Essay About Rural Areas And Per Cent

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Organized retailing serving the bottom of the pyramid
Symbiosis Center for Management and Human Resource Development
Team:
Phone
E-Mail
Archit Sureka
+919860929309
[email protected]
Sinjani Mondal
+919860928892
[email protected]
1. Executive Summary
“Low-income markets present a prodigious opportunity for the worlds wealthiest
Companies Ð- to seek their fortunes and bring prosperity to the aspiring poor.”
–C.K. Prahalad and Stuart L. Hart,
The Fortune at the Bottom of the Pyramid
Indias seventy-percent population lives in rural areas, which translates into a potential
consumer base of about 700 million individuals (more than the population of United
States and EU combined).
Time and again studies have shown that the rural consumer is no different from urban
consumers in terms of aspirations for a better lifestyle. However he is constrained by
intermittent & uncertain cash flows, poor infrastructure, lack of availability of quality
products and services and high dependence on feeder towns & cities.
The paper deals with understanding the dynamics of growth in the Indian market and has
tried to evaluate the highly attractive rural market in India -the Bottom of Pyramid (BOP)
– on various parameters in terms of present scenario, characteristics, challenges and future
growth potential.
Through the paper we have tried to study the feasibility of setting up a ÐSampoorna
Grameen Bazaar (SGB) across the State of Madhya Pradesh to cater to the needs of the
population residing in rural and backward areas outside the retail and distribution
network of manufacturing companies. We begin the paper by giving a brief project
rationale. We then go on to do a problem-opportunity analysis taking various factors into
consideration. Subsequently, we conclude the paper by looking at the future prospects of
such projects across the country.
Table of Contents
1. Executive Summary
2. Introduction
2.1 Statistics about the Bottom of Pyramid (India)
2.2 Retail Formats
3. Some Live Examples of Organized Rural Retailing in India
4. Problems in Rural Retailing
5. Opportunities in Rural Retailing
6. Changes in the Indian Rural scenario:
6.1 Rural Consumer Insights
7. THE CASE STUDY: Sampoorna Grameen Bazaar (SGB)
7.1 Situational Analysis
7.2 Objectives
7.3 Approach
7.4 Proposed Facilities
7.5 The Opportunity
7.6 Challenges
7.7 Why Madhya Pradesh?
7.8 Government Support
7.9 Benefits to Farmers
8. Conclusion
9. References
2. Introduction
The Indian rural market today accounts for only about Rs 8 billion (53 per cent – FMCG
sector, 59 per cent durables sale, 100 per cent agricultural products) of the total ad pie of
Rs 120 billion, thus claiming 6.6 per cent of the total share.
Rural India is like a pyramid. The top of the pyramid is occupied by the rich farmers and
businessmen. They constitute around 5 per cent of the population. The next level belongs
to those with a regular income and the base of the pyramid is occupied by the vast
majority of the people who are daily wage laborers.
Organized retail in India which stands at around 3% of the total retail is showing signs of
bigger and better growth of around 30% CAGR.
Source: CEIC, CSO, AC Nielsen, Morgan Stanley Research (FY 2010 and FY 2015 are estimated figures)
(PFCE – Private Final Consumption Expenditure)
2.1 Statistics about the Bottom of Pyramid (India)
Population: 756 million
Number of Households: 151.2 Million
Annual Income: Upto Rs. 90,000
Estimated annual size of the rural market –
Rs. 65,000 Crore
Durables
Rs. 5,000 Crore
Agri-Inputs (including tractors)
Rs. 45,000 Crore
2 / 4 Wheelers
Rs. 8,000 Crore
(Source: The marketing