The Evolving Rural Market

In my previous blog post, I have mentioned the first reason why 70% of rural India is still left unexplored.

Although there has been a great deal of interest by companies in rural market, but still there are several more reasons for the slow market penetration.

The second reason which I would like to share with you all is the myth of Rapid Urbanization i.e.  the pace of migration from rural to urban centres is very rapid, which of course means that rural India is shrinking at a rapid pace. Perhaps the companies feel its not worth the effort.

But the truth turns out to be different. According to the latest census report, of the total migrating population of 98 million, 61 million have moved to rural areas and 36 million have moved to urban areas. The rate of migration from Urban to rural is much more than rural to urban.

Predictions suggest that while the urban population will continue to grow, the share of rural will come down only marginally till the year 2020, and nearly two-third of the country’s population which is equal to 0.82 billion individuals will continue to live in villages.

So, it would be the right time for marketers to enter the arena sooner rather than later.  

Conflicting Rural definition

At least 40 per cent of the world's market are rural markets. They represent more than three billion people whose current consumption is estimated to be at-least four trillion dollars per year. The fragmented nature of competition as well as the low density of population has always make rural market less attractive to serve. 

Even after a lot of challenges and difficulty in the rural market there have been in fact, companies that have historically succeeded in rural markets by organising alternative sales and distribution systems to reach rural consumers. Some of the companies to be named are Brooke Bond tea, ITS cigarettes, Coca-Cola, as well as government -sector enterprises such as India Post, Life Insurance Corporation of India and Indian Railways.

Even after a rapid transformation in the rural market in the last 6 years. There are still more than 20,000+ villages in the with a population ranging between 5000 - 10,000 per sq feet, which calculates to 800 million inhabitants accounting for 70 per cent of the India's population which are still left unexplored. 

Do you know WHY?

One of the main reasonss is a conflict in the definition of rural market by various organisations & companies while defining their target audience and designing their marketing & distribution strategies.

Opportunities in Rural Market

§  The rural market in India brings in bigger revenues in the country, as the rural regions comprise of the maximum consumers in this country.

§  Rural Marketing in India Economy covers two broad sections, namely:

o   Selling of agricultural items in the urban areas

o   Selling of manufactured products in the rural regions

§  With the initiation of various rural development programs there have been an upsurge of employment opportunities for the rural poor. One of the biggest cause behind the steady growth of rural market is that it is not exploited and also yet to be explored.

§  The rural market in India is vast and scattered and offers a plethora of opportunities in comparison to the urban sector. It covers the maximum population and regions and thereby, the maximum number of consumers.

§  The social status of the rural regions is precarious as the income level and literacy is extremely low along with the range of traditional values and superstitious beliefs that have always been a major impediment in the progression of this sector.

§  The steps taken by the Government of India to initiate proper irrigation, infrastructural developments, prevention of flood, grants for fertilizers, and various schemes to cut down the poverty line have improved the condition of the rural masses.