Understanding Rural Consumer Behaviour Tapping the Future Market
UNDERSTANDING RURAL CONSUMER BEHAVIOUR : TAPPING THE FUTURE MARKET
SHWETA Email – shweta.esha@gmail.com
1. INTRODUCTION
It is widely acclaimed that India is one of the largest consumer market in the world. Estimation signs that the Indian consumer market is likely to grow four times by 2025. (McKinsey Report - 'The Rise of Indian Consumer Market '). India 's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a Compound Annual Growth Rate (CAGR) of 10 percent.
2. INDIA’S RURAL SCENARIO Real India lives in villages. About 75 percent of Indian population lives in rural area. In the country we have 6.45 lacs villages out of which only 13 percent villages have population above 2000. More than 50 percent of the sales of FMCG and Durable companies come from the rural areas. The McKinsey Report on “the Rise on Consumer Market in India” predicts that in twenty years the rural Indian market will be larger than the total consumer markets in countries such as South Korea or Canada today, and almost four times the size of today’s urban Indian market and estimated the size of the rural market at $577 Billion.
The urban areas constitute the fastest-growing part of the Indian market. Presently, the rural market accounts for a hefty share in most market segments– 55 percent of LIC policies, 70 percent of toilet soaps, 50 percent of TV, fans, bicycles, tea and wrist watches. With urban markets getting saturated, most companies are looking at huge potential in rural markets. Major corporations have seen great success with innovative strategies such as smaller packaging. Fast Moving Consumer Goods (FMCG) companies have creams and soaps priced at 5, hair oil and shampoo sachets at 2 and small Coke at 8. Companies have developed special products for the rural market, like Chic Shampoo sachets priced at 1, Parle G Tikki Packs at 2, customised televisions by LG, Shanti Amla oil by Marico. Even with increasing
SHWETA Email – shweta.esha@gmail.com
1. INTRODUCTION
It is widely acclaimed that India is one of the largest consumer market in the world. Estimation signs that the Indian consumer market is likely to grow four times by 2025. (McKinsey Report - 'The Rise of Indian Consumer Market '). India 's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a Compound Annual Growth Rate (CAGR) of 10 percent.
2. INDIA’S RURAL SCENARIO Real India lives in villages. About 75 percent of Indian population lives in rural area. In the country we have 6.45 lacs villages out of which only 13 percent villages have population above 2000. More than 50 percent of the sales of FMCG and Durable companies come from the rural areas. The McKinsey Report on “the Rise on Consumer Market in India” predicts that in twenty years the rural Indian market will be larger than the total consumer markets in countries such as South Korea or Canada today, and almost four times the size of today’s urban Indian market and estimated the size of the rural market at $577 Billion.
The urban areas constitute the fastest-growing part of the Indian market. Presently, the rural market accounts for a hefty share in most market segments– 55 percent of LIC policies, 70 percent of toilet soaps, 50 percent of TV, fans, bicycles, tea and wrist watches. With urban markets getting saturated, most companies are looking at huge potential in rural markets. Major corporations have seen great success with innovative strategies such as smaller packaging. Fast Moving Consumer Goods (FMCG) companies have creams and soaps priced at 5, hair oil and shampoo sachets at 2 and small Coke at 8. Companies have developed special products for the rural market, like Chic Shampoo sachets priced at 1, Parle G Tikki Packs at 2, customised televisions by LG, Shanti Amla oil by Marico. Even with increasing
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