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The above-mentioned modern formats of retailing have not as yet served the rural consumer. However, off late, some private players like ITC, HLL and DSCL are trying out innovative methods of retailing in rural India.

3. Indian Rural Market

3.1 Opportunity

The importance of the rural market is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users, 38 per cent of all two-wheeler, half of all TV sets, fans, pressure cookers, bicycles, tea, salt and toothpowder sold. What is more, the rural market for FMCG products is growing much faster than the urban counterpart.

3.2 Problems in Rural Marketing

Although the rural market does offer a vast untapped potential, it should also be recognized that it is not that easy to operate in rural market because of several obstacles. The major problems faced are: -

• Underdeveloped people markets
• Lack of proper communication facilities
• Poor media reach
• Many languages and dialects
• Dispersed market
• Low per capita income
• Low levels of literacy
• Prevalence of spurious brands and seasonal demand

3.3 Understanding the Market

Rural marketing is a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems. The alternative 4As Model when applied to the rural retailing scenario comes up with the following challenges: -

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* Contributed by -
Harmesh Mehrotra & Manu Arora,
MBA (IB) 2004-2006,
School of International Business,
Indian Institute of Foreign Trade, New Delhi.