of 33
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RURALMARKETING
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VIDEOVIDEO
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RURAL MARKETINGRURAL MARKETINGRURAL INDIARURAL INDIA-- FOUNDATION FOR ECONOMICFOUNDATION FOR ECONOMICGROWTH AND ITS IMPACT DURING ECONOMICGROWTH AND ITS IMPACT DURING ECONOMICCRISISCRISIS
GROUP-2
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What is EconomicWhat is Economic GGrowthrowth
yy QQuantityuantity of goods and servicesof goods and services producedproduced
yy Process by which a nation's wealth increases overProcess by which a nation's wealth increases over timetime
yy InfluencedInfluenced by natural resources, human resources,by natural resources, human resources,capital resources, and technologicalcapital resources, and technological developmentdevelopment
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INDICATORS OFINDICATORS OF
ECONOMIC GROWTHECONOMIC GROWTHyy Gross DomesticGross Domestic ProductProduct
yy Rate ofRate of inflationinflation
yy IndustrialIndustrial growthgrowth
yy Foreign InstitutionalForeign Institutional InvestorsInvestors
yy Foreign Direct InvestmentForeign Direct Investment
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WHY RURAL INDIAWHY RURAL INDIA
yy 742742 MillonMillon peoplepeople
yy
Rural is bigger than urbanRural is bigger than urban
yy The growth in rural markets are zooming faster than the urbanThe growth in rural markets are zooming faster than the urbanmarkets at 25%markets at 25%
yy Want of gradual urbanizationWant of gradual urbanization
yy Growth in number of establishmentsGrowth in number of establishments
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VIDEOVIDEO
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IT HAS POTENTIALIT HAS POTENTIAL
SOCIO ECONOMIC CHANGES
INCREASE IN LITRACY LEVEL
INFRASTUCTURE FACILITIES
INCREASE IN INCOME
INCREASE IN EXPECTATION
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CONTRIBUTION
OF UNIONBUDGET(NREGA)
RURAL MARKET
ACCOUNTS FOR 8BILLION
GROWTH INNON FARM
SECTOR
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TREND OF
GRADUALURBANIZATION
RURAL URBANLINKAGE
FALL IN RURAL-URBAN
MIGRATION
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Estimated annual size of theEstimated annual size of the
rural marketrural market
SECTOR Annual share
FMCG Rs 65,000 Crores
Durables Rs 5,000 Crores
Agri-inputs (incl. tractors) Rs 45,000 Crores
2 / 4 wheelers Rs 8,000 Crores
Total Rs 1,23,000 Crores
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A NEW RURALA NEW RURAL
ECONOMYECONOMYyy CSO dataCSO data
3 Conclusions
indicatesthat number
ofestablishments hasincreased
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RuralRural vsvs UrbanUrban
yy No of middle class house holdsNo of middle class house holds
(income between(income between RsRs. 45000. 45000-- 215000)215000)
Rural 27.4 millionRural 27.4 million
Urban 29.5 millionUrban 29.5 million
yy Per capita annual incomePer capita annual income
Rural Rs.9481Rural Rs.9481
Urban Rs.19407Urban Rs.19407
yy Rural incomes CAGR was 10.95% compared to 10.74% in urban betweenRural incomes CAGR was 10.95% compared to 10.74% in urban between19701970--71 and 199371 and 1993--9494
source: ETIGsource: ETIG
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INFRASTRUCTUREINFRASTRUCTURE
IMPROV
INGIMPROV
ING In 50 years only 40% villages connected by road,In 50 years only 40% villages connected by road,
in next 10 years another 30%.in next 10 years another 30%.
More than 90 % villages electrified, though onlyMore than 90 % villages electrified, though only44% rural homes have electric connections.44% rural homes have electric connections.
Rural telephone density has gone up by 300% inRural telephone density has gone up by 300% inthe last 10 years, every 1000+ pop is connected bythe last 10 years, every 1000+ pop is connected bySTD.STD.
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IMPRESSIVE FACTS ABOUTIMPRESSIVE FACTS ABOUT
RURAL MARKETRURAL MARKETyy LIC sold 55% of its policies to rural marketLIC sold 55% of its policies to rural market
yy Of two million BSNL mobile connections, 50% inOf two million BSNL mobile connections, 50% insmall towns/villages.small towns/villages.
yy Of the sixOf the six lakhlakh villages, 5.22villages, 5.22 lakhlakh have a Villagehave a VillagePublic Telephone (VPT)Public Telephone (VPT)
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yy 41 Million41 Million kisankisan credit cardscredit cards
yyOf 20 millionOf 20 million rediffmailrediffmail signsign--ups 60% from ruralups 60% from rural indiaindia
yy 42 million avail banking services42 million avail banking services
yy Investment in formal saving instrumentsInvestment in formal saving instruments
It is already showing signs of growthIt is already showing signs of growth
Contd ..
