Untapped Goldmine – Indian Rural Market

Few years back I was given the opportunity to visit Seattle ( northernmost major city in United states). That was my first international trip & 14 hr journey was very tiring. However when I reached there, I was surprised to see people being so cordial to me. I had different image of American’s but I found them totally different. They are intelligent, to the point and understand their responsibility and there is huge cultural difference between Americans and Indians.

As a marketer I was thinking that if I have to launch any product in America, it is easy because most of the people in America behave in similar way. I mean there is similarity between person staying in Seattle and New York City. In all the states Americans are fundamentally liberals at heart & possess similar characteristics such as dialect, music, arts, social habits, cuisine, and folklore.They believe in progress, they're products of the Enlightenment; they are people who believe that through hard thinking and skillful policies, it's possible to solve any problem. So basically what I am trying to prove here is American market/consumer is easy to understand where as Indian market/consumer is not so easy.

Optimists say that India represents huge untapped middle class market; a market critical for global firm. Global marketers feel that India is still poor by global standards – for most of people earning is less than $3 per day per person. So they assume that Indian market is not critical for them & won’t be beneficial for long term. I think broadly both are right but any broad generalization about India is bound to be wrong. Indian market is complex and is evolving rapidly.

From consumer market perspective there is no single India. Every state is different India and their culture, dialect, musical taste is so very different. Inspite of possessing different culture, segmentation within every state is common. There are IT/Pharma/Telecom employees who aspire to global standards and have high expectations. Then there is aspiring middle class. The self employed middle class. The agriculture dependent farmers. The urban poor. The rural poor. All of them have different approaches to consumption. So it depends on marketers which Segment they want to target within a state. Secondly GDP per capita is not good measure to assume capacity of consumption, much worse it can be misleading. Each state is different India and you cannot have mass produced products for them. Segments within each state can be similar but their tastes/upbringing/culture will be different. Do the market research on each state. Understand psychographic and social determinants of state which will further help you in determining their expenditure habit, sizing of Indian market.

Also there is misconception among the marketers that rural India is poor India & it is totally dependent on agriculture. Rural India is neither poor nor totally dependent on agriculture. Rural India represents 50% of India’s GDP (but 70% of its people) and out of this 50% of rural GDP is non agricultural. They are self employed people. Although they are rural, their aspirations are similar to urban consumer. They like 2 wheelers, Jeans, Refrigerator, Cell Phones. Understanding them will help marketers understand their logic of consumption. India is like Kaleidoscope. Every time you research on it you get different perspective – Enticing, different and real. The basic concept of understanding consumer India is to understand a simple fact that there is no single algorithm to segment Indian consumer.

India is definitely a complex market but there are simple facts that managers have to accept. Indian Consumers are very value conscious. They may be poor ( as compared to global standards) but they are not backward. Media has emerged as an important and critical tool in educating people about western culture and consumers are well informed about products and services. They are not overwhelmed by western brands but they can make difference in the global positions of the Individual firm. Take the example of Nokia. The Indian market is growing at the rate of 6 million new subscribers/month. The market cap of top five carriers in India is more than $75 billion. There is message for international marketers here. If you understand Indian consumer right and create appropriate business models, Indian market will surprise you. You cannot expect to flog old and tried products in India and expect to create mass base. India is not easy market to invest in but if done with correct approach, correct segmentation the prize can be very substantial. India is an untapped market ( specially rural India) and is great investment opportunity therefore think like venture capitalist. And instead of asking “ What is the size of market that India offers for my Global strategy” Ask “ What should be my local customized strategy for Indian market” ? Invest in Innovation. Invest in future and say Namaste India !!

“ Future is bright Future is rural India”

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