A location is defined as rural if at least 75 percent of the population is agrarian. About two thirds of India’s more than 1 billion people live in rural areas, and almost 170 million of them are poor. Poverty is deepest among scheduled castes and tribes in the country’s rural areas.
Rural India can be compared to a pyramid. Rich farmers and businessmen who constitute around 5 per cent of the population occupy the tip. The next level belongs to those with a regular income and the base is occupied by a vast majority of daily wage laborers.
Today, the urban-rural chasm has thinned considerably amongst the top segment of rural India. 50-60 per cent of the rural population is involved in the non-farm businesses and several second-generation rural citizens are opting for white-collar jobs in nearby towns. This in turn has resulted in a growing middle class with a monthly income in rural India - a stark contrast to the past where income was totally dependent on the monsoon, cropping season, etc. Hence rural India has experienced a definite growth in the prosperity levels where there is a growing middle class with regular income and the rural rich are becoming richer.
And then there is the base of the pyramid – an India that is not touched by rural development. A major cause of poverty among rural people in India is lack of access to productive assets and financial resources. High levels of illiteracy, inadequate health care and extremely limited access to social services are common among poor rural people. An integrated, multidimensional and holistic approach to poverty eradication efforts is crucial to preserve and enhance the livelihoods of the poor.
Usually, companies operating in the rural landscape need to handhold rural customers in making informed decisions. Companies must create multiple distribution channels to ensure that their rural marketing becomes a dynamic function. Another characteristic of the rural market in India is that it is extremely unpredictable. Earning and spending capacities of the average farmer fluctuate depending on the vagaries of the monsoon.
‘Thinking big by thinking small’ is the secret to success in rural India.
Rural India with its traditional perceptions has grown up over the years, not only in terms of income, but also in terms of thinking. The rural markets are growing at a faster pace than urban markets, not surprisingly, rural India accounts for 60 per cent of the total national demand. According to a survey conducted by Mckinsey in 2007, rural India with a population of 630 million (approximately) would become bigger than total consumer markets in countries such as South Korea or Canada in another 20 years and it will grow at least four times from its existing size.
The rural consumer is growing and this is the opportune time for players across all industry segments to seize the moment. The retail sector has a huge potential for growth as a study shows that opportunities in rural retail sector were estimated to be over $34 billion in the year 2007, which is expected to touch $43 billion by the year 2010. With India’s rural revolution being governed by rising purchasing power, increased savings and changing consumer habits, we are poised to witness tremendous growth in our country’s rural heartland.
Comat is currently working to increase its network to own and operate nearly 7000 Rural Business spread across 10 Indian states, viz., Uttar Pradesh, Uttarakhand, Tripura, Sikkim, Karnataka, Haryana, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.
We have already set in place partnerships with companies like LIC, ICICI Bank, Hughes and TeamLease to provide access to services such as Education intervention, Vocational Training, Job opportunities, Banking and Insurance to rural communities. The Comat RBC offers private players a huge benefit in its last mile reach, infrastructure, connectivity and credibility. We also work closely with the rural populace towards their betterment and have garnered their support and confidence.