Consumer products in village bazaar


Rural India seems to be under a spell of consumerism. Villages of eastern and southern states are shaking off the tag of low spenders to lap up the offerings of India’s second wave of industrialization.

Throwing light on the new consumerist surge, especially in rural India, a Research report has high-lighted well-off states like Punjab, Kerala, Maharashtra and Gujarat have seen rates falling in the last five years.

In its report Indian Market Guide, it notes that the penetration of packaged edible oils in the year 2000-05 has actually declined in the western rural zone, from 17% to 13.9%. Overall there has been a 5% increase in the penetration of packaged edible oils, which indicates how preferences in rural India are tilting from loose to branded and packaged oils.

With marketers looking at new concepts for better distribution strategies, the report has attempted to highlight the evolving face of rural India. In soft drinks, penetration has declined from 10.2% to 8.4% in western parts of rural India, while its northern counterpart leads with a 68% increase in soft drink consumers.

Skin and face creams, a regular feature in most rural households, have shown a decline, especially in the northern zone of rural India. From 19.6% to 18.5% skin and face creams have slumped during the period. However, in this segment, the eastern zone has increased its lead over the other three zones. Orissa shows a notable increase in user base from 14% to 25% as also Assam 32% to 39% and Goa 22% to 27%.

Overall rural penetration clearly shows a growing level of consumerism. The report says shampoos, for instance, have seen an astounding growth rate from 13% to 31.9% compared to other categories of personal products. These figures suggest that almost a third of India’s rural population uses shampoo.

While north and west zones have shown a three times growth in penetration, the southern and eastern zones have doubled their consumption. In states like Tamil Nadu, and Andhra Pradesh, nearly half the rural population is using shampoo. The penetration of this segment is growing over three times in states like Orissa, Madhya Pradesh and Gujarat.

Marketers have noticed the potential of rural India, like it had for urban India. It’s an obvious thing to happen. There is purchasing power in smaller towns and interiors. Moreover, firms are pricing products to make them affordable.

Incidentally, though the penetration level of consumer durables like color televisions, refrigerators, motorcycles, tractors and bicycles, are low in rural India the growth is exciting.

Color TVs have shown a 200% increase in penetration over the last five years, motorcycles by 77% and refrigerators by 31%. This comes on an estimated population increase of 10% during the period, it notes.

The rural markets are clearly driven by certain product categories like direct cool refrigerators, semi automatic washing machines and basic TV (non-flat). Rural India has got powers of intensive desire to move on to the next big thing in the market and that is where the marketers derive most of their business.

The south and west which take a special interest in premium products now look at consumer durables as a mere commodity.

All rural zones have shown higher penetration levels in television. In sharp contrast to the doubling of refrigerators in Goa, HP, Maharashtra, Rajasthan and Orissa states like UP, AP, Assam, Karnatak, West Bengal, MP and Bihar continue to show low ownership, with penetrating levels at as abysmally low 1%.

We end this article by the conclusion clever pricing strategies, far lower cost in rural India, whether it is soaps or motorcycles are pushing marketing. It is a question of making products right for a particular segment and a matter of pushing the brand to places that it has never been before. The only way it works in the rural market is if products filter from the urban sector. It has to be seen as a desirable commodity and marketers have realized that they can’t start with a new product in the rural market.