This action might not be possible to undo. Are you sure you want to continue?
A) Rural Scenario in India: B) Opportunity from changing Demographics in India C) Enablers for growth in Rural Retail D) Highlights of significant players E) Regulations and Policies for the rural retail F) Impediments G) Recommendations.
The Indian rural market with its vast size and demand base offers great opportunities to email@example.com . Where in Eveready considers even the remotest of village as its target customer. 63% of rural population lives in villages of 1000 to 5000 people.Rural Scenario in India: Rural India accounts for roughly 70% of the population.000 distributors to directly providing service to 6. But the good thing is that the retail focus has already shifted to the rural areas.000 people. Neha Singhal neeha.00.000 villages have fewer than 1000 people accounting for 22% of the population. 15% of rural population lives in 20.000 retail outlets. It operates through more than thousand company-owned vans and has over 4. 27. Remaining 3. 90. Two-thirds of country’s consumers live in rural areas and almost half of the national income is generated here. For example Shakti caters to villages with a population of 500 or above. Almost 6. At present 85% of the organized retailing takes place in India’s urban areas.000 large “non urban” areas with population more than 5. For a retailer it is essential to see in which segment it is catering in the above division of villages.000 villages are home to 790 million Indians today.
In 2005: Number of Aspirers= (32*790/100) million= 252.5 million This depicts that 111 million people will shift from below poverty line to the aspirers class.8 million In 2015: Number of Aspirers= (47*875/100) million= 411.5 million In 2015: Number of Deprived= (46*875/100) million= 402. .2 million That is roughly 158 million people will be added to the aspirers class.Opportunity from changing Demographics in India The figure below depicts the changing demographics of rural India. Strivers and seekers constitute the middle class. The above diagram depicts the population of Rural India divided on the basis of household incomes. In 2005: Number of Deprived= (65*790/100) million= 513. The diagram depicts how the increase in household income will lead to increased consumption by various levels of consumers in the pyramid.
Wherein in 2025 one-fifth of the population (seekers) will account for roughly one-third of the rural consumption. In 2015. The shift in rural population from one segment to another will shift rapidly.By 2015 the aspirer class of household will be the largest group at 47% of rural population or 80 million households and will control 55% of the spending. 47% of rural population (aspirers) will account for 55% of the rural consumption. . Hence it will be important for the retailer to keep a track of this and change the merchandise mix in the store accordingly.
Enablers for growth in Rural Retail Rural India will see the consumption growth on per household basis. Three important contributors for the decline in rural poverty are: 1.1% during next two decades and will reach today’s urban level till 2017. This also depicts the change in consumption basket of rural consumers over a period of time. Bharat Nirman Plan 2. With the increase in income rural population will spend increasingly on other products then spending on food. This would help organized retailers. Diversification of rural economy . According to MGI forecast Rural market will nearly triple till 2025 creating a vast potential of $577bn. Government Investment: Rural Employment Guarantee Scheme. Bharat Nirman Plan would provide rural infrastructure at a rapid growth between 2005 and 2009. It will grow at a compounded annual growth rate of 5. This means that rural retailers will have to constantly work on their merchandise mix with the increasing purchasing power of the rural households.
Improvements within agriculture sectors. Average annual household incomes will increase at a rate of 3.3.6% in next two decades will lead to shift of significant number of households from the deprived to the aspirer income bracket. .
The various retailers who have ventured in rural retailing are discussed as under: 1. Aadhaar Godrej Aadhaar is the agri services cum retail initiative of Godrej Agrovet Ltd. These include wide choice and multi-brands of agri-inputs.Highlights of significant players: When organized retail first made its presence felt in rural India. providing loans for various purposes. unorganized retail revolves around the local village shop and the haat. to provide single-point solution to the diverse needs of the contemporary Indian farmer. apparels. footwear. has implemented a one of a kind rural retailing initiative. The total number of Hariyali outlets stood at 101 as of 30th Sep. the expert advice of agronomists and the technological support in shifting from subsistence farming to technology led commercial farming. pulses (chana). FMCG. Companies like DSCL and Godrej who had significant agri-business interests. Each store covers an area of 3-4 acres and is managed by a team of 7-8 people whom the Company trains continuously. menthe oil. The outlets also provide the farmer. toys. the Hariyali Kisaan Bazaar rural departmental stores. 2007. oilseeds (mustard). The company also stepped up its bulk procurement activity and trading activity under review to include various grains (maize. It is a complete solution provider for the Indian farmers and provides professional guidance with an objective to improve productivity. set them up to meet the needs of farmers in a store’s catchments area. These stores tend to target farmers with all sizes of holdings. which DSCL plans to expand to 250-300 outlets by the end of FY 2008-09. While organised retail centered on these stores. higher returns and improved . it wasn’t a pure retailing operation targeting the rural masses. 2. general merchandise. Hariyali Kisaan Bazaar DSCL backed by years of experience in the agribusiness. insurance etc. These stores are one-stop shops meant to meet the occupational needs of farmers by providing agri-inputs and fertilizers. The company also launched credit services during its second quarter 2007-08. coriander etc. consumer durables. wheat). in association with HDFC bank. Hariyali Kisaan Bazaar offers the rural household all farming and consumer products and related services along with financial services under one roof.
