Rural Retailing

-The next captivating sector?

By: R. Veena

bhargavi 0911-

057

PGDM-RM

CONTENTS:

RURAL RETAILING-glanceCurrent face of rural retailingApproach towards rural retailingSwot analysisStrategies

Rural retailing:Rural retailing:

Certainly market-Certainly market-driven¸ technology-driven¸ technology-based agriculture-India- based agriculture-India- an economic an economic superpower. superpower.

The retail revolution is The retail revolution is going to act as a going to act as a catalyst catalyst

So the new concept So the new concept that is hitting the that is hitting the market today is the market today is the “Rural“Rural Retailing”.Retailing”.

To start with……..

Rural India accounts for over 50 per cent of India’s GDP.

Rural retail-Tremendous potential as the rate of disposable income is increasing, growing middle class, advent of IT infrastructure and enormous grouped population.

Though sales are expected to be much lower in early stage, but the break even is reached in four-five months of being set up, as against eight-nine months earlier.

What should keep in mind to get success in rural market?

APPROACH TOWARDS RURAL RETAILING

Go to the producer directlySet up knowledge exchange centersEarn respect and confidence with localsProvide retail environment with local

flavors and needs.Treat farmers with respect and serve

them as customers.

Swot analysis

Strengths:• About 70% of India's population

lives in 627000 villages in rural. Middle and higher income

house holds in rural India is expected to grow from 80 million to 111 million by 2010.

• In urban India , the same is expected to grow from 46 million to 59 million . Thus the absolute size of rural India is expected to be double to that of urban India.

• Young population.

Weakness:

• Low literacy rates• Low standard of

living• Traditional outlook• Prevalence of

spurious brands and seasonal demand.

Opportunities:

• 3 times more families lives in Rural India

• Rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income.

• Population-becoming brand conscious • Exposure and increase in literacy rates

will open market further.

Threats:

• Shifting of young generation-rural to urban cities

• Entry of small time players – Study on buying behavior of rural consumer indicates that the rural retailers influences 35% of purchase occasions

• Vast majorities-rural people-tradition bound, fatalistic and believe in old customs, traditions, habits, taboos and practices.

Strategies:ITC- CHOUPAL FRESH: • 54 fresh horticultural stores.• Emphasis- quality and productivity

of horticultural products.• Increase of rural hyper markets.• Provides place for farmers to

bypass intermedaries .• To sell their produce directly to the

company.

DSCL:Expansion of hariyali kissan bazaars.Emphasis – focus on distribution and

infrastructure network.Support the requirements of rural

supply chains.

Thank you