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CHALLENGESCHALLENGES
yy DISTRIBUTIONDISTRIBUTION
yy COMMUNICATIONCOMMUNICATION
yy UNDERSTANDING THE RURAL CONSUMERUNDERSTANDING THE RURAL CONSUMER
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Economic CrisisEconomic Crisis
Recession
Impact on India
Strategies adoptedto escape the
negative impact ofrecession
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Economic CrisisEconomic Crisis
yy Many experts think that it is mirage of prosperityMany experts think that it is mirage of prosperity
yy Prosperity is restricted to only the places where money isProsperity is restricted to only the places where money is
concentratedconcentrated
yy Lack of basic and adequate infrastructureLack of basic and adequate infrastructure
yy Age old vicious poverty cycleAge old vicious poverty cycle
yy Limited livelihood opportunitiesLimited livelihood opportunities
yy AgricultureAgriculture stagnation and high dependence on monsoons.stagnation and high dependence on monsoons.
yy There has been stagnation in the level of public investment inThere has been stagnation in the level of public investment inrural infrastructure in Indiarural infrastructure in India
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Role during economic crisisRole during economic crisis
yy Study commissioned by RMAI and done by MARTStudy commissioned by RMAI and done by MART
yyThe rural consumer market grew by 25% evenThe rural consumer market grew by 25% evenduring recessionduring recession
yy Many corporates tried to enter into the ruralMany corporates tried to enter into the ruralmarkets to shield against recessionmarkets to shield against recession
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INNOVATIVE STRATEGIESINNOVATIVE STRATEGIES
USED BY COMPANIESUSED BY COMPANIESMARUTI SUZUKIS GHARGHAR MEIN MARUTI
HERO HONDA HAR GAONHAR AANGAN
BHARTI AIRTEL
TATA TEA
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VIDEOVIDEO
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WAYS TO BOOST THEWAYS TO BOOST THE
ECONOMY THROUGH RURALECONOMY THROUGH RURALMARKETMARKET
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UnderstandingUnderstanding TThe Consumerhe Consumer
BUYS PRODUCTSMORE OFTEN
BUYS SMALLPACKS
HETEROGENOUSPRODUCTS
DISTRIBUTIONAND PRICING
ARE KEY
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yy VALUE FOR MONEY, NOT CHEAP PRODUCTSVALUE FOR MONEY, NOT CHEAP PRODUCTS
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MAKING EFFECTIVE USE OF LARGEMAKING EFFECTIVE USE OF LARGE
INFRASTUCTUREINFRASTUCTURE
Post officesPost offices 1,38,0001,38,000
HaatsHaats (periodic markets)(periodic markets) 42,00042,000
MelasMelas (exhibitions)(exhibitions) 25,00025,000 MandisMandis ((agriagri markets)markets) 7,0007,000
Public distribution shopsPublic distribution shops 3,80,0003,80,000
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Using IT to Transform MarketsUsing IT to Transform Markets
ITCs eITCs e--choupal and other IT initiatives (EID parry,choupal and other IT initiatives (EID parry,
Amul dairy information system kiosk)Amul dairy information system kiosk)
STD revolution/ mobile connectivitySTD revolution/ mobile connectivity
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Strategies already undertakenStrategies already undertaken
Integrated Rural Development Program (IRBD)
Wage Employment Programs
Employment Assurance Scheme (EAS
Food for Work Program
Rural Housing
Social Security Programs
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Futurestrategies
Multi agencyapproach
Peopleparticipation in
decisionmaking
Capacitybuilding
Farmingresearch system
Priority tolocation andeconomic
viabletechnology
Promote privatesector
participation
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RURAL DEVELOPMENTRURAL DEVELOPMENTCAN BE COINED IN 20CAN BE COINED IN 20
POINTSPOINTSyy II--Increase in irrigation potentialIncrease in irrigation potential
yy PP--Pulses oilseeds developmentPulses oilseeds development
yy RR--Rural developmentRural development
yy OO--Observe equitable distribution of landsObserve equitable distribution of lands
yy MM--Minimum wage paymentMinimum wage payment
yy II--Independence to bondedIndependence to bonded labourlabour
yy SS--Scheduled castes welfareScheduled castes welfare
yy
EE--Essential water supplyEssential water supply
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yy RR--Rural housingRural housing
yy UU--Urban housingUrban housing
yy RR--Rural electrificationRural electrification
yy AA--AfforestationAfforestation
yy LL--Lever for family welfareLever for family welfare
yy WW--Wealth through healthWealth through health
yy EE--Eradicating malnutritionEradicating malnutrition
yy LL--Literacy promotionLiteracy promotion
yy FF--Fair price shopsFair price shops
yy AA--Accelerate rural industrial growthAccelerate rural industrial growth
yy RR--Restrain antiRestrain anti--social elementssocial elements
yy EE--Efficiency in rural sectorEfficiency in rural sector
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CONCLUSIONCONCLUSION
yy Although rural India provides plenty of scope forAlthough rural India provides plenty of scope forcautious optimism, a more realistic perception ofcautious optimism, a more realistic perception of
rural India will emerge over time as corporates andrural India will emerge over time as corporates andgovernment realize that rural India will not givegovernment realize that rural India will not givethem rapid earnings growth, but a more resilientthem rapid earnings growth, but a more resilientearnings profile across the business cycle.earnings profile across the business cycle.
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