The Smart push to Rural Growth

Rural India is witnessing a transformation. The rural consumers are at par with their urban counterparts when it comes to aspirations. However, marketers need to approach the rural market in different and innovative way to keep their cash registers ringing loudly. Prof CK Sabharwal writesrn
The Smart push to Rural Growth

In the seventies driving from Hissar in Haryana to Bhatinda in Punjab, you would have observed few cars on the road, mostly trucks, some jeeps; bullock carts in every field, spotted occasionally with tractors; mud houses without toilets; small fragmented and heterogeneous markets; unbranded merchandise, many spurious and duplicate products such as Lifeboy; unhygienic eateries ‘dhabas’ and unclean tea stalls. Head covered women were rarely sighted in markets.

However, in the eighties and nineties, broader metal-led roads; many more cars – Maruti 800 and Ambassadors; many brick and cement houses; the emergence of National and International brands of FMCG, tractors, two-wheelers and cars, agro-chemicals and nutrients, apparel and shoes, food and beverages – spread across organised agricultural markets in mandis, that transacted cotton and paddy in Kharif, and wheat and oilseeds in Rabi seasons, indeed as they still do. Many more two-wheelers and transport were visible on the roads and in markets, road blocked by colorfully painted tractor trolleys! In Gujarat, Punjab, AP and Karnataka, as in other progressive States, one saw many young boys and girls in the market, going to newly established schools and colleges. TV antennas stuck out making the presence of black and white and small color TV’s felt. Deluxe air conditioned bus between Delhi and Hissar, and to other rural headquarters, were a huge novelty for people to travel in relative comfort.

Pizzas, hamburgers, fast food outlets were yet to enter rural India. But cable TV was everywhere, beaming Bollywood and Tollywood to overjoyed and excited rural households, even as the brands were quick to take advantage of this new medium of communication. One still had to go to an STD/ISD booth to call. Landlines connected to “Beetle” and similar colorful telephones that rarely worked, but the rural simpleton was ready to wait to make a call. Durables such as refrigerators, washing machines mixer grinders were a huge pull. As were Phillips radios, audio cassette players, VCD players, Beltek and Texla TVs, tube lights from Crompton and other electronic goods were greatly traded.

Western toilets, ceramic tiles, and furniture, at this time, made slow but sure entry into rural households. Lubricants (ELF, Mobil, Servo) from oil companies, fertiliser agencies mushrooming pesticide and seed dealers, tractor agencies and farm equipment outlets – all made the farmers very much engaged and their lives more prosperous, through sale and use of agro-inputs and farm machinery. Ready made garments from Liberty, Wings, Raymond and the like adorned shelves while Bata saw many competitive brands setting shops in rural markets. Britannia’s Tiger and Parle G happily satisfied customers sipping milky hot tea at shanties in North India and milky luke warm coffee in South India.

Internet penetration
Mobile phones and the Internet entered the 21st century – and the world got quietly mad – as did India and much of the hinterland. Today India’s mobile subscriber base stands at 961 million; Internet subscribers are 243 million; smartphone users are 160 million, and mobile web users are 159 million – and climbing! (Source IAMAI : TRACXN : TRAI). These cater to 1.3 billion Indian population of which 64 percent are within 15-35 years of age! And half of them are in rural India, and half of these are women! This Indian demographic is the driver of adoption of new technologies, across many sectors – agriculture, health, education, travel, auto, entertainment, banking & insurance, telecom & mobile communications, backed by service providers – a technological revolution is happening in rural India! And the back camera is giving way to ‘selfies’, sure enough.

In villages of AP, the farmers can access free, internet driven electronic information kiosks, run by Coromandel Group and obtain farm and crop related information, advice and products. Many other players have similar net backed, mobile enabled extension services. Farmer captures photo of pest on crop, sends to extension center and gets a solution within a few minutes – all while he sips buttermilk, with his family! Vodafone is hoping its mobile technology will improve agriculture productivity by delivering real time information to farmers. They have identified many related services through Smartphone and intend to cover 70 million farmers by 2020. Companies now use mobile phones to have video conference interface with sales teams, offer their channel partners real time solutions to bottlenecks, view demonstrations and field promotions as they happen and actively participate in events at, villages in Chhattisgarh, while sitting in their AC cabins in Mumbai. “Sahej” does thousands of transactions through the Internet for villagers; many NGO’s and SHG’s have joined the effort to help improve the quality life of rural folk. And the results are visible!

