Before getting into issues like whether the Indian rural market stands and theopportunities for corporate’s to explore it or not ... let's look at the definition of rural India According to the census of India, villages with clear surveyedboundaries not having a municipality, corporation or board, with density of population not more than 400sq.km and at least 75 per cent of the male workingpopulation engaged in agriculture and allied activities would qualify as rural. So,from the above stated conditions, there are 638,000 villages in the country. Of these, only 0.5 cent has a population above 10,000 and 2 per cent havepopulation between 5,000 and 10,000..Now for some facts and figures The Indian rural market today accounts for onlyabout Rs 8 billion (53 per cent - FMCG sector, 59 per cent durables sale, 100 percent agricultural products) So clearly there seems to be a long way ahead.
Prospects for companies planning to enter rural market or what is thepotential of rural market
Seventy percent of India's population, or approximately 700 million people, livein rural areas. 75 percent of the population is agrarian. With such a largenumber of potential consumers, it is clear why multinational corporations wouldlike to successfully penetrate the rural Indian market.
Large, Diverse and Scattered Market:
Rural market in India is large,and scattered into a number of regions. There may be less number of shops available to market products.
Major Income of Rural consumers is from Agriculture:
RuralProsperity is tied with agriculture prosperity. In the event of a crop failure,the income of the rural masses is directly affected.
Standard of Living and rising disposable income of the ruralcustomers:
It is known that majority of the rural population lives belowpoverty line and has low literacy rate, low per capital income, societalbackwardness, low savings, etc. But the new tax structure, goodmonsoon, government regulation on pricing has created disposableincomes. Today the rural customer spends money to get value and isaware of the happening around him.
Villagesvhave a traditional outlook. Change is acontinuous process but most rural people accept change gradually.
Rising literacy levels:
It is documented that approximately 45% of ruralIndians are literate. Hence awareness has increases and the farmers arewell-informed about the world around them. They are also educatingthemselves on the new technology around them and aspiring for a betterlifestyle.
The infrastructure facilities like cementedroads, warehouses, communication system, and financialfacilities,transportation facility are inadequate in rural areas. Hence