What's new in 2012: Consumer
India may be one of the world's largest economies, but its growth story has been marred by the absence of a major player -- India's villages. But this is now changing.
India may be one of the world's largest economies, but its growth story has been marred by the absence of a major player -- India's villages. But this is now changing. As Pradeep Kashyap, considered the father of rural marketing and the CEO of Mart, a consultancy on rural markets, put it, "The urban market has saturated. How many more mobile phones or pressure cookers can one sell in cities? Everyone already has one."
Since 2010, Hindustan Unilever, the country's largest fast moving consumer goods (FMCG) company, has been on a major extension drive, reaching out to 7.5 lakh rural outlets. South Korean automobile manufacturer Hyundai, whose market share fell from 20 per cent to 19.7 per cent in 2010, plans to revive its fortunes in 2012 by launching a car specifically designed for the rural market. And if to overcome lack of grid power, Coca Cola launched a chest cooler that operates on solar energy, Godrej launched Chotukool, a refrigerator that doesn't have a compressor, but a cooling chip with a fan and is priced as low as Rs 3,500.
According to experts, not only is the growth story stagnating in urban markets, income levels in semi rural and rural areas have increased. In the last 10 years, India has experienced eight good monsoons, the dairy and poultry business is seeing phenomenal growth, and even the handicrafts sector is taking off.
A November 2010 study by The Nielson Company states that the FMCG market in rural India is tipped to touch US$ 100 billion by 2025 on the back of 'unrelenting' demand. Another study, by the National Council for Applied Economic Research, states that the average rural family income is expected to rise by 27 per cent in the next five years.
Big hit in 2012: A new crop of consumers
The new year appears poised to prove to be an even 'bigger' year for the rural market. Interest now is at a maximum. Companies are realising that while some problems like bad roads, lack of electricity, etc, persist, it is far less competitive to cater to a rural audience than an urban one.
-- Prashant Mandke, vice president of Anugrah Madison, advertising agency