Indeed, digital virtual multi media education to rural women and men has already achieved milestones in national skill building. Rural BPO’s are assisting Insurance Companies and undertaking medical transcriptions. The public and private sector are both pitching to push financial inclusion initiatives. The government is trying to route subsidies through Jan Dhan accounts; two schemes ‘Pradhan Mantri Jeevan Jyoti Bima Yojana’ and ‘Pradhan Mantri Suraksha Bima Yojana’ – serve the broader purpose of social security. Banks will leverage these accounts to provide a large range of financial services. Micro ATM’s are likely to be made available to villages, where banks do not reach and given broadband connectivity, cash in cash out models, will help penetrate the rural pyramid significantly.

E-commerce push
Between 2010 and 2012, rural spending was Rs 3.75 lakh crore, as per National Sample Survey Organization – nearly 20 percent higher than urban areas. With spreading Internet, can e-commerce be far behind? Amazon has tied up with India Post to service 19,000 pin codes. Flipkart is beefing up its staff in small towns and trying to leverage channel partners for last mile connectivity. It wants to add one lakh sellers by 2020, connected to e-commerce, in small towns. These B2B channel partners will scale up their cataloging and packaging business to support sellers in villages and talukas. In Tumkur, Karnataka, Amazon has reduced delivery time from weeks to three days, based on a pilot project. A courier villager can deliver 12 packages in a few hours in rural village. Smartphone deliveries from Flipkart and Amazon beyond metros are on a multiplier rise. iPad toting salesmen, are bringing the retail stores to rural homes. Purchases are clicked – cash is collected – credit card of salesman is used to pay for purchase – and the product reaches the household within 10 days! Imagine, cash before delivery. Eureka indeed!

Mahindra is offering a host of mobility solutions too. The idea is to forge an understanding by leveraging technology by putting touch screen kiosks at tractor outlets. Here automotive products, prices and models are detailed, doing away with the need to park the products physically at the outlets. Mahindra Finance, across 600 branches, facilitates such contacts. The company drives its messages through 350 “gramveers”, sales consultants carrying 8,000 tablets and visiting villages, displaying products, information and availability. Indeed, technology is expanding rural reach at a pace faster than ever before and the advent of 4G and 5G services are “sone pe suhaga”!

Because of tele-communication spread and increasing mobile subscriber base, product management for rural India is seeing innovations galore. Brands are fine tuning products, making appropriate line extensions, crafting no frills models for autos and durables and branding them across the communication platforms through the net on smartphones. Thus education, information and awareness lies verily in the palm of the consumer’s hand. Communication strategies are changing as companies engage with rural consumers in regional languages forge opinions and persuade influencers to push buying brands. Eicher is introducing a pickup small vehicle, that can carry 500 kgs, and that can run pump sets or provide electricity for few hours, in addition to being a convenient farming vehicle. Umbrellas with Bluetooth devices, at Rs 2,000, are being readied for launch. Solar rickshaws, electric solar lanterns and cookers, power through solar devices for rural households in the villages, ‘Chotukool’ (Godrej) refrigerators – are innovative solutions for power starved rural India. Disruption is the new avatar! Marketing is being redefined in rural India!

GM crops, now again cleared for trials by the government, will, when permitted for commercial use, increase farm yields and make available more crop produce to the country, where food security is a priority. Sugar and Ethanol from Beetroots; new hybrid seeds; appropriate mechanisation, advanced crop management and protection technologies – will combine to increase farm and non-farm incomes – thus making more disposal funds available for spending. Thus technology will help increase share of agriculture sector in India’s GDP.

Food and beverages define the tapestry of rural markets. Every second shanty in small towns and big villages has Coke and Pepsi, and host of other soft beverages and bottled mineral water that caters to young and old taste, alike. Add to this, the trend toward developing rural tourism displaying village life. Thus, the cash registers are ringing loudly and across the country! Albeit intermittently, sometimes, because of the depressive monsoon clouds that roar but do not rain!

Author: Prof CK Sabharwal, MD, Crop Health Products

The Changing Face of Rural India