Rural retailing:At a glance
Rural retailing consists of the sale of goods or commodities in small quantities directly to consumers in rural/semi urban markets. The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here. Our nation is classified in around 450 districts, and approximately 630000 villages, which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc. India, like Britain, is also a nation of shopkeepers. With over 12 mn retail outlets, India has one of the highest densities of retail outlets in the world with one retail outlet for ~90 persons. Retailers inspired by the Walmart story of growth in small town America are tempted to focus on smaller towns and villages in India. However, a careful analysis of the town strata-wise population, population growth, migration trends and consumer spend analysis reveals a very different picture for India.
Few Facts about Rural India
70 % of India's population lives in 627000 villages in rural areas. According to the NCAER study, there are almost twice as many 'lower middle income' households in rural areas as in the urban areas. At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas. Middle and high-income households in rural India are expected to grow
from 80 million to 111 million by 2007. In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India.
Opportunity To The Marketers
The above figures are a clear indication that the rural markets offer the great potential to help the India Inc which has reached the plateau of their business curve in urban India to bank upon the volume-driven growth.The Indian rural market with its vast size and demand base offers a huge opportunity that MNC’S cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban.As a result of the growing affluence, fuelled by good monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991, rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income. The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all two-wheeler purchased. The rural market accounts for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is more, the rural market for FMCG products is growing much faster than the urban counterpart.
The Rural Bazar
Large and Scattered market: The rural market of India is large and scattered in the sense that it consists of over 63 crore consumers from 5,70,000 villages spread throughout the country.
low savings. And with the market providing them options. This is different in different
The Infrastructure Facilities like roads. socio-economic
Rural consumers have diverse socio-economic backwardness. warehouses. Hence rural prosperity is tied with
The consumer in the village area do have a low standard of living because of low literacy.
Rural Retailing : The benefits
Traditional The rural consumer values old customs and tradition. Apart from urban retail one can see a lot of activity on the rural front too. The rural bazaar is booming beyond everyone's expectation. low per capita income. etc.•
Major agricultural prosperity. Diverse parts of the country. communication system. an estimated induction of Rs 140 billion in the rural sector through the government's rural development schemes in the Seventh Plan and about Rs 300 billion in the Eighth Plan is also believed to have significantly contributed to the rapid growth in demand. The high incomes combined with low cost of living in the villages have meant more money to spend. A host of companies have started their rural retail/procurement initiatives in the last few years. E-choupal was initially conceptualized as a procurement model. but with the addition of Choupal Sagars (Rural Malls) they are also planned to be used as a reverse supply chain to supply back to villages.
Nearly 60 % of the rural income is from agriculture. ITC's E-choupal initiative is one which has received a lot of media coverage and recognition. financial facilities are inadequate in rural areas. This has been primarily attributed to a spurt in the purchasing capacity of farmers now enjoying an increasing marketable surplus of farm produce. They do not prefer changes. In addition. social backwardness. Hence physical distribution becomes costly due to inadequate Infrastructure facilities. tastes are also changing.
