Rural Indian Customer - Ten Myths
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Rural Indian Customer - Ten Myths

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A presentation on some keys aspects of the Rural Indian Consumer based on experiences in the Nemmadi Project

A presentation on some keys aspects of the Rural Indian Consumer based on experiences in the Nemmadi Project

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Rural Indian Customer - Ten Myths Presentation Transcript

  • 1. The Rural Indian Customer A Presentation to the Chief Consumer Officers Forum 5 June 2009 Ten Myths Ravi Rangan, Comat
  • 2. Rural India
    • 70% Indians by population live in 638,387 villages
    • 87% of villages have a population of < 2,000
    • 35% of villages lie beyond standard access
    • Number of “middle income and above” in rural areas favorably compares with urban India
    • Markets exist in every cluster of villages
      • 3.6 Million retail outlets
      • Served by traditional Kirana shops and Mandis
      • Products supplied from nearby semi-urban areas
    06/10/09 Ravi Rangan, Comat
  • 3. The Rural Business Center (RBC)
    • Initiative by Comat to deliver services in Rural India
    • 1,000 Operational Centers located in Large Villages
    • Consists of
      • Two Computers and Peripherals
      • VSAT Connectivity
      • 3-4 Hours Power Backup
    • Over 50 Services delivered:
      • Government Certificates
      • Education
      • Insurance
      • Railway Tickets…
    06/10/09 Ravi Rangan, Comat
  • 4. Evolution of the RBC
    • Comat has delivered e-governance solutions to several governments
    • Successful implementation resulted in centralization of services
      • Citizen received better and transparent services, but had to travel to the Taluk
      • Cost of Infrastructure and Connectivity prevented service delivery points closer to citizen
      • Government service delivery alone did not create financial viability
    • Comat decided to setup a “super market” for services that would deliver government and other services
    06/10/09 Ravi Rangan, Comat
  • 5. RBC Achievements
    • 100,000 footfalls and 50,000 customer served daily
      • 200,000 transactions sustained across 15 days
      • Over 15 Million paid transactions since Oct 06
    • 30%* of covered families visit their RBCs annually
    • Recognition and Awards
      • Microsoft e-Governance Award 2007
      • National Silver Award for e-Governance 2007
      • NASSCOM Innovation Award 2007
      • Legatum FORTUNE Technology Prize in 2008 (Shared the $1Mn prize)
    06/10/09 Ravi Rangan, Comat
  • 6. The Ten Myths Anecdotal Experience during RBC Implementation
  • 7. The Ten Myths
    • Poor Infrastructure Prevents Quality Product Delivery
    • Addressing Market Requires Reaching All Villages
    • Franchising is Only Option
    • Cannot Manage Rural Employees
    • Rural customer unwilling to pay for premium services
    • Rural Customers are Demanding
    • Rural customer is not sophisticated
    • They will buy – awareness is all that is required
    • Packaging in small size is the only customization that is required
    • Business Opportunities are Limited
    06/10/09 Ravi Rangan, Comat
  • 8. Poor Infrastructure Prevents Quality Product Delivery
    • The Myth
      • Uneconomical Last Mile Logistics creates barriers for coventional distribution models
      • Infrastructure and Power makes technology enablement difficult
    • Reality
      • Comat uses inexpensive off the shelf infrastructure to create delivery channel
      • Community is willing to offset costs in many situations
      • VSAT bridges digital divide and enable high-quality services delivery
    06/10/09 Ravi Rangan, Comat
  • 9. Addressing Market Requires Reaching All Villages
    • Myth
      • Reaching all villages is essential
    • Reality
      • Citizens prefer visiting larger villages for their multiple needs and their Masala Dosa
      • Their purchase is driven by Habit and not by Choice
      • Creating a distribution point for 5-10 villages at carefully chosen locations will cover 90% of population*
      • Distribution point for 25-30 villages will reach 70% of population*
    06/10/09 Ravi Rangan, Comat
  • 10. Franchising in the Only Option
    • Myth
      • Franchising is only option that works
      • Cannot align remote staff with corporate culture
    • Reality
      • Owned and Employee Operated Models can also be successful
      • Careful selection and training of remote staff creates a loyal and efficient workforce
      • Allows flexibility to experiment and innovate
    06/10/09 Ravi Rangan, Comat
  • 11. Cannot Manage Rural Employees
    • Myth
      • Cannot manage employees across thousands of remote locations
    • Reality
      • Biometrics Fingerprint ensures attendance and transaction security
      • Technology enabled controls and inherent loyalty, dearth of choices makes it easier to manage rural employees
    06/10/09 Ravi Rangan, Comat
  • 12. Rural customer unwilling to pay for premium services
    • Myth
      • Rural customer is unwilling to pay for premium products and services
    • Reality
      • Rural customers will choose premium services if they are available and deliver value
      • Citizens many times “TIP” Rs. 50 & Rs. 100 (keep the change) for a service worth Rs. 15
      • These are land records, income and other certificates that are served across the counter
    06/10/09 Ravi Rangan, Comat
  • 13. Rural Customers are Demanding
    • Myth
      • Rural customers are demanding and Impatient
      • They are quality conscious and unforgiving
    • Reality
      • Absence of Choice, Sub-standard products and Cheap clones have reduced quality expectations
      • Citizens are patient and do not mind waiting their turn (do not value their time as much)
      • Much more forgiving product and delivery errors
    06/10/09 Ravi Rangan, Comat
  • 14. Rural Delivery Chain is not Sophisticated
    • Myth
      • The Rural Delivery Chain is not Sophisticated
    • Reality
      • The Delivery Chain and Citizens are actually Sophisticated and Enjoy in Exploiting Opportunities
      • A special pre-paid mobile package was released by a Telco for a mass campaign run from RBCs
        • Packaged with Ration Card Issue and Cheaper to the retail package by 50%
        • Great Sales - Distribution channel hoarded the packages and resold it for profit
    06/10/09 Ravi Rangan, Comat
  • 15. They will buy – awareness is all that is required
    • Myth
      • Creating awareness drives product sales
      • Brand ambassadors are very effective
    • Reality
      • Product usefulness and availability is important and serviceability is critical
      • Huge Influence of Peer Groups and Herd Mentality
      • Less Impulsive buying
    06/10/09 Ravi Rangan, Comat
  • 16. Packaging in small size is the only customization required
    • Myth
      • Smaller size packaging is only product customization required
    • Reality
      • Products have to address one or more areas below to succeed
        • Cater to an “Immediate need”
        • Address an unmet demand for “quality of life improvement”
        • Transparency and Honesty in product information
        • Financing in case of capital investments
    06/10/09 Ravi Rangan, Comat
  • 17. Business Opportunities are Limited
    • Myth
      • Business opportunities including cross-selling are limited
    • Reality
      • Several business opportunities exist, one has to look
      • A Rural BPO employing 100 local graduates processing US Cheque is operating effectively
      • Lower costs by using fixed infrastructure at night and appreciation of the community
    06/10/09 Ravi Rangan, Comat
  • 18. Thank You
    • Rural communities will support quality products and services
    • Understanding the rural consumer and making relevant products/services available will improve rural lives
    06/10/09 Ravi Rangan, Comat