The Medley Of Indian Consumers
by Indicus Analytics Private Limited on Aug 29, 2010
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The heterogeneity that characterizes the modern Indian consumer has created a maze that marketeers would like to unravel in order to target their products and services precisely. In this fortnightly se...
The heterogeneity that characterizes the modern Indian consumer has created a maze that marketeers would like to unravel in order to target their products and services precisely. In this fortnightly series, Indicus Analytics will present the various facets of urban consumers, across geographies and socio-economic groups
There are so many facets of the Indian consumer market that it can be sliced and diced in a variety of ways, with each categorization bringing out strikingly distinct features that can make a difference in the way we see the Indian consumer.
To begin with, there is the classic Bharat and India divide of rural markets and urban markets. Of course, there is the big problem of heterogeneity within these two large groups; one could look at variations by region, for instance.
But leaving that issue aside for now, there are at least 600,000 villages and close to 5,000 cities. Do all these really fall into two neat categories—rural and urban? Rural India is much more than the traditional image of small and scattered villages cut off from urban life. In fact, there are 15,000 villages with population in the range of 5,000-10,000, same as 1,000 towns.
Again, this classification of what makes up an urban area comes from the Census done a decade ago, and the character of these villages and towns has changed dramatically since then. Even if we look at the smaller villages, better connectivity, through the road and telecom networks have integrated many of these within the influence of urban markets.
The expanding highways have, in fact, given a tremendous boost to what we can call peri-urban markets, that create a continuum across the land linking villages to bigger cities. Peri-urban markets comprise towns with population less than 100,000. They often line the highways or are adjoining bigger cities or metros and form a distinct, yet vital, component of urban India.
So if we break up the Indian consumer landscape into three parts, we get rural, peri-urban and urban markets, each with its own identity within a district, and each important in its own way.
Clearly, the large cities are more attractive as markets, with higher density of population and expenditure. The metros, of course, lead in all respects as the first point of sale. Yet, if we look at the income distribution at the all-India level, we find small affluent groups making a big impact within rural and peri-urban markets as well.
On the one hand, this reflects the growing incomes in these places, with sale of land for non-agricultural activity (building farm houses for the urban rich is another lucrative option in the countryside outside the cities), farmers in areas close to large cities and metros have much larger purchasing power than before.
On the other hand, rural incomes have also diversified in so many ways in the recent past—from agriculture or eco-tourism to the flagship job guarantee scheme at the lowest level. Rural India is spending more than before. Moreover, with the changing landscape, villagers have better access to peri-urban and urban markets.
The boundaries are blurring at the edges of the rural-urban divide. Looking at the pockets of affluence in peri-urban markets, we find those in Gujarat, Tamil Nadu and Kerala leading here. The smaller urban centres forming the peri-urban markets in the districts of Ahmedabad, Valsad, Coimbatore, Kancheepuram, Vellore and Ernakulam have the highest number of rich households (with annual income of more than `10 lakh) among all peri-urban markets.
Why do these states stand out here? For the simple reason that the high concentration of peri-urban activity is a reflection of the excellent road networks and relatively balanced development across districts, compared with other states. Looking beyond the main urban centres allows a much deeper appreciation of the extent to which markets are growing in India.
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