All these are items that are purchased from farmers. F&G items account for more than 70 percent of all retail sales. The current farm realizations for unprocessed items are estimated at around Rs 1. crisil’s study found that supply chain infirmities cause farmers’ realizations to be lower than international norms.Food and grocery retailing .India’s retail industry accounted for almost a third of the country’s GDP at an estimated Rs 10 lakh crore in 2006. About half of the total F&G retail comes from food grains and unprocessed fruits and vegetables. a Standard and Poor’s company. this additional purchasing power in the hands of farmers could add more than three percentage points to the nation’s annual gross domestic product (GDP) growth rate. The F&G segment consists of fresh fruits and vegetables. Crisil believes that increasing the penetration of organized retail into the F&G segment could bring about improvements to the supply chain for unprocessed food items. If this segment shifts entirely to organized retailing and the
Improved supply chain-The supply chain for unprocessed food items in India has many layers leading to high wastages and a high cost of distribution. crisil estimates the retail value of these unprocessed items at approximately Rs 3. This enhancement would come from cost savings that would result from improving the presently underdeveloped supply chain for unprocessed food items. The price paid to farmers for food grains and fresh grocery is currently about 30-35 percent of retail prices as compared to the international norm of over 50 percent.A recent study on the Indian retail sector by Crisil Research.The increased penetration of organized retail into the F&G segment could improve the supply chain and boost farm incomes. shows how much both the rural masses as well as the economy as a whole can benefit from greater organization in the food and grocery (F&G) retail segment. The study showed that organized retail could double farm incomes in India by enhancing farmers’ returns on food items from the current low level of 30-35 percent of the retail price to the international norm of over 50 percent. milk and milk products. fast-moving consumer goods and food grains. Enhance the GDP growth rate-Higher farm incomes would benefit the vast majority of the population that is dependent on an agricultural income.8 lakh crore.2 lakh crore. Moreover.
realizations of farmers are at levels comparable to developed countries. If income levels within this group increase. associated farm incomes could double to Rs 2. traditions. and not just a handful of metros. fatalistic and believe in old customs. the economy would witness an incremental spending of around Rs 1 lakh crore.
Among the mass media at some point of time in the late 50's and 60's radio was considered
. taboos and practices. Significantly. it should also be recognized that it is not that easy to operate in rural market because of several problems. it could add significantly to economic activity. Around 60 percent of the country’s population is employed in agriculture. habits. adding to GDP growth. Thus underdeveloped people and consequently underdeveloped market by and large characterize the rural markets. If farmers spend 80 percent of their incremental income. The major problems faced are:
The number of people below poverty line has not decreased in any appreciable manner.
Problems in the Booming Rural Retailing
Although the rural market does offer a vast untapped potential. Vast majorities of the rural people are tradition bound.
Nearly fifty percent of the villages in the country do not have all weather roads. The crisil study provides food for thought regarding how the country’s retail boom could be harnessed to benefit even rural India. crisil’s study found that higher farm incomes boost the purchasing power of 60 percent of the population. Rural retailing is thus a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems. as is perceived. which happen to be around 60-65 percent.5 lakh crore. Even today most villages in the eastern parts of the country are inaccessible during the monsoon. Physical communication of these villages is highly expensive.
and. more desirable to villagers.
There is a vast difference in the lifestyles of the people.
. which are cheaper. the dialects are estimated to be around 850.
The number of languages and dialects vary widely from state to state. Advertising in such a highly heterogeneous market. The messages have to be delivered in the local languages and dialects. Print medium becomes ineffective and to an extent irrelevant in rural areas since its reach is poor and so is the level of literacy. which is far less when compared to the number of villages. The kind of choices of brands that an urban customer enjoys is different from the choices available to the rural customer. Seven Indian states account for 76% of the country's rural retail outlets. therefore. The difference is also in the way of thinking. This again leads to problem of communication for promotion purposes.
For any branded product there are a multitude of 'local variants'.
Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country.to be a potential medium for communication to the rural people.7 million. is very expensive. region to region and probably from district to district. Another mass media is television and cinemas.
The literacy rate is low in rural areas as compared to urban areas. Statistics indicate that the rural areas account for hardly 2000 to 3500 mobile theatres. Even though the number of recognized languages are only 16.
Even though about 33-35% of gross domestic product is generated in the rural areas it is shared by 74% of the population. The rural customer has a fairly simple thinking as compared to the urban counterpart. The rural customer usually has 2 or 3 brands to choose from whereas the urban one has multiple choices. the total number of which is placed at around 3. which is widely spread. Hence the per capita incomes are low compared to the urban areas.
