The great Indian consumption story is not over yet, at least in small towns and rural markets. The ‘India inside’ has been fairly well insulated from the global economic slowdown, even though cities are hurting. There has been no impact on the rural economy as 66% of the rural population makes a living from agriculture. "Rural markets now offer great opportunities to marketers trying to beat the economic crisis," says Pradeep Kashyap, Chief Executive Officer, Rural Marketing Consultancy, MART and Vice-President, The Rural Marketing Association of India, (RMAI). Sample this:

• Villages and small towns, not cities, are driving much of the 15-20% growth expected this year in consumer durables.
• Rural India has fuelled a 71% rise in telecom subscriber additions.
• There are 72 million Kisan Credit Card users in rural India, almost as much as their urban India counterparts.
• In 2008, fast-moving consumer goods saw 22% growth in cities and an amazing 57% in rural markets.

LG Electronics
It expects rural revenues to grow from Rs 4,180 crore (35% of total revenues) in 2008 to Rs 5,490 crore (45%) this year. "LG will aim for first-time buyers to grow share in rural India," says Moon B Shin, Managing Director, LG. "We will strengthen our presence by stressing on affordability, availability, choice and by using distribution." LG expects a transition from conventional TVs to flat/slim TVs to catch up in rural areas. "We are coming up with new products for the rural markets," he says.

Samsung
Samsung expects rural markets to contribute 30% to its consumer electronics turnover this calendar year. To increase visibility, Samsung is running the ‘Dream Home’ roadshow. It is a four-day exhibition in smaller markets, where it showcases mass market and premium technology products. "The idea is to increase brand awareness," says Ravi Zutshi, Deputy Managing Director, Samsung. The company also plans to set up flat TV displays in multi-brand counters in smaller markets. Products are tailored to the needs of rural consumers. For example, frost-free and direct-cool refrigerators have stabiliser-free operations to take care of voltage fluctuations; the cool pack feature in the freezer maintains the temperature despite prolonged power cuts; and toughened glass shelves can withstand up to 150 kg of weight.

Philips
Philips is using its home lighting distribution network, of 1.8 million outlets, to strengthen its rural presence. Through this network, it will push lifestyle products such as entry-level irons, mixer-grinders, DVD players and radios. "The focus is rural as it has seen incremental sales," says Vivek Sharma, Chief Marketing Officer, Indian sub-continent. Philips has tied up with Markfed, a primary agriculture co-operative society (PACS), in Punjab. There are 4,000 such co-operatives that advance loans to rural people to buy seeds, among other things. However, 20% of the loans with PACS can be used to buy household goods. Philips has listed its products with 20 Markfed outlets. Marketing activities will start next month. Philips also has a project with The Energy Research Institute (TERI) to test solar lanterns in rural areas.

Whirlpool

Tata Goldplus
Goldplus is the Tatas’ mass-market jewellery brand. About 60% of the Rs 80,000 crore jewellery consumption happens in rural and semi-urban towns, according to the World Gold Council (WGC). And there are no organised players in this segment. Consumers lose around Rs 7,000 crore due to adulterated gold, according to the Bureau of Indian Standards (BIS), an organisation run by the Ministry of Consumer Affairs. That’s what prompted the Tatas to launch Goldplus in October 2006, says LR Natarajan, Vice-President, Goldplus. The Rs 400 crore brand, with products in the Rs 2,000-4 lakh range, is now present in 30 towns across six states. It expects 50% growth this year and will account for a tenth of Tatas’ jewellery business revenues. Goldplus hires unemployed youth as its rural ambassadors. They learn about gold and its manufacturing process; they then educate rural people by using educational films, flip charts and booklets prepared by Goldplus. Prospective customers are invited to visit the factory and Goldplus showrooms.

Maruti
Car penetration in the hinterland is one to two per thousand persons as against 10-11 per thousand in the cities. By using panchayats, primary healthcare members and regional rural bank members to reach potential buyers, Maruti’s rural revenues increased from 3.5% of total sales to 8.5%. Over 60,000 cars were sold in rural markets between April 2008 and February this year. The auto major has identified rural parts of Maharashtra, Gujarat, Rajasthan and Punjab as high-potential markets. It has tied up with regional rural banks to offer car finance and with ITC’s e-Choupal programme for sales promotions