Rural Retail: The latest buzz

The New Entrant

Kishore Biyani-led Pantaloon Retail, which operates a number of retail format primarily catering to the urban India, is looking at expanding in the rural markets to enhance its presence. Reports exist of Pantaloon Retail's plans to pick up 70 per cent stake in the Godrej Group's rural initiative--Aadhaar. With its latest plans to focus on the rural side, the Future Group looks set to join the bandwagon along with ITC Group. ITC also has a considerable presence in the country's rural side with its e-choupal retail initiative, which is basically aimed at providing a support system to the farmers. Pantaloon Retail currently operates over 6 million square feet of retail space across 48 cities in India with multiple delivery formats covering areas like fashion, food, general merchandise, home, leisure and entertainment, financial services, communications and wellness.

The Biggie - Choupal Saagar

ITC has built a strong platform for its growth through e-Choupal and Choupal Sagars and is best placed compared to others in cashing-on from the growing rural demand. The e-Choupal network comprises of more then 6500 e-Choupals and covering 40000 villages and ~4 million farmers. Apart from the e-Choupal network, ITC also has 21 Choupal Sagars, a chain of retail malls that caters to the needs of rural community by offering FMCG products, farm equipments, medical facilities, banking operations and vehicles. The company has also entered in retailing of fruits and vegetables through three Choupal Fresh cash and carry stores and six Choupal Fresh retail stores.

Hariyali Kissan Bazaar

Another company that has seized upon the importance of reaching out to the rural market is the Rs 2000-crore DCM Shriram group that has launched a chain of rural business centres under the brand name Hariyali Kisaan Bazaar. The Bazaar sells consumer products like farm fuels like petrol and diesel, kerosene and gas, fertilisers, pesticides, seeds, farm implements, vet products, lubes, irrigation equipment, auto parts, consumer durables, drugs, financial services like farm credit, retail banking, insurance and integrated storage facilities. It also acts as a last mile agri-advise and customised agri-solutions on a 24x7 model, explains Chhabra. Each Bazaar is part of a three-four-acre campus, which can accommodate other facilities like farm output warehouses, fuel pumps, tractor service centres, warehouses, bank branches, ATMs etc. The company is planning to rapidly scale up the operations and create a national footprint with over 500 centres across the country.

Godrej Adhaar

The Godrej group is another industrial powerhouse that has walked into the hinterlands by opening its rural malls under the brand name Godrej Aadhaar Stores, which are a complete solution provider for the village folks. A complete solution provider, each Aadhaar facilitates rural credit, water management, agri-inputs supply, advisory services, marketing of rural produce, consumer goods, vet services etc. Aadhaar doesn’t sell its wares at lower price unlike in urban malls but retails only at MRP but only branded items.

Mahindra ShubhLabh Stores

The