Piggybacking NDA government's 'Digital India' initiative, e-commerce giants are trying to capture a major frontier they have been unable to reach so far - the rural market.
Leading e-commerce players like Flipkart, Snapdeal, Infibeam and mobile wallet major Paytm have signed MoUs with the government to reach far-flung areas. Ministry of Communications and Information Technology wants to connect e-commerce companies with its common service centres (CSCs) in villages. As many as 100,000 CSCs have already been set up and the government plans to add another 90,000 by the end of March.
The government believes this would not only help CSCs earn revenue but also generate employment by facilitating development of ancillary industries such as handicrafts, textile, etc.
For Paytm, CSCs provide an opportunity to recruit banking executives in villages and use these centres as payment banks. "The payment bank is going to be one of the initiatives to make sure that villages get quality banking service. We will recruit people from villages to be part of our payment banking teams. They would represent us in rural areas. In fact, what we see is a new level of service where people can request an agent in the vicinity to come and provide banking services at their doorstep," said Kshitij Sanghi, Vice President, Paytm.
For online marketplaces, rural India provides a huge untapped market for FMCG and electronics goods. According to a report by AC Nielsen, the FMCG sector in rural and semi-urban India will cross the $20 billion mark by 2018 and reach $100 billion by 2025. Many other reports suggest that durables like refrigerators and consumer electronic goods will witness demand growth as the government is investing heavily in rural electrification.
Snapdeal has signed MoUs with the Centre and various states governments. "We have already initiated a pilot project with the government to train the villagers. We would help the government in converting these areas into e-commerce hubs. Rural market is huge and no one can afford to ignore it," said a senior Snapdeal executive. In UP, Snapdeal is helping khadi product makers sell their goods online.
Infibeam has a dedicated team of executives to train village level entrepreneurs. Such entrepreneurs are already helping Infibeam with packaging and dispatching of online orders. "We have a dedicated customer service team which is training village level entrepreneurs to setup their own stores, list them on different marketplaces at differential pricing. We are also fixing the end supply chain for them," said Neeru Sharma, co-founder Infibeam.