While there is a general tendency to equate rural India to BoP market, here are some of the consumption numbers that will blow your mind
- 46% of the soft drinks sales happen in the rural areas.
- Rural India accounts for 49% of motorcycle sales.
- Rural India accounts for 59% of Cigarettes sales.
- 53% of FMCG sales happen at Rural India.
Rural India Opportunities
- Talcum powder is used by more than 25% of rural India.
- Lipsticks are used by more than 11% of the rural women and less than 22% of the urban women.
- Close to 10% of Maruti Suzuki’s sales come from the rural market.
- Hero Honda, on its part, had 50% of its sales coming from rural market in FY’09.
- Rural India has a large consuming class with 41% of India’s middle-class and 58% of the total disposable income accounting for consumption.
- By 2010 rural India will consume 60% of the goods produced in the country.
- In 20 years, rural Indian Market will be larger than the total consumer markets in countries such as South Korea or Canada today, & almost 4 times the size of today’s urban Indian market.
Can you dare to ignore this market?
Nice amalgamation of relevant data, Ashish. I think rural market is very important for FMCG/retail, communications and automobiles industries. Internet, not so much yet. Just waiting for a day when internet penetration would be much higher than it is today.
Also, could you please elaborate on what exactly do you mean by “rural
? I mean, do you define it by population, e.g. places with <50,000 people, or by area, or any other metric?
Definition of ‘Rural’ – that’s a great question!! It’s not just ‘people living in villages’ but lets look at how companies define the rural market.
That’s fodder for the next post !
http://en.wikipedia.org/wiki/Agglomeration
Should clear most of your doubts regarding rural, urban, sub-urban….:)
great compilation of stats Ashish. Incidentally I read another article just before this. And that one was talking about employing people in Rural India.
http://www.nytimes.com/2009/11/13/world/asia/13india.html?_r=1&src=twt&twt=nytimes
No wonder then that the share of the rural market is significant.
Ashish,
What does this sentence mean?
“58% of the total disposable income accounting for consumption”
Does this mean rural income group spends their 58% on consuming apart from spending on education, housing and savings?
Kasi
I also had same question ‘What is rural?’ Is it (India – Metros)? then data might be misleading. Even lot of small towns cannot be considered as Rural India but offered good market.
Truly mind blowing Ashish.
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Thanks for compiling this Ashish. Good one.