Ranjini. FMCG. cold-cuts. price. based on their feedback. Madhya Pradesh. Rajasthan. which the women need to manage their enterprises. A number of corporates are already in the process of partnering Aadhaar for various projects for furthering the initiative. which are relevant to rural customers. thus catering to the complete requirement of the rural household – A one stop shop for Rural India. It has since been extended to in Andhra Pradesh. 3. Umbraj. . Ozar Sangli. Shikrapur. buy back of output. Jharkhand. Armed with micro-credit. HUL imparts the necessary training to these groups on the basics of enterprise management. Presently there are 49 Aadhaar Centers across the country in the States of Maharashtra (Mancher. this translates into a much-needed. it has over the last few months diversified into offering a number of other product categories like – durables. in keeping with the purpose of integrating business interests with national interests The model was piloted in Nalgonda district of Andhra Pradesh in 50 villages in the year 2000. For the SHG women. apparels. Tamilnadu. door delivery of products etc. Ottur. The services offered are crop advisory services. crop finance. sustainable income contributing towards better living and prosperity. The Government of Andhra Pradesh took the pioneering step of supporting the initiative by enabling linkages with the network of DWACRA Groups of rural women set up for their development and self-employment. Gujarat. Project Shakti HUL launched Project Shakti in the year 2001. women from SHGs become direct-to-home distributors in rural markets. Punjab. GAVL also opened its second petro format Aadhaar Express in Kashti. Uttar Pradesh and West Bengal with the total strength of over 39. GAVL revamped its Warden Road “Nature’s Basket” outlet by positioning it as “Authentic World Food”. Haryana. HUL is investing significantly in resources that work with the women on the field and provide them with on-the-job training and support. Alephata. cheese. Karnataka. supply of agri inputs and animal feeds. vegetables & herbs and specialty foods. transfer of information (weather. Niphad. This is a key factor in ensuring the stabilization of their fledgling businesses. Maharashtra. and demand supply). Most SHG women view Project Shakti as a powerful business proposition and are keen participants in it. This store has introduced new product categories like wine. Dindori.880 Shakti Entrepreneurs. Akluj). Orissa. Under the project. Bihar. footwear etc. the venture begun by offering agri solutions to the farmers. While. Chattisgarh. soil & water testing services. processed foods in addition to its existing portfolio of fresh fruits. Maharashtra. HUL offers a range of mass-market products to the SHGs.cost benefit ratio.
there is a marked change in the woman's status within the household. Bonds) ICICI Bank Pure Gold (gold coins). and helping create the conditions for many other enterprises to cater to the rural market. which offers a multitude of products and services to the rural customer. with real freedom. For most of these families. and almost twice the amount of their previous household income.000 Shakti Entrepreneurs covering 5. Personal Credit. 4. and have been functional since August 2003. In addition to money. some of whom will depend on the organization for their livelihood. education of the children. ‘i-Shakti’ . this earning is very significant. As most of these women live below the poverty line. with a much greater say in decision-making. ‘i-Shakti’ has been set up in 400 villages in Andhra Pradesh. health and hygiene. education. The most powerful aspect about this model is that it creates a win-win partnership between HUL and the consumers. and hail from extremely small villages (with populations of less than 2000). Through i-Shakti kiosks. Mutual Funds. ICICI Bank and HUL will work together to provide a new delivery channel for rural India. Other financial services including Investment products (Equity.an IT-based rural information service has been developed to provide information and services to meet rural needs in agriculture.000 villages. and an overall betterment in living standards.00. .A typical Shakti entrepreneur conducts a steady business which gives her an income in excess of Rs. vocational training. Project Shakti is enabling families to live with dignity.00.000 per month on a sustainable basis.1. HUL envisions the creation of 1. In the first phase. bringing global resources and practices to Indian villages as well as higher incomes for farmers. and touching the lives of 600 million rural people by the year 2010. especially the girl child. and builds a self-sustaining cycle of growth for all. This results in better health and hygiene. Life and General Insurance will be offered through this channel. Rural Savings Accounts and Remittances will be introduced subsequently. E-Choupal and choupal Sagar ITC’s e-Choupal is an example of how a commercial venture can provide a channel for knowledge and opportunity.