However. knowledge and information dissemination is crucial for rural retail ventures to succeed. toothpaste. their share on an average is much higher than consumer durables. shampoo. Hence these products provide substantial opportunity to enter the rural markets. hair oil. in case of health beverages and cosmetics like shampoos. tea.Suggestions to overcome the problems of rural retailing
The rural retail can be successful only when integration between the profit and social motive is apparent.
Definitely there is lot of money in rural India.
Broadband and E-commerce : A new world of opportunity for Rural Retail Sales
Broadband Internet access presents a world of opportunities for rural residents. rural individuals can now work. More and more rural citizens are taking advantage of broadband access to do a multitude of tasks online. so far as the rural share in consumer expendables like cooking oil. unwavering rural commitment and staying power will be able to stay longer on this rural race and hence should venture into this territory. toilet soap. Only FMCGs with deeper pockets. large gaps exist. including earning advanced degrees. Empowerment in terms of economic power. purchasing power. Though the rural-urban differentials are not so pronounced in the case of durables. washing cakes and washing powder is concerned. nail polish and lipsticks. The model should empower the rural consumer and at the same time take advantage of this empowerment through creation of demand for its own products and that of its partners. The greatest hindrance is that the rural market is still evolving and there is no set format to understand consumer behavior. and find entertainment right at home in their small towns rather than have to commute to larger cities. learn. But there are hindrances at the same time. Because of its ability to transfer large amounts of data almost instantaneously. reaching new markets for their
. the rural market penetration is low with respect to urban areas. However. Lot of study is still to be conducted in order to understand the rural consumer. electric bulbs.
The level of penetration except for certain products has been negligible so far.
there are a number of other ways in which broadband access can enhance the lives of rural individuals. These include: • Help desk/customer service • Virtual personal assistant • Website development • Writing/editing • Software development • Medical transcription reaching new markets • Market rural products to previously unserved areas • Attract urban customers to rural locations Continuing education • GED/Bachelors/Graduate degrees available online Communicating with friends/family
. By using broadband to both advertise to the closest metropolitan area and enable another way for their products to be sold. they are taking advantage of many of the benefits the Internet can offer to rural businesses.
Other Broadband Opportunities for Rural Citizens
While this fact sheet tells the story of how one rural business used broadband access to extend their reach and create a larger market presence. This business takes their website experience to the next level by selling their products online in an e-commerce environment. staying in touch with relatives or friends.business. gathering pertinent information about their job (such as weather predictions for farmers). or even creating their own information-based job or business. This fact sheet describes one of these rural broadband success stories in detail – an Oklahoma retail business based outside of Oklahoma City that uses the Internet to pull in customers from the nearby metropolitan area.
Today there are more than 2000 of these rural retail outlets in rural areas across the country and a lot of recognition has also come for the initiative. HP. SHELL. and provide him with quality products including fuel. IOC. With the setting up of pumps in villages you are able to reach the customer at his door-step.• Voice over Internet Protocol (VOIP) • Email
Established Companies entering in Rural Retailing
Retail and Petroleum Companies
Apart from various corporate houses which have ventured into the rural retail scenario. The idea is to become a one-stop shop for the needs of a villager. The model has been rolled out rapidly across the country. IBP.
Ring consists of the sale of goods or merchandise from a fixed location. In September 2007 the initiative was awarded the ‘Most Admired Retailer of the Year’ Award in the category of Rural Retailing. or
. such as a department store or kiosk. by the India Retail Forum (IRF). and the ‘Retailer of the year. In the urban areas many oil companies eg.Rural Impact Award’ given by the Asia Retail Congress. Earlier the consumers in villages had to rely on either the unauthorized petrol diesel dealer in the village or travel for 10-15 Kms to buy fuel for his tractors or the pump sets. They have started their rural petrol pump cum retail stores in many villages. some of the oil Private Sector Units has also started their retail ventures in villages.
IOC the fortune 500 oil PSU has started a rural retail venture in 2005. RELANCE has started leveraging their real estate advantage to set-up rural retail outlets.
a retailer buys goods or products in large quantities from manufacturers or importers.
