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The Changing Face Of The Rural Consumer

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Rural consumers in emerging markets of developing countries like India are among the largest and fastest growing segments of the world’s population. The rural consumers in India account for approximately 73% of the India population at present.

Consumption patterns for rural India are beginning to catch up with those of their urban counterparts. A significant chunk of rural consumers are better networked and proactively seek information on brands through multiple sources before making a choice. Rural consumer is gradually moving away from perception of being a Price sensitive segment to a value driven consumer who aspires for best features, utility and aesthetics at a reasonable price. With the significant penetration of media & telecom connectivity now, the rural consumer continues to have significant bargaining power and demand substantial investments from private and public sector.

Evolution of New Age Rural consumer
A typical rural household is no longer traditionally rural; it is gradually marching towards urbane lifestyle. Besides farming as a primary occupation, there is a trend of moving towards secondary occupation such as fisheries business, part time shop etc. which are resulting in dual income rural households.

With the increased disposable income, there is a clear shift in the mindset for the articles purchased during the festivals traditionally from gold ornaments and clothes to electronic durables / small appliances in the household. Better connectivity with the main towns are exposing rural consumers to urban life and higher incidence of educated and informed youth have become active influencers of modern utility & lifestyle gadgets. Despite long power failures and lack of ideal public transport facilities, penetration of durables in rural has increased in last decade or so, TV penetration in rural India is now at 45%., There is clear progression of rural household in ownership of Mobile, Bike, Mixer, CTV, Gas etc., which were not even in the consideration set earlier.The new age rural consumer appears more connected and informed in recent times.

Emergence Of Rural Aspirational Segment
There is emergence of new breed of consumers that are inclined towards big ticket items, branded consumption and is not price sensitive. With the rise in rural disposable income, this set of wealthy rural consumer has also increased.

A large majority of these consumers like visiting retail, buying apparel and are more conscious about their health and fitness. They are not averse to try new products andbrands, always looking for products that improve their lives. Most of them buy new vehicles,durables, electronic gadgets etc. from a nearby city or the best available location.

These set of rural consumers are also at the forefront of Internet and smartphone usage and with increased market information at their disposal, they have become key influencers and opinion leaders for apparel and durable purchase in their native rural community.

This segment of rural consumers has overall spending as share of income close to 80 percent. Also they spend approx. 40 -45% on education, leisure,clothing, health, communications abd transport, which is quite high as per rural India benchmark.

This class of rural consumers though only contributes approx. 5-7 % of the total households but is responsible for 8-10% of the overall India consumption. Their importance also stems from the fact that they are fast upgraders and accept advance technology readily.

Emergence of High potential Rural State Clusters
The rural consumers in this segment have lower than average spends but have excellent propensity of growth due to more people. The emerging clusters of states like Uttar Pradesh, Madhya Pradesh, Bihar and Jharkhand are likely to drive the next level of rural growth. These states are dependent on various government initiatives and smart private investments. The importance of this region is due to the fact that these regions account for approx. 40% of the rural households, and overall spend is highly skewed towards FMCG and food items.

To conclude the new age rural consumer is pivotal to India’s growth story. Increased digitization,large government spends and private investments will further empower the rural consumer. With the contribution of rural Internet users expected to increase to more than 200 million in the year 2018 and online portals further expected to fuel the overall demand, the rural consumer will play an important role in emergence of India as leading consumer economy in the World.

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