As retailers compete for the urban customers, many are looking at the rural markets with hope. They are seeing the emerging rural economy as a promising space to grow and expand.
In the last decade only, companies like Dabur and Hindustan Unilever have recognized this opportunity and have successfully penetrated the rural retail markets. Dabur, being one of the largest retail brands, has seen a massive success. It stepped in with a goal to serve 30000 villages in 18 months. By the time those months ended, it didn’t only met its goal, but also exceeded it.
Seeing the success, other retail brands jumped in for similar success giving birth to a new trend. About a decade has passed by but a big part of rural demand is still untapped. The rural economy is yet to reach its full potential and offers a significant opportunity for retail brands. Three core reasons make rural India such a fertile market:
1. Growth of Internet users
As per a survey report by the Internet and Mobile Association of India (IAMAI), rural internet users in India are growing three times faster than urban users.
These ever-increasing users are a promising market for rural e-commerce stores. The market is still developing and is largely untapped.
Additionally, the increasing exposure to new cultures, lifestyles, and products is increasing the demand for new products among the rural population.
2. Increasing Influence of Unified Payment Interface (UPI)
Another thing that has given rise to rural consumption is UPI. In the last year alone, UPI facilitated around 46 billion transactions.
This revolutionary mode of transaction has solved the shortcomings of cash and net banking. It made both buying and selling more straightforward.
Today, the Kirana stores in even the remote villages in India accept UPI and are willing to transact with it. This ease has boosted the consumption habits among the rural population.
3. Rising Household Income
The income of rural households has increased dramatically since the start of the century. The Human Development Survey of 2004-05 and 2011-12 showed an increase of 177% in the incomes of rural households.
The trend has continued, and rural regions have seen a lot of economic development in recent years. As a result, rural consumers now demand the same quality products in the cities.
They want them in their nearest stores and markets. This income surge has created entirely new markets for retail brands to sell their products.
4. Infrastructural Development
The improvement of infrastructure has played a significant role in boosting the rural economy. The villages are now connected with well-maintained roads; electricity is more reliable, and stable internet is available everywhere.
These developments have made business easier in rural markets. It is now easier for brands to enter rural markets and win their market share.
With little tech and expertise, any brand can penetrate this emerging market. Solutions like Sales Force Automation allow a brand to successfully sell, track and optimize its distribution in even the remotest places.
SFA gives brands the power to explore new markets by effectively managing their field teams and instant insights on orders, leads and fulfillment.
To learn more about such solutions, check out Growmax’s SFA solutions and blogs.
