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Conference on Rural Telecom Markets by Tele.net

Conference on Rural Telecom Markets by Tele.net

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Mohan Krishnan Mohan Krishnan Presentation Transcript

  • 15 Sept 2009 Mohan Krishnan IMRB International
  • Is this how you imagine rural India?
  • Here is the emerging image of rural India!
  • Flow A. Demographics B. Social structures A B C C. Retail dynamics
  • A B C 1. Rural population is large and untapped but no. will saturate Urban-Rural Split 748 779 772 800 742 700 671 Nos in (millions) 600 499 500 383 400 329 285 300 245 200 100 0 1995 2001 2005 2010 2020 Urban Rural Source: Census 2001 projections
  • A B C 2. Two-fifth of villages account for 4/5th of population Population range No. of villages Population Less than 100 8% 0.3% 100-199 8% 1% 200-499 21% 6% 500-999 24% 14% 1,000-1,999 22% 25% 2,000-4,999 14% 32% 5,000-9,999 2% 13% 10,000 & above 1% 9% Total 593,615 742,490,639 Source: Census 2001
  • A B C 3. Heterogeneous in size & affluence Rural Market size (Rs. Crores) Rural per capita market size (in Rs.) <Rs. 30,000 >Rs. 30-60,000 >Rs. 60, 000 <Rs. 20,000 >Rs. 20-25,000 >Rs. 25,000 Uttar Pradesh, West Uttar Pradesh Bihar West Bengal Bengal, Maharashtra, Bihar >40 mill Madhya Maharashtra Andhra Pradesh Madhya Pradesh Pradesh Andhra Pradesh Rajasthan Rajasthan Rural population size Orissa, Assam Tamil Nadu Jharkhand, Karnataka Gujarat >15-40 Tamil Nadu, Karnataka Orissa Chhattisgarh Chhattisgarh Kerala mill Gujarat, Kerala Assam Punjab, Punjab Haryana Jharkhand Haryana J&K, Uttarakhand HP, J&K, Uttarakhand, Tripura, Tripura, Delhi, Goa Himachal Pradesh Meghalaya Meghalaya, Nagaland Delhi <15 mill Mizoram Nagaland Manipur, Arunachal Goa Manipur Pradesh, Sikkim Sikkim Arunachal Mizoram Pradesh  Some markets are big but not as affluent (Example: UP, Bihar) while some are affluent but not very large (HP, J&K) Source: Indicus Analytics, Economic Survey 2008, IMRB Analysis
  • A B C 4. Heterogeneous in social development too! Rural Market size (Rs. Crores) Rural per capita market size (in Rs.) <Rs. 30,000 >Rs. 30-60,000 >Rs. 60, 000 <Rs. 20,000 >Rs. 20-25,000 >Rs. 25,000 Goa Tripura Himachal Pradesh, Delhi Maharashtra Tamil Nadu Manipur Uttarakhand, Tripura, HP >65% Tamil Nadu Mizoram Uttarakhand Delhi, Goa, Manipur, Rural Literacy levels Kerala Sikkim Sikkim, Mizoram Maharashtra Kerala Punjab Haryana, Punjab, West Bengal Nagaland Haryana 60-65% Chhattisgarh, Gujarat West Bengal Gujarat Nagaland Chhattisgarh Orissa, Jharkhand Andhra Pradesh Orissa, Bihar Uttar Pradesh, Assam, Rajasthan Meghalaya J&K, Meghalaya MP Andhra Pradesh <60% Karnataka Madhya Pradesh Arunachal Pradesh Arunachal Pradesh Jharkhand Assam Rajasthan Uttar Pradesh Karnataka Bihar J&K  Some markets are big and developed but not as affluent (E.g. TN), while some are affluent but not as large or developed socially (E.g. Haryana) and some are large but neither developed nor affluent (E.g. UP) Source: Indicus Analytics, Economic Survey 2008, IMRB Analysis
  • A B C 5. Rural Household Income is on the rise Income @ 1999 prices 100% 1.5 3 2 3.5 6 3 4 8 8 6 H (>Rs.140,000) 12 80% 18 22 29 HM (Rs.105- 35 140,000) 60% M (Rs.70-105,000) 46 40% 65 LM (Rs.35-70,000) 57 20% 44 24 L (<Rs.35,000) 0% 1993 1996 2000 2007 Source: Rural income survey by NCAER
  • A B C 6. Education levels are growing rapidly Annual Population studying 1993 2001 Growth Total rural population (Mill) 628 742 Primary school 72 93 2.8% Junior school 21 31 4.0% Secondary school 11 17 5.6% Graduate college (2005) NA 5 NA Total (In Millions) 104 146 3.8% % Population enrolled 16.6% 19.7% +3%  3% of rural household has one graduate & 16% has at least one Member who has passed SSC & HSC Source: Census 2001
  • A B C 5. Media coverage is growing rapidly 250 2004 2005 200 2006 2007 Population reached 150 2008 (‘000s) 100 50 0 Press TV Satellite Radio Cinema  In 2008, Press reached 29.9%, TV - 43.9%, Satellite – 21%, Radio - 20.1% and Cinema - 6.7% of rural population Source: IRS survey
  • A B C 6. Aggressive efforts by marketers to woo rural consumers Between 2004-06, LG India tripled the number of its retail & distributor outlets in rural areas to 2700 and 1300 respectively HUL’s Shakti Program reached ~ 42000 women entrepreneurs in 1,23,000 villages & Lifebuoy Swastya Chetna reached 140 million people in 40,000 villages between 2002-06 Source: Company reports