India’s telecommunication sector is witnessing an explosive growth. Banks have woken
Mobile industry players like Airtel. Idea. Vodafone. in small or individual lots for direct consumption by the purchaser. The companies are encouraged by the fact that mobile users are expected to cross 230 million by 2007 end and 500 million by 2010.
The services offered by Banks in rural areas is known as Rural Banking. BSNL. and then sells smaller quantities to the end-user. Retailers are at the end of the supply chain. are eyeing rural India as their new area of opportunity. and tips for health and education and so on. such as delivery. These banks are offering services like e-mail.by post. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy
Rural Mobile Market. In commerce. most of the cellular operators have turned towards rural India to broaden their base and reach. Retailing may include subordinated services. as falling tariffs and rising incomes are bringing mobile phones within the reach of millions of new customers. Internet chat.
Rural areas are expected to drive the next wave of telecom growth in the country.
Cellular service providers seem to be answering the call of the wild as they are entering the so far ignored rural market. Although a huge market in the urban segment remains tapped. says the report.Reliance etc. and they have a potential of adding at least 150 million new subscribers. either directly or through a wholesaler. Purchasers may be individuals or businesses. Retail establishments are often called shops or stores. according to Emerging Rural Mobile Market in India.
a professor at the Indian Institute of Technology.000 such kiosks may dot Tamil Nadu and serve as a new vehicle for banking in rural India. Fifty-eight per cent of the rural households do not have a bank account and only 21 per cent have access to credit from a formal source.897 bank branches in the country (in 2002).12. An automated teller machine that flashes the local language. However. Tamil. which is promoted by Ashok Jhunjhunwala. The kiosk has been set up by ICICI Bank in partnership with network owner n-Logue Communications.000. with the bribe varying between 10 and 20 per cent of the loan amount. In some time.
. By mid-2004. The average population served by a bank branch is 15. Chennai.up to the potential in the rural sector.800. a franchisee network. The number is significant.443 or 47. the Internet kiosk and the ATM duo could well be a proxy bank for rural India. over 10. 32. Building a specialised cadre for rural banking and improving awareness can help reduce default and make these schemes effective. investments in rural infrastructure and cross-selling of products are only some of the schemes directed at the village folk. Often.7 per cent are in rural India. Specialised and innovative schemes to improve rural penetration are the new mantra. supply chain financing for agriculture. Statistically speaking. out of the total 67. If one includes the rural cooperative banks. The numbers compare favorably with Indonesia and Mexico. on its screen is being set up next door. Over 70 per cent of marginal farmers have no deposit account and 87 per cent have no formal credit. The kiosk works on wireless in local loop technology using fibre optic cables. the average could be lower still -. consumers need to bribe officials to get loans. Rural credit cards and ATMs. Approval for such loans takes between 24 and 33 weeks. Only a little over 1 per cent of rural households can rely on a loan from a financial intermediary to finance unforeseen expenses. numbers do not tell the truth.
the number of rural deposits was 30.5 per cent of the total number of advance accounts. The number of credit accounts in rural areas relative to the total rural population is only 3. The per capita deposit in rural areas stood at Rs 2.789 crore of Rs 6.993 crore).780 or around 160 per cent of per capita GDP.2 per cent of the total deposits in the banking system (Rs 13. It is clear that the supply of formal finance is biased against the rural population. However.393 crore).In 2002. Credit per person in rural India is Rs 900 or around 4 per cent of national per capita GDP compared to Rs 20.30 crore out of Rs 43. given the circumstances. In a way.4 per cent against around 10 per cent in urban areas. Overall. ICICI Bank's Internet kiosk scheme can mean financial empowerment for rural people.99 crore).55. The comparative figure in urban India is 103 per cent. if we want to reduce rural India's dependence on non-formal financial sources like local money lenders. the amount of deposits mopped up in rural India is only 14 per cent of the total deposit liability of the system (Rs 1. this is a welcome initiative. in urban India. chit funds.423 crore of Rs 11. the share of rural pockets in the total credit kitty is only 14 per cent (Rs 92. it can be described as a backdoor entry into banking. In contrast. there are 2. which is 100 per cent of national per capita GDP. 18 per cent of the rural population has bank accounts. However. which is 44. Similarly.51 crore rural advance accounts. A 1997 PricewaterhouseCoopers study said that the dependence of low-income households on informal sources is as high as 78 per cent. Branch banking in rural India is a loss-making proposition and existing regulations prevent the entry of agents mobilizing deposits or selling loans. and so on.
