KIT: Growing Drivers for Rural Indian Opportunity

strategic tools for the practising manager

RISING INCOMES: Due to a number of factors such as microfinance products, exemption from income tax, NREGA, mass media penetration, investment in rural infrastructure and the increased production of higher-value crops, disposable incomes in rural households are increasing, thus creating a positive scope for retail opportunity in rural India.

COMPARABLE GROWTH: The spending patterns of rural consumers are now comparable to their urban counterparts. The rural middle class is growing at 12 per cent as against the urban middle class growing at 13 per cent.

SECTOR-WIDE GROWTH: Various sectors have witnessed growth in the last few years. For instance, the FMCG market has grown by 23 per cent and the telecom industry by 31 per cent in rural India.

RISING DEMAND: Media penetration has increased awareness among rural consumers. This has increased their willingness to spend, creating demand for modernised products in place of locally available items. The demand for premium brands has also risen in rural households.