Recent market surveys have shown that markets in rural India will be the next battle ground for companies in India. The markets which were traditionally focused on the urban populace now see a tremendous growth opportunity in this little explored rural territory. Companies have now realized the importance of this 600million- plus market which could be crucial for them to maintain their growth rate.
Studies show that the rural market in India will witness the fastest growth trajectory as compared to urban markets in the coming years. The rural consumer is expected to account for a major chunk of multiple product lines driven by improving economic condition and an increasing focus of companies in strengthening their rural distribution networks. Rural Indians are developing desire for packaged foods, personal care products, consumer durables and IT products, two- and four-wheelers, and fashion accessories. Over the last five years, some consumer product companies have recognized the potential of rural markets and invested time and resources to tap into this opportunity – understanding and segmenting the consumer, based on their spends and lifestyles.
According to a study by research firm The Nielson Company, the fast moving consumer goods market (FMCG) in rural India is tipped to touch US$ 100 billion by 2025 on the back of an “unrelenting” demand driven by rising income levels. According to the study, rural India now accounts for more than half of sales in some of the largest FMCG categories. Rural purchasing power has grown faster than urban in the last six quarters. Seemingly urbane brands in categories like deodorant and fabric softener are growing much faster in rural India than urban.
What remains a major concern is to make the end-rural consumer aware of the presence of the brand. Traditional advertising like television may rather remain ineffective due to frequent power outages and Medias like radio might also not be impactful due to reception issues.
For companies to be able to tap into rural markets, a more effective method needs to be adopted to maximize penetration.
