rural indian customer - ten myths
Post on 08-May-2015
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The Rural Indian CustomerA Presentation to the Chief Consumer Officers Forum5 June 2009 Ten Myths Ravi Rangan, Comat
+Rural India
• 70% Indians by population live in 638,387 villages
• 87% of villages have a population of < 2,000
• 35% of villages lie beyond standard access
• Number of “middle income and above” in rural areas favorably compares with urban India
• Markets exist in every cluster of villages– 3.6 Million retail outlets– Served by traditional Kirana shops and Mandis– Products supplied from nearby semi-urban
areas
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+The Rural Business Center (RBC)• Initiative by Comat to deliver
services in Rural India
• 1,000 Operational Centers located in Large Villages
• Consists of– Two Computers and
Peripherals– VSAT Connectivity– 3-4 Hours Power Backup
• Over 50 Services delivered:• Government Certificates• Education• Insurance• Railway Tickets…
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+Evolution of the RBC
• Comat has delivered e-governance solutions to several governments
• Successful implementation resulted in centralization of services– Citizen received better and transparent services, but had to
travel to the Taluk– Cost of Infrastructure and Connectivity prevented service
delivery points closer to citizen– Government service delivery alone did not create financial
viability
• Comat decided to setup a “super market” for services that would deliver government and other services
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+RBC Achievements
• 100,000 footfalls and 50,000 customer served daily– 200,000 transactions sustained across 15 days– Over 15 Million paid transactions since Oct 06
• 30%* of covered families visit their RBCs annually
• Recognition and Awards– Microsoft e-Governance Award 2007– National Silver Award for e-Governance 2007– NASSCOM Innovation Award 2007– Legatum FORTUNE Technology Prize in 2008 (Shared the
$1Mn prize)
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The Ten Myths
Anecdotal Experience during RBC Implementation
+The Ten Myths
1. Poor Infrastructure Prevents Quality Product Delivery
2. Addressing Market Requires Reaching All Villages
3. Franchising is Only Option
4. Cannot Manage Rural Employees
5. Rural customer unwilling to pay for premium services
6. Rural Customers are Demanding
7. Rural customer is not sophisticated
8. They will buy – awareness is all that is required
9. Packaging in small size is the only customization that is required
10. Business Opportunities are Limited
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+Poor Infrastructure Prevents Quality Product Delivery
• The Myth– Uneconomical Last Mile Logistics creates barriers for
coventional distribution models– Infrastructure and Power makes technology
enablement difficult
• Reality– Comat uses inexpensive off the shelf infrastructure to
create delivery channel– Community is willing to offset costs in many
situations– VSAT bridges digital divide and enable high-quality
services delivery
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+Addressing Market Requires Reaching All Villages
• Myth– Reaching all villages is essential
• Reality– Citizens prefer visiting larger villages for their
multiple needs and their Masala Dosa– Their purchase is driven by Habit and not by Choice– Creating a distribution point for 5-10 villages at
carefully chosen locations will cover 90% of population*
– Distribution point for 25-30 villages will reach 70% of population*
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+Franchising in the Only OptionMyth
Franchising is only option that works Cannot align remote staff with corporate
culture
Reality Owned and Employee Operated Models can
also be successful Careful selection and training of remote staff
creates a loyal and efficient workforce Allows flexibility to experiment and innovate
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+Cannot Manage Rural EmployeesMyth
Cannot manage employees across thousands of remote locations
Reality Biometrics Fingerprint ensures attendance and
transaction security Technology enabled controls and inherent
loyalty, dearth of choices makes it easier to manage rural employees
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+Rural customer unwilling to pay for premium services
• Myth– Rural customer is unwilling to pay for premium
products and services
• Reality– Rural customers will choose premium services if they
are available and deliver value– Citizens many times “TIP” Rs. 50 & Rs. 100 (keep the
change) for a service worth Rs. 15– These are land records, income and other certificates
that are served across the counter
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+Rural Customers are Demanding
Myth Rural customers are demanding and Impatient They are quality conscious and unforgiving
Reality Absence of Choice, Sub-standard products and Cheap
clones have reduced quality expectations Citizens are patient and do not mind waiting their
turn (do not value their time as much) Much more forgiving product and delivery errors
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+Rural Delivery Chain is not Sophisticated
• Myth• The Rural Delivery Chain is not Sophisticated
• Reality• The Delivery Chain and Citizens are actually
Sophisticated and Enjoy in Exploiting Opportunities• A special pre-paid mobile package was released by a
Telco for a mass campaign run from RBCs• Packaged with Ration Card Issue and Cheaper to
the retail package by 50%• Great Sales - Distribution channel hoarded the
packages and resold it for profit
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+They will buy – awareness is all that is required
Myth Creating awareness drives product sales Brand ambassadors are very effective
Reality Product usefulness and availability is important and
serviceability is critical Huge Influence of Peer Groups and Herd Mentality Less Impulsive buying
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+Packaging in small size is the only customization required
• Myth– Smaller size packaging is only product customization
required
• Reality– Products have to address one or more areas below to
succeed• Cater to an “Immediate need”• Address an unmet demand for “quality of life
improvement”• Transparency and Honesty in product information• Financing in case of capital investments
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+Business Opportunities are Limited
• Myth– Business opportunities including cross-selling are
limited
• Reality– Several business opportunities exist, one has to look– A Rural BPO employing 100 local graduates
processing US Cheque is operating effectively– Lower costs by using fixed infrastructure at night and
appreciation of the community
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Thank You
Rural communities will support quality
products and services
Understanding the rural consumer and making
relevant products/services
available will improve rural lives
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