Indian Rural Market-Reality or Myth?
Rural market potential: Reality or a Myth?
In the modern era every marketer is reaching out to different segments of society, to different sectors, to different households and to different individuals. The empowerment spree of rural market is on its high in the last couple of years due to rising income in these sections.
Rural market has led to a lustful gold rush for the allegorical lucrative fortune which was discovered due to the proverbial BOP (Bottom of the Pyramid). The propellers for this progress include government initiatives and schemes, infrastructure development, industry progress across economies and the emphasis on local employability. In “The Fortune at the Bottom of the Pyramid” written by CK Prahalad it is clearly concluded that rural markets are the future battle ground for the corporate. In other words “If you built for the poor, rich will come. If you built if for rich, poor cannot come”
The BOP as a sector incorporates an approximate of 4 billion people who live at below USD 2/day. The dominant assumption of marketers and corporate is that “there is no money at the BOP.” However the reality is that “BOP offers huge opportunity due to their large numbers.” If given quality the BOP consumers can also pay a high premium for the products and services they are willing to avail. The dominant assumption of BOP market is that distribution and logistics is very difficult and therefore showcases a major road block for participation of large firms and MNCs. The reality is that with Urbanization and wide spread migration of the poor to cities, distribution/logistics have become less complex and easier. “Media Dark” areas and dispersed communities have always been an obstacle to business houses, however different projects like, Project Shakti and “AVON Ladies” in Brazil have emerged as solution in different contexts.
We say customer is the king, just to mention the figures approximately half of the planets population lie in the bottom of the pyramid. In other words the Jewel in the Crown is the rural market. The rural consumer has its needs, needs are being converted into demands backed by increasing purchasing power, now its the time for the business houses to act, so these demands can be met.
If we talk only about India, 12 percent of worlds population resides in rural India. Rural markets are going at double the pace of urban markets for many product categories, the FMCG market has grown at 23 percent, durables market has grown at 15 percent and telecom is growing at 31 percent in rural India. The number of rural consumers is around 800 million which itself is a large consumer base. According to international consultancy firm Selent, rural markets in India will grow to a potential of USD 2 billion by 2015 from the current 500 million.
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