Apr 18, 2010
Rural Retailing -The next captivating sector? By: R. Veena bhargavi 0911-057 PGDM-RM
CONTENTS: Current face of rural retailing
Approach towards rural retailing
Rural retailing: Certainly market-driven¸ technology-based agriculture-India- an economic superpower. The retail revolution is going to act as a catalyst
So the new concept that is hitting the market today is the “Rural Retailing”.
To start with……..
Rural India accounts for over 50 per cent of India’s GDP. Rural retail-Tremendous potential as the rate of disposable income is increasing, growing middle class, advent of IT infrastructure and enormous grouped population. Though sales are expected to be much lower in early stage, but the break even is reached in four-five months of being set up, as against eight-nine months earlier.
What should keep in mind to get success in rural market?
APPROACH TOWARDS RURAL RETAILING Go to the producer directly Set up knowledge exchange centers Earn respect and confidence with locals Provide retail environment with local flavors and needs.
Treat farmers with respect and serve them as customers.
Strengths: About 70% of India's population lives in 627000 villages in rural. Middle and higher income house holds in rural India is expected to grow from 80 million to 111 million by 2010.
In urban India , the same is expected to grow from 46 million to 59 million . Thus the absolute size of rural India is expected to be double to that of urban India.
Prevalence of spurious brands and seasonal demand.
Opportunities: 3 times more families lives in Rural India Rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income. Population-becoming brand conscious
Exposure and increase in literacy rates will open market further.
Threats: Shifting of young generation-rural to urban cities Entry of small time players – Study on buying behavior of rural consumer indicates that the rural retailers influences 35% of purchase occasions
Vast majorities-rural people-tradition bound, fatalistic and believe in old customs, traditions, habits, taboos and practices.
Strategies: 54 fresh horticultural stores. Emphasis- quality and productivity of horticultural products. Increase of rural hyper markets. Provides place for farmers to bypass intermedaries .
To sell their produce directly to the company.
Expansion of hariyali kissan bazaars. Emphasis – focus on distribution and infrastructure network.
Support the requirements of rural supply chains.