• There are 60 lakh outlets, both in urban
and rural markets.
• 36 lakh retail outlets are spread over six
• The companies need substantial amount
of working capital and large dedicated
Obstacles to reach the rural consumers
• The distribution chain requires a large number of
intermediaries and this increases the cost of distribution.
• Non-availability of dealers.
• Poor viability of retail outlets due to low business volume.
• In adequate banking facilities.
• Only about 80% of the markets are connected by roads.
• Interior village roads.
• Interior village roads get flooded during monsoon.
• Transport and communication facilities are generally poor
• Credit requirement of channel members.
Why to increase distribution channel
in rural area ?
• As per RMAI retail study , the tendency to shop from
the nearby town city is high among consumers
residing within a 25-km periphery, or in villages close
to the highways.
• Whereas 80% of the finished goods are purchased
from the near by towns and cities.
• Therefore, marketers need to ensure product
availability at the right places to generate rural sales.
Branded products in Haats
Company stalls in Melas
Development of Retailers in
Public Distribution System
Agricultural Input Dealers
Post Offices and Bank
The Emergence of Modern Retail In
• ITC’s Choupal-Saagar,
• DSCL Hariyali Kisaan Bazaar
• The rural markets and the consumers are scattered
over a wide geographical area. Considering low
income of consumers, low density of population,
poor condition of roads, it becomes difficult and
uneconomical to individually service all the villages.
The marketers have to follow a selective approach,
based on market potential in developing a network
of distributors and retailers in rural markets.