The untold story of India’s new Rural Super Consumer - The hinterland’s hero is ready to emerge.
Since the mid-1990s, three new opportunities in a liberalized India dominated popular business thinking about India’s prospects. The first announced the great Indian middle class, the strong core of the consuming Indian populace whose change in attitude, unfettered desire to own brands and growing income would spur unprecedented economic growth in an economy that was opening up. The second confirmed the demographic dividend – the percentage of population below the age of 25 which comprised half the nation’s projected population that would cause a future surge in productivity and consumption. And the third heralded the rise of the rural consumer – the vast populace in the rural hinterland that promised to be a bedrock of growing consumption and commercial opportunity.
Nearly a fifth of a century later, the first idea faded away as business burnt its fingers trying to chase the compelling but complicated middle class that was thought of as one monolithic mass but turned out to be a heterogeneous universe of difficult to reach consumers with varying degrees of purchasing power and propensity. However, the other ideas have persisted. India’s demographic dividend continues to drive the business case for creating and delivering products and services and the rural opportunity has retained its allure given the catalytic effect of road and telecom connectivity.
The key learning in how these mega-trends have played out though seems to be that it is no longer sufficient to merely look at the size of an opportunity but the specifics of what drives it. For instance, the middle class opportunity still exists but it requires gleaning which segments are actually addressable and offer a suitable return on business investment.
In similar fashion, while India’s rural opportunity is vast with a population larger than that of China’s rural market, the real opportunity requires a closer look. Two things will determine a sharper and more correct identification of this opportunity. First, the identification of a key segment that can offer a firm and accessible opportunity and second, the convergence of environmental, attitudinal and marketing factors to turn possibility into reality.
The Hinterland Hero Is Born
Both these aspects seem to point to the emergence of a hero from the deep recesses of the rural heartland – India’s rural super consumer. A breed of consumers that are economically and emotionally inclined towards higher-ticket, branded consumption and are not unlike their urban counterpart. Not to be confused with merely the wealthy rural consumer, this subset is a new breed of consumers no longer fettered by a ‘scarcity mentality’ or burdened by memories of a time when rural meant rustic or unsophisticated. In many ways, this has been a consumer who has always existed – sometimes eluding marketing attention and at other times, revealing themselves to carry a blockbuster product or service to salvation. Yet, a few factors have now aligned to help marketers feel the full force of this consumer.
Environmentally, a vast majority today have basic infrastructure and better electrification with 70 percent of villages linked by motorable roads. Similarly, telecommunications connectivity continues to grow at a rapid pace with the Telecom Regulatory Authority of India (TRAI) suggesting that in the last four years alone, the rural subscriber base has expanded seven times and logged faster growth than urban India. Combined with this, rural literacy has risen to ~68 percent, its highest level since independence. This robust foundation is now at an inflection point and continues to be spurred on by government impetus with a continued focus in the latest Union Budget. The more important point though is that government schemes such as NREGA are now being seen by the rural consumer as a reality around them rather than just political promise and is serving to create a confident class of consumers rather than just a populous one.
The rural super consumer is emerging aggressively and has announced his intent by asking for better conditions, brighter prospects and bigger ideals. Two-thirds of rural super consumers are looking for products that either improve their lives or make it easier. A vast majority (70%+) like visiting retail, buying apparel for occasions and are conscious about their health and fitness. A similar proportion is interested in mimicking their urban counterpart in terms of liking a city-like lifestyle and trying new products. As a result health care and hygiene products are witnessing a strong rise and growing penetration across these households.
For more details about the report contact Ritesh Sahu ([email protected])
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