  • A B C Result 1: Expenses converging towards urban spend levels Routine expenditure in 2008 Rural Urban Food 55.4% 45.4% Housing 3.8% 5.9% Health 4.7% 4.6% Transport 10.0% 11.1% Education 6.4% 8.7% Clothing 7.1% 6.8% Durables 4.9% 5.0% Others 7.7% 12.5% Total Rs./annum/Household) 33,239 59,131  Routine expenditure of average rural household has been increasing rapidly, % spends converging towards Urban Source: Expenditure Survey by Max-NCAER, 2008
  • A B C Result 2: Growing share of rural markets Products Rural Cigarettes 59% Motorcycles 49% Softdrinks 46% Companies share of rural Rural HUL 50% Colgate 50% LG (for TVs) 60% Source: Company & other website info
  • A B C The rural society… 3 rules of the game 1 Strong social norms 2 Caste barriers, gender barriers still very prevalent… though people are looking at ways to step around them 3 Strongly influenced by opinion leaders & “influencers” - school teachers, medical practitioner (PHC), priests, religious leaders, urbanized relatives, local politicians, the village head
  • A B C The rural family… 3 trends 1 Traditional gender roles in the family still rule… though some gender benders are being 2 IJF – Individualized joint families are sprouting across landscapes – combines the best of both worlds 3 IJF impacting nature of parenting… a carefree parent/ mother. This may be impacting #1 to some extent
  • A B C The rural earning… 3 new trends we see 1 Parallel income… farming not a very reliable option 2 Women contributing to the family income… in parallel work/ farm/ etc., 3 A third earning coming from teenage/ young son or daughter… start earning as soon as they are able to
  • A B C The rural exposure…3 new trends we see 1 NRVs… windows to the world… become instant success stories in the village 2 Cinema/ Bollywood… Shahrukh (no surprises), action heroes like Akshay, Salman, Chiranjeevi… ‘larger than life’ holds cool, not much shades of grey 3 Gadgets entering homes in great numbers…motorcycles, TV, Refrigerators , mixie, mobile “everything will be done with touch of button”
  • A B C The 3 levels of aspirations SENSE OF REFLECTED GLORY “I want my son to join some government Child driven aspirations service” “My son will become someone big” MORE GADGETISED - MORE COMFORT Comfort driven aspirations “Now we have a scooter then will have a Maruti” “Everything will be electronic” RIGHT OF PASSAGE Lifestyle driven aspirations Then children will be married and our daughter-in –law would be running the house”
  • A B C Rural retail outlets Retail outlet growth in Rural India (in 000s) 1993 1996 2001 9800 6633 5364
  • How does retail look…? A B C Shanty Stall – ‘khokas’ Small outlet with 4-5 categories Usually stocks cigarettes/beedi, paan/ tambakho, churan Smaller sachets of washing powder, shampoo, soap, etc. Lot os loose stuff – biscuits, namkeens etc Price point of Rs. 1 or 2 No credit No fixed margin Consumer profile Mostly daily wage laborers, purchases made for the day Mostly men , at times kids
  • How does retail look…? Local kirana store Small to medium size outlet Display - Shop front-view crowded with sachets of different products- shampoos, tea , oil On the shop-floor – dals, masalas, rice, loose oils, atta, biscuits Jars – churans, pan masalas Branded items – are displayed on shelves, for increased visibility (higher shelf – bottles, stand out value; lower shelf - soaps) Consumer profile Credit possibility exists Mix across occupations – At times barter - exchange system everyone Kids and men Rare cases – women
  • How does retail look…? Local Super Store – feeder taluk/town Medium to big size outlet Multiple categories – cereals, dry groceries, vegetables, daily use items Usually stock all items of daily use, vegetables , cereals, pulses, groceries, also a part of the parcel Gives credit but selectively Consumer profile Only men – they travel out/go walking from the village Chemist (both in village/ nearby taluk) Specialized outlet definitely stocking medicines, tonics, Ghunti’s Consumer profile At times- baby oils, Chywanprash Men and children Women - in emergencies
  • Parallel jobs… Harshdeep in Punjab is thinking of studying further He sits in his family shop and is married Ramesh Babu in AP cannot think of going out of the house without his mobile. He doesn’t want his child to work hard like him.
  • Some homes…
  • Youth lifestyle Likes changing colour of hair often Nokia franchise Computer education
  • Women…
  • mohan.krishnan@imrbint.com IMRB International