.23.150 or around 10 per cent of the national per capita income in 2001.59.600 for urban centres. But. it is Rs 33.
and sold around 200 individual policies for groundnut and castor farmers. in Mahabubnagar. Grameen USA. The message is quite clear. to float a company for giving credit guarantee to such papers. . The last one. can eventually replace the government's age-old crop insurance policy. the cover has been extended to 50 Soya farmers in Madhya Pradesh and 600 acres of paddy crop in Aligarh in Uttar Pradesh. the bank's general insurance arm. ICICI Bank has initiated talks with the Grameen Bank of Bangladesh.In terms of ownership. is slated to hold a majority stake in the proposed non-banking finance company. the combination of the Internet kiosk and a local language ATM can revolutionize the landscape of rural banking without violating the letter of the law. a trust of the Grameen Bank. Weather insurance products provide cover against deviation from the normal expected rainfall. use of credit cards is more prevalent than debit cards.
. The pilot programme of India's first rainfall insurance programme was conducted in July 2003. Since then. a relatively new product in India. debit cards are more in number than credit cards but in terms of transactions. An innovative approach to rural lending can do what the government's continuous pressure on the banking system for expanding the base of kisan credit cards and good old guidelines for agricultural lending cannot. which takes long to settle claims and is expensive both for the government as well as the beneficiaries.
Pension fund industry in India grew at a CAGR of 122. Reserve Bank of India's norm of priority sector landings that stipulates that 40 per cent of loans should be lent to priority sector and 18 per cent of this to the agricultural sector.In this context. a pioneer in microfinancing. when a local area bank bought a bulk insurance policy from ICICI Lombard.44% from 1999-00 to 2006-07. They can do what 196 regional rural banks and four local area banks have been unable to achieve. and not just against drought and flood. Andhra Pradesh. wind speed or other weather phenomenon.
and Foreign sector) in the Indian Banking Industry. . Citibank.21% till 2009. Contagious. schemes. Private. respiratory infections. Despite several growths orientated policies adopted by the government. . pneumonia and reproductive tract infections
. whooping cough.09% from March 2006 to March 2007. tuberculosis.
This section covers the key facts about the major players (including Public. Standard Chartered Bank.Two-wheeler finance industry is projected to forge ahead at a CAGR of 14. medical man power and other health resources are concentrated in urban areas where 27% of the population lives.
HEALTH SCENARIO IN RURAL INDIA
India is the second most populous country of the world and has changing socio-political demographic and morbidity patterns that have been drawing global attention in recent years. malaria.Outstanding Education loan segment is expected to grow at 36.etc. About 75% of health infrastructure.41% till March 2009 from March 10 and a higher 215.Increasing number of millionaires in India is increasing the scope of Wealth Management Services. including Bank of Baroda. the widening economic. infectious hepatitis. 27000 Crore Mark. Kotak Mahindra Bank.88% from May 2006 to May 2007.Indian Mutual Fund industry witnessed a growth of 49.. American Express. ICICI Bank.61% growth 2007 onwards to cross from was recorded in closed ended Rs. HSBC Bank. . worm infestations. Punjab National Bank. State Bank of India. Canara Bank. amoebiasis. 2005-06.The ATM outlets in India increased at a rate of 28. infectious and waterborne diseases such as diarrhea. ABN AMRO Bank. HDFC Bank. . measles.Bankable households in India are estimated to move up at a CAGR of 28.10% during 2007-2011. typhoid. regional and gender disparities are posing challenges for the health sector.
