authority to collect revenues and get a part of it as commission for getting the work in the area done. If the rural population understands its stake, the things can be better.
The rural FMCG (fast moving consumer goods) market has its promise of millions of rural consumers. The marketer need not get frustrated by the crushing poverty of consumers in rural India. All FMCG companies big and small; have come up with same argument and story to justify why marketers treat the Rs 15,438-crore rural FMCG markets like one big black box-an unsegmented mass of poor people, wooing whom simply means a fistful of low-unit-price packs (LUPs)-say in sachets.
A recent AC Nielsen rural report reveals differently. It’s true that of the 122 million households in rural India, a majority are low-income ones, dependent on subsistence farming. However, there are nearly nine million rural households that fall under a different socio-economic-class. They own a pucca house, and the chief wage earner is a postgraduate. They invest in color TV, music system and solar power system. Many have tractors and motorcycles.
Some of the biggest urban brands such as Parle G, Lifebuoy Active and Lux are also big draws in rural India. The basket of high-volume consumables-toilet soap, washing powder, packaged tea, biscuits and detergent cakes-is virtually identical in urban and rural India.
Though rural sales of 50-paise shampoo sachets are almost five times those of urban markets, a 7-ml shampoo sachet, highest contributor in both urban and rural areas, is faced with a double-digit decline in growth.
An average monthly per capita rural spend on FMCG is already at Rs 208, compared to Rs 1,193 for urban areas. Consumption habits are closely mirroring those of urban India. Now a father does not scold his son for wasting toothpaste or soap. I have seen Coke and Pepsi as common offer to guests instead of plain cold water from the earthen pot with a piece of jaggery or some home made sweet. Tea has become universal drinks and small shops are there to supply it in thermo flasks. Rural India provides a challenge. Both product designers and marketers must take it.
“The largest brands by value in the rural market are also the largest brands in urban India. Even in categories dominated by local players like confectionery, packaged salt and biscuits, national brands (Alpenliebe Candy, Tata Salt and Britannia) are gaining ground within the rural universe.
It will be no more correct to doubt the readiness of the rural consumer to purchase and use products that have traditionally been seen as ‘urban’ products. Yet, branded product categories like after-shave lotions, jams, namkins, and sanitary napkins are growing at a scorching pace.
Even architects, bankers and builders must move to their next target for rural housing. Rural housing can become a big business. If innovative and customized designs are offered with good financial products with the same interest rates as in urban area, payments differed to crop seasons and easy paper work. The housing sector can grow into million crore business.
Rural India is coming up to participate in big way in the march ahead.
- Indra
Category: Rural development |
Leave a Comment