Any marketer worth his salt knows that in the wild blue yonder of rural India lies a huge market for many products and brands. He will know that it accounts for over 50 per cent of the goods consumed in the country. For two-wheelers, colour TVs and fridges rural areas account for 30 per cent or more of the market.
However, that’s at a broad, macro level; an acknowledgement of a vast market’s existence. But how does one plan to service this market; what do marketers base their planning on. There are many questions: how many rural retail outlets are there? What are the kinds of products they sell? How do these vary across the states? What is their size in terms of space and turnover? Are the numbers of rural outlets growing rapidly? At what rate are they growing?
And, to add to that: What proportion of rural households patronise these shops for their different requirements? How does this vary across different product categories? Why do the rural folk prefer to shop at outlets in the village or in the towns or cities for different products (retail habits)? How do the number of outlets in the village vary depending on the size of the village, its distance from the closest city, its distance from the highway? How do the retailing habits of those in villages of different kinds and those from different states vary?
A new study, completed over four months in May this year, on stores and retail habits in rural India by the Rural Marketing Agencies Association of India (RMAAI), co-sponsored and conducted by Francis Kanoi Marketing Research answers these questions. Says Francis Xavier, Managing Director, Francis Kanoi, “The study quantifies the rural markets.” As he says, perceptions are one thing, but the study throws up hard numbers on, say, the population of a village and the number of retail outlets in them, or the number of retail outlets in villages at different distances from a city with a one lakh population or a highway.
The study sought to estimate the number of retail outlets in rural India by listing them in 609 villages of different sizes across the 67 socio-cultural zones in the country. The 203 districts covered by the study amounts to almost a third of all the districts in the country.
Simultaneously, 6,105 households were covered in these villages, from different socio-economic segments to ascertain their retail habits, pertaining to everything from cigarettes, soft drinks, soaps and shampoos to pressure cookers, colour television sets, construction material and agri-inputs.
As R.V. Rajan, President of RMAAI and Chairman of Anugrah Madison Advertising, points out, this study provides a quantitative basis to plan a retailing strategy covering 70 per cent of the country. Should marketers consciously extend their distribution to villages? Or should they strengthen the distribution in the towns to cater to the rural markets? Or should they do both? If they are extending their distribution to rural markets, up to what size of the villages should they cover? How many outlets would they need to cover? Given their size and turnover, what should be the frequency of their coverage of villages? These and a host of other questions for effectively covering the rural markets in India will find decision-making inputs in this study report. As Xavier says, a marketer planning to launch a durable in a particular region will know exactly how many outlets he can seed his product in and over how many villages as the study reveals how many such outlets would be there in a particular village/region which deal in such products. However, the scope of this study does not cover individual brands but only categories.
Methodology: The socio-cultural zones across the country represent distinct regions of relevance in the context of rural India. The study takes into account 67 such zones and covered three districts from each of these zones, which represents a coverage of nearly a third of rural India. In each district villages were covered in this manner: population greater than 5,000, population of 2,001 to 4,999 and of up to 2,000. In each village, researchers were tasked with a census of all retail outlets and a study among ten households from different economic strata to investigate their retail habits.
A quick glance at the main findings of the study throws up some interesting nuggets which marketers can mull over:
* There does not seem to be a direct relationship between the percentage of population that is rural and the number of rural retail outlets per thousand population. As the map published alongside of the dispersion of rural retail outlets shows, Bihar, which is 90 per cent rural has only four outlets per thousand population whereas in Himachal Pradesh, which is also 90 per cent rural, there are 9.1 outlets per thousand population. As Xavier says, he was so surprised with the findings that he had to review the data again.
* It’s not food or grocery items but the most widely stocked products in rural retail outlets are beedis, cigarettes and matches which 64 per cent of outlets stock. However, as an overall product category, the most widely stocked are foods which include branded packaged biscuits, tea leaves, confectionery, ready-to-eat snacks and chocolates.
* And, this should gladden the hearts of durable makers: While durables and kitchen appliances have a very small percentage of shops stocking them in rural areas, however, in terms of sheer numbers, they are very large. For example, pressure cookers have 42,000 outlets in rural areas as against some 65,000 outlets in urban areas, fans have 52,000 outlets against 1.3 lakh urban outlets.
* The hierarchy of top five product categories purchased stack up like this: Tobacco products, food articles, groceries, cosmetics and toiletries and fruits and vegetables.