This is reflected in the life expectancy (63 years). with a genuine effort to bring the poorest of the population to the centre of the fiscal policies. nearly 716 million rural people (72%of the total population). mainly for rural health. The health status of Indians. is still a cause for grave concern. not only because of its population explosion but also because of its prevailing as well as emerging health profile and profound political. On the other hand. and 92% of deaths from communicable diseases.dominate the morbidity pattern. To improve the prevailing situation. hypertension. accidents and injuries are also on the rise. occurred among the poorest 20% of the population. this is reflected in the improvement in some health indicators. infant mortality rate (80/1000 live births). which should bridge the gaps and improve quality of rural life. mental illness. Nearly 70% of all deaths.
HEALTH PRACTICES AND PROBLEMS IN RURAL INDIA
Rural people in India in general and tribal populations in particular. economic and social transformations. blindness. have their own beliefs and practices regarding health. non-communicable diseases such as cancer. A revised National Health Policy addressing the prevailing inequalities. They therefore seek remedies through magic religious practices. Some tribal groups still believe that a disease is always caused by hostile spirits or by the breach of some taboo. After 54 years of independence. half of which are below the poverty line (BPL) continue to fight a hopeless and constantly losing battle for survival and health. especially in rural areas. is impe India is drawing the world’s attention. over a period of time some progress has been made. especially that of the rural population.
. However. some progress has been made since independence in the health status of the population. maternal mortality rate (438/100 000 live births). is the current need. the problem of rural health is to be addressed both at macro (national and state) and micro (district and regional) levels. some rural people have continued to follow rich. diabetes. a number of urban and growth-orientated developmental programs having been implemented. which concentrate only on growth of economy not on equity and equality. HIV/AIDS. A paradigm shift from the current ‘biomedical model’ to a ‘sociocultural model’. However. however. and working towards promoting a long-term perspective plan. This is to be done in a holistic way. The policies implemented so far. have widened the gap between ‘urban and rural’ and ‘haves and have-nots’.
are breeding places for snails and mosquitoes. access to healthy and nutritious food.Over 1. nutritious vegetation. Annually. However. are due to infections and communicable. cultural and political onslaughts. and advantageous value systems and community harmony). sneezing or even breathing. These are often the result of development. infectious hepatitis. Waterborne infections. in addition to the recognized cultural systems of medicine such Ayurveda.3 million episodes and over 1000 malarial deaths occur every year in India. Today there are 12 million TB cases (an average of 70%).2 million cases are added every year and 37 000 cases of measles are reported every year. healthy life styles. traditionalmedicine systems. worm infestations and poliomyelitis. typhoid fever. Diseases that are carried in the air through coughing. arising partly from the erratic exploitation of human and material resources. have endangered the naturally healthy environment (e. Infections. an Indian. 19 million of which are active cases and 500 million people are at risk of developing filaria.1. as follows. Infectious diseases dominate the morbidity pattern in rural areas (40% rural: 23. amoebiasis.5% urban).About 100 million suffer from diarrhea and cholera every year.3 2.undocumented. such as diarrhea.3 3.2 Three groups of infections are widespread in rural areas. The majority of rural deaths. 1. whooping cough and pneumonia. such as measles. siddha and naturopathy. for example. clean air and water. and expansion of cattle ranches. unani. which are more difficult to deal with. parasitic and respiratory diseases.g. the ditches. gutters and culverts dug during the construction of roads. which are preventable. the socioeconomic. pesticide use has produced a resistant strain of malaria.3
. tuberculosis (TB). which account for about80% of sickness in India.3 An estimated 45 million are carriers of microfilaria. The basic nature of rural health problems is attributed also to lack of health literature and health consciousness. to maintain positive health and to prevent disease. Diseases that are carried in the gastrointestinal tract. filariasis and kala-azar. include malaria.5 million deaths and loss of 73 million workdays are attributed to waterborne diseases. poor maternal and child health services and occupational hazards. make every fourth person dying of such diseases in the world. About 2. Irrigation brings with it malaria and filariasis.