E-Choupal is an entirely new channel for procuring the purchase of the farmers. Chaupal Sagar: Following the runaway success of its e-Choupals. Kisan Seva Kendra Kisan Seva Kendra is a low cost business model by Indian Oil corporation of a retail outlet offering fuel and other non fuel value added services with penetration in rural markets generating high returns. In e-Chaupal they started with two channels known as Sanchalak and Sanyojak. Chaupal Sagar are built near Samyojak. which kick-started a silent revolution amongst the harried soya farmers of MP in June 2000. E-Choupal consists of a computer. They look for the logistical support and are responsible for cash disbursement to the local farms for their produce. Hurricane lamps Daily needs such as grocery. Sanchalak: Sanchalak is the person in whose house the ITC sets up the eChoupal. Till now there are 19 Choupal Sagars.fertilisers and other agri needs Nutan stove. Uttar Pradesh and Maharashtra. They take care of 40 Choupals and the average distance a farmer has to travel to reach Samyojak to sell his produce is 25-35 kilometers. They basically facilitate the purchase of the products for ITC from farmers. KSK a one stop center of service(seva) for the farmers at his doorstep making available: Diesel and Petrol with Q&Q Seeds. personal care Stationery for children . All of these stores are located in the rural areas of Madhya Pradesh. linked to the Internet via phone lines or. the first of which was unveiled at Sehore near Bhopal in August 2004. 5. the tobacco-to-hotels-to-foods major ITC’s rural foray. by a VSAT connection. pesticides. Each Sanchalak serves an average of 600 farmers in 10 surrounding villages within about a five kilometer radius. so that when farmers come to sell their produce to samyojak and receive cash money then they can shop in Chaupal Sagars. Choupal Sagar provides multiple services under one roof. the company has now moved on to the second phase. A rural hypermarket or a rural mall. Today they operate throough 6. like selling produces and buying quality products for farm and household consumption. increasingly. Samyojak: Samyojak is the cooperating commission agents. And the result is Choupal Sagar.500 choupals in 9 states.
in rural retail summit 2007. auto spares Location specific value additions Low investment ranging from Rs 6 to 9 lacs with a pay back period of 3 to 4 years as said by Sandeep Sharma. It currently has approx. Senior Manager(Retail Sales) Indian Oil Corporation. . 100 operational stores. Mumbai.Tools.
.. under controlled conditions and services related to agro and allied sectors 8. Development of Seeds. Horticulture. 1937 (ACT No. the government announced a long term Pricing policy for urea. Non Agricultural Use Clearance 7. Under PN4/2006 100% FDI is allowed through the automatic route in Floriculture. Essential commodity act: The fertilizer industry is centrally regulated by the government through an administered pricing mechanism & sales allocation under Essential Commodities Act (ECA).Regulations and Policies for the rural retail 1. Animal Husbandry. Intra state agricultural land taxes vary. 3. 1976 5. APMC 2. Agricultural Produce (Grading & Marking) ACT. In the year 2002-03. 1 of 1937) (as amended up to 1986) 6. Urban Land (Ceiling and Regulation) ACT. cultivation of vegetables. prompting the current finance minister to moot for a common GST (Goods and services tax) which would help in bringing all the various state taxes under a common fold including the agricultural income taxes levied individually state to state. Pisciculture. Indian Land Acquisition Act 1894 4. aqua-culture. mushrooms.
Impediments: • • • • • • • Lack of literacy and awareness Low per capita income Wide geographic spread. education system. Competition from local players Recommendations • • Integration of rural initiatives into business model like ITC Corporate should supplement government efforts & resources (infrastructure development. Innovative & Exciting Initiatives such as Village BPO should be given impetus to tap the talent in the rural India. storage) Creating retail stores which should be rural in nature so that the rural masses identify themselves with these stores. Gaps in road and Telecommunications connectivity. Lack of reliable electricity and water supply Limited Distribution network for example cold storage. • • .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.