The study, conducted by over 100 researchers across the country, is available for Rs 25,000. The RMAAI can be contacted through mail: connect@rmaai.org.
However, that’s at a broad, macro level; an acknowledgement of a vast market’s existence. But how does one plan to service this market; what do marketers base their planning on. There are many questions: how many rural retail outlets are there? What are the kinds of products they sell? How do these vary across the states? What is their size in terms of space and turnover? Are the numbers of rural outlets growing rapidly? At what rate are they growing?
And, to add to that: What proportion of rural households patronise these shops for their different requirements? How does this vary across different product categories? Why do the rural folk prefer to shop at outlets in the village or in the towns or cities for different products (retail habits)? How do the number of outlets in the village vary depending on the size of the village, its distance from the closest city, its distance from the highway? How do the retailing habits of those in villages of different kinds and those from different states vary?
A new study, completed over four months in May this year, on stores and retail habits in rural India by the Rural Marketing Agencies Association of India (RMAAI), co-sponsored and conducted by Francis Kanoi Marketing Research answers these questions. Says Francis Xavier, Managing Director, Francis Kanoi, “The study quantifies the rural markets.” As he says, perceptions are one thing, but the study throws up hard numbers on, say, the population of a village and the number of retail outlets in them, or the number of retail outlets in villages at different distances from a city with a one lakh population or a highway.
The study sought to estimate the number of retail outlets in rural India by listing them in 609 villages of different sizes across the 67 socio-cultural zones in the country. The 203 districts covered by the study amounts to almost a third of all the districts in the country.
Simultaneously, 6,105 households were covered in these villages, from different socio-economic segments to ascertain their retail habits, pertaining to everything from cigarettes, soft drinks, soaps and shampoos to pressure cookers, colour television sets, construction material and agri-inputs.
As R.V. Rajan, President of RMAAI and Chairman of Anugrah Madison Advertising, points out, this study provides a quantitative basis to plan a retailing strategy covering 70 per cent of the country. Should marketers consciously extend their distribution to villages? Or should they strengthen the distribution in the towns to cater to the rural markets? Or should they do both? If they are extending their distribution to rural markets, up to what size of the villages should they cover? How many outlets would they need to cover? Given their size and turnover, what should be the frequency of their coverage of villages? These and a host of other questions for effectively covering the rural markets in India will find decision-making inputs in this study report. As Xavier says, a marketer planning to launch a durable in a particular region will know exactly how many outlets he can seed his product in and over how many villages as the study reveals how many such outlets would be there in a particular village/region which deal in such products. However, the scope of this study does not cover individual brands but only categories.
Methodology: The socio-cultural zones across the country represent distinct regions of relevance in the context of rural India. The study takes into account 67 such zones and covered three districts from each of these zones, which represents a coverage of nearly a third of rural India. In each district villages were covered in this manner: population greater than 5,000, population of 2,001 to 4,999 and of up to 2,000. In each village, researchers were tasked with a census of all retail outlets and a study among ten households from different economic strata to investigate their retail habits.
A quick glance at the main findings of the study throws up some interesting nuggets which marketers can mull over:
* There does not seem to be a direct relationship between the percentage of population that is rural and the number of rural retail outlets per thousand population. As the map published alongside of the dispersion of rural retail outlets shows, Bihar, which is 90 per cent rural has only four outlets per thousand population whereas in Himachal Pradesh, which is also 90 per cent rural, there are 9.1 outlets per thousand population. As Xavier says, he was so surprised with the findings that he had to review the data again.
* It’s not food or grocery items but the most widely stocked products in rural retail outlets are beedis, cigarettes and matches which 64 per cent of outlets stock. However, as an overall product category, the most widely stocked are foods which include branded packaged biscuits, tea leaves, confectionery, ready-to-eat snacks and chocolates.
* And, this should gladden the hearts of durable makers: While durables and kitchen appliances have a very small percentage of shops stocking them in rural areas, however, in terms of sheer numbers, they are very large. For example, pressure cookers have 42,000 outlets in rural areas as against some 65,000 outlets in urban areas, fans have 52,000 outlets against 1.3 lakh urban outlets.
* The hierarchy of top five product categories purchased stack up like this: Tobacco products, food articles, groceries, cosmetics and toiletries and fruits and vegetables.
The study, conducted by over 100 researchers across the country, is available for Rs 25,000. The RMAAI can be contacted through mail: connect@rmaai.org.
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