2 million cases of leprosy. The alarming rate of population growth in rural areas nullifies all developmental efforts. anemia. Only 30% of women had postnatal checkups. for example: mechanical accidents. 3. geriatric and adolescent population. Fifty-one per cent of deliveries are conducted at home by an untrained traditional birth attendant. due to the following. sociopsychological problems of the female. snake. pesticide poisoning. with 500 000 cases being added to this figure every year. skin and respiratory diseases. but to no avail. 4. More than 85% of rural children are undernourished (150 000 die every year). which was 299 million in 1951.4) Malnutrition is one of the most dominant health related problems in rural areas. In addition. vitamin A deficiency and iodine deficiency. (Nearly 1. Only 28% of pregnant women had their antenatal checkup before 16 weeks of pregnancy. passed 750 million in May 2001. Loni (unpublished data). the new National Population
. agricultural. Nearly 100 million children do not get two meals a day.Every third person in the world suffering from leprosy is an Indian. oral health problems. 1. 2. Since 1951. 5. in the villages of Maharashtra State. and diseases due to addictions. which is one of the progressive states. dog and insect bites.and environment-related injuries and diseases are all quite common in rural areas. 7. However. There is widespread prevalence of protein energy malnutrition (PEM). 6. has revealed some alarming facts. the government has been attempting through vertical and imported programs to combat the problems. Very early marriage: 72. Illness and deaths related to pregnancy and childbirth are predominant in the rural areas. The rural population. zoonotic diseases.5% of women aged 25–49 years marry before 18. All women invariably do hard physical work until late into their pregnancy. where the literacy rate is 80%. Very early pregnancy: 75% married women had their first pregnancy below 18 years of age. Only 67% of pregnant women had complete antenatal checks (minimum of three checkups).1 A recent survey by the Rural Medical College.
child survival rates. has highlighted the model as a catalyst of social change and traces its beginnings to DCM’s deep-seated interests in agri-business and its involvement with the sugar business as early as the 1930s and later its entry into the fertiliser sector in 1966. promotion of culturally and socially acceptable family welfare methods. no gender bias in education. fertilizer usage and crop yields. He was excited and wanted to study how it was making a difference in the lives of farmers in the country. besides being an example of inclusive growth that the country is advocating. “Prof David Bell (of Harvard) contacted us after hearing about the initiative from a participant during a World Bank meeting. employment. Harvard had studied the e-choupal model of ITC. The genesis of the retail venture goes back to 1997 when DSCL initiated an agricultural extension programme. Shriram Krishi Vikas Guides. improvement in ‘quality of life’ for all. for example. sound social security.
A team from Harvard came to India to extensively study the model and turn it into a case study. in fact.
Catalyst for social change
. in northern India where the guides were trained agronomists posted in rural areas to address the needs of farmers and solve agri-based problems such as seed quality. and this month it was also presented at their international agri-business seminar at the school. Earlier. President and Business Head of DSCL’s Hariyali venture.Policy 20005 gave emphasis to an holistic approach.” said Mr Rajesh Gupta. irrigation techniques.
Mr Rajesh Gupta is exploring Hariyali’s potential as a bulk buyer. Going forward. to supply large urban retailers with fresh fruits. inputs and access to weather forecasts. is the logistics of having employees in so many different locations and providing for the economic nuances. which would serve as a conduit to rural India for companies who want to sell their products and services there. supply chain inefficiency. Motorola is already using the Hariyali route for its handsets. the report released by the Confederation of Indian Industry and Yes Bank. The study quotes Chairman and Managing Director Mr Ajay Shriram recounting how the company found in this a business initiative “which could leverage the agri-value chain. durables.8 trillion rupees ($45. The major challenge faced by Hariyali in meeting the expectations of the brand. But poor infrastructure. west and south of the country. and cited in the Harvard study. vegetables and grains procured directly from the farming community.” Today Hariyali has 125 rural centers spread over the north. Its onestop shops provide farmers with a range of agri and non-agri products. farm fuels. agricultural inputs and
. and product pricing must be addressed if its full potential is to be realized. attitudes and practices of different regions of the country.It was at this point that the company found farmers asking for a host of quality agri-products at reasonable prices. have a transformational impact and improve the quality of life in rural India. latest farm technology. market prices and other technical knowledge.
India's rural retail market is expected to grow by 29 percent to 1. Rural retail includes fast moving consumer goods. The centers are also IT-enabled and provide farmers critical data relevant to them. an industry body report said. the company wants to experiment retail on the output and input side. On the output side Hariyali is mulling being an “instrumental link” in the retail value chain. and output buyback of farmers’ produce.34 billion) by 2010 helped by rising incomes and changing consumption patterns.
Firms hoping to grab a larger part of the rural market though will be battling infrastructure problems for some years. home to 50 percent of the rural population. The report said rural per capita income would double to 14.000 rupees ($350) by 2012 as more families switch to commercial from subsistence farming.000 rural retail units alongside its fuel stations by 2012 from 1. the report said. They need to view it as a long-term commitment. The Godrej group's retail venture. is planning to have 1. which is expected to list soon will pick up a majority stake in it. there is no organized marketing and distribution in 87 percent of India's villages. Village households are expected to rise to 153 million in 2009-10 from 135 million in 2001-02.400 now. NDTV has learnt that the joint venture (JV) between the Future Group and Godrej could be announced within a month and here is how the JV will work. The development and growth of organized rural retail will result in job creation. and reach 200 by 2009. rise tax generation and improve efficiencies in agriculture. However. plans to almost double its stores to 80 by 2008. Godrej will spin off its rural retail arm primarily Godrej Aadhar into a separate company and Biyani’s venture arm Future Ventures India. check rural migration. probably making rural India the largest potential market in the world. Triveni Khushali Bazaar. Adhar. the report said. it added.
Upcoming:Godrej may tie up with Future Group for rural retail
It is courtship time for Kishore Biyani and A Mahendran of Godrej before they tie the final partnership knot for rural retailing and the king of Indian retail. Kishore Biyani is making sure that even Godrej's partner Hershey's gets to touch and feel what he has to offer. a retail chain of Triveni Engineering and Industries Ltd. and must be continuously innovative as rural consumers are often more price than quality conscious.autos like tractors. Corporate are increasingly eyeing rural areas as drivers of future growth. the report said Indian Oil Corp. the report said. which has 31 rural stores. plans to have 3.000 in the next five years.Godrej Aadhar has plans to expand aggressively.Godrej Aadhar is planning to scale up
. a big enough jump to spur demand for a wider range of products.
The retail market is the next growth frontier for corporate India. a player needs to be aggressive in its outlook and build scale quickly. entering new states and offering newer product categories. as organized retail in rural India awaits the arrival of Reliance Retail.
. while 25% of the rural population is not engaged in agriculture.its outlets to 1250 in next 2 years from current 70 and expects to clock over Rs 1200 crore in revenues from current about Rs 75 crore once the expansion is in place. to capitalize on the opportunity.000 Cr retail business spanning multiple categories by 2015 (at current prices). It offers an opportunity for a large player to build a Rs.
The rural retailing has wide opportunities and scope for the entrepreneurs to enter in. A shift from selling agri-inputs will help these stores target the non-farming segments. It is a little known fact that. Godrej are expanding their retail operations by setting up more stores. current majors like ITC. 40. However. it earns 50% of the rural income.