Indian Rural Market

Presented By : Yash Taneja
INDIAN RURAL MARKET
October 24th , 2023

Introduction
The Indian rural market is an untapped opportunity for businesses, with over 65% of the
population residing in rural areas. Understanding this market's dynamics is crucial for
businesses aiming to expand and tap into its vast consumer base..
Huge Customer Base Diverse Market
your customer count Your annual income this

year
Economic Growth First Mover’s Advantage

the value of your sales advantage over rivals
growth
Key Statistics
• Total market size India’s gross domestic product (GDP) at current
prices was estimated at Rs. 195.86 lakh crore (USD 2.66 trillion) in
2020-21.
• Overall Share Nearly 55% of the population relies on agriculture for

their livelihood and it contributes 17% to the nation's GDP.
906,325,664 908,684,959 909,384,771 908,804,812

2019 2020 2021 2022
Rural Income
Landscape
Income Distribution
According to the latest projections for 2022-
23, there will be about 282 million rural
households in India, out of which 131 million
will have an annual income of Rs. 3.75-7.5
lakh (USD 5-10 thousand), 77 million will
have an annual income of Rs. 1.5-3.75 lakh
(USD 2-5 thousand), and 74 million will have
an annual income of less than Rs. 1.5 lakh
(USD 2 thousand)
Rural Income
Landscape
Income Trends
•According to a study by Azim Premji University, the real
average income growth in rural India was at 4.6% per
annum from 2014-19, which was lower than the urban
average of 5.3% per annum. The study also found that the
income share of the top decile of the rural income
distribution increased by 15%, while the income share of the
bottom decile decreased by 41% during the same period.
This implies that the rural income inequality has worsened
over time.
Untapped Market Potetntial
The rural market in India is a huge and diverse segment that offers many opportunities for
businesses to grow and succeed
Innovation Distribution
Businesses can create new and personalized products Businesses can use existing infrastructure and networks
that meet the specific needs and preferences of rural in rural areas, like roads, railways, and local retailers, to
consumers. For example, durable and affordable solar distribute their products. They can also use innovative
lamps, water purifiers, and mobile phones designed for methods like mobile vans and e-commerce to reach
harsh conditions. rural consumers.
Communication Pricing
Businesses can effectively promote their products to Businesses can offer affordable products and flexible
rural consumers using various media channels and payment options to suit the income patterns of rural
local languages. They can also engage in social consumers.
marketing campaigns to build trust and loyalty.
Understanding Rural CB
Consumer behavior is the study of how people buy, use, and dispose of products and services
Income Education
Rural consumers have lower incomes and prefer They rely more on word-of-mouth for information and
affordable products. They also like to pay in small are more susceptible to fraud. Businesses need to
amounts and in cash or instalments. educate them and protect them from exploitation.
Cultural Factor Infrastructure

Rural consumers are influenced by their culture and They have limited access to basic facilities and
tradition, so businesses should respect and adapt to products, so businesses need to improve infrastructure
their values and beliefs. and reach out to them through innovative distribution
channels.
The Changing Face of Rural
Infrastructure
Roads Electricity Sanitation

1.85 lakh kms of road built in 597,500 villages in India were SANITATION FACILITY HAS
last decade electrified as of the end of INCREASED FROM 48.5 PERCENT
fiscal year 2022 IN 2015-16 TO 70.2 PERCENT IN
2019-21
Thriving Sectors in Rural India
Agriculture contributes 37% of rural GDP in 2019-20. It is undergoing

transformation with innovation and technology adoption, addressing
inefficiencies in the value chain. Start-ups like DeHaat, AgroStar, Ninjacart, and
Agriculture
CropIn are disrupting the sector.
FMCG contributes 15% of rural GDP and is growing at 14.6% CAGR, with
Hindustan Unilever, ITC, Dabur, and Britannia as leading players. Rural
consumers are increasingly brand-conscious. Rural FMCG market to reach Rs.
FMCG
2.4 trillion by 2024.
Thriving Sectors in Rural India
Rural healthcare is a growing sub-sector with a Rs. 1.2 trillion market expected
by 2025. Factors driving growth include rising awareness, income, insurance
coverage, and digital access. Key players include MedCords, mFine, Niramai,
Healthcare
and Gramin Healthcare.
Rural education has high potential. Increasing demand for quality education in
rural areas is projected to grow at 16.5% CAGR and reach Rs. 1.8 trillion by 2025.
Factors driving this growth include literacy rate, aspirations, government
Education
initiatives, and online platforms. Key players are Byju’s, Vedantu, Unacademy,
and Khan Academy.
Challenges in rural
market penetration
Understanding The Seasonal Demand
Consumer
Rural consumers have Demand in rural areas
different needs and depends on the
behaviors than urban agricultural cycle and the
consumers, influenced by monsoon, with irregular
factors like income, income patterns.
literacy, culture, and
tradition.
Challenges in rural
market penetration
Poor Infrastructure Language Barrier
Rural areas lack Language barriers exist,

infrastructure, making it so businesses need to
difficult for businesses to use local languages and
reach consumers.. media channels to
communicate with rural
consumers.
Effective Strategies for
Success
Localization Affordability
This means tailoring products It’s about offering products
to fit the local culture. For that fit rural budgets. Some
example, some companies companies cut costs using
make smaller, more affordable local materials or flexible
packs for rural buyers. Others payment options. Eureka
design products like Godrej’s Forbes sells water purifiers in
ChotuKool, a battery-operated rural areas with a pay-per-use
fridge for places without model, ensuring safe water at
electricity. a nominal fee.
Effective Strategies for
Success
Connectivity Innovation
Getting products to remote Creating awareness in rural areas
areas is crucial. Companies use involves creative methods.
traditional markets or create Companies use mass media like TV
new channels like rural outlets, or radio, non-conventional methods
mobile vans, or e-commerce. like wall paintings, or digital
Hindustan Unilever works with a campaigns. Mahindra & Mahindra’s
network of Shakti Ammas, #SeedTheRise campaign used
women micro-entrepreneurs, to digital media to showcase farming
sell products and educate rural initiatives and support rural
consumers. development
Real-World Success Stories
Amul's dairy products have reached the remotest rural corners of India, transforming the
lives of millions of farmers. Their cooperative model and grassroots approach have been
pivotal in rural development.
HUL has adapted its products and marketing strategies to suit rural consumers. Their
"Shakti Ammas" program, which empowers rural women as sales agents, has been
instrumental in expanding their reach
ITC has ventured into rural markets through its e-Choupal initiative. This innovative
program leverages technology to provide farmers with real-time information and market
access, improving agricultural productivity
1.: Mahindra has gained a strong foothold in the rural market with a range of products, from
tractors and utility vehicles to agri-business solutions. Their close connection with rural life
and needs has contributed to their success.

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Presented By : Yash Taneja

INDIAN RURAL MARKET

October 24th , 2023

Huge Customer Base Diverse Market

your customer count Your annual income this

Economic Growth First Mover’s Advantage

• Overall Share Nearly 55% of the population relies on agriculture for

906,325,664 908,684,959 909,384,771 908,804,812

Cultural Factor Infrastructure

Roads Electricity Sanitation

Agriculture contributes 37% of rural GDP in 2019-20. It is undergoing

Rural areas lack Language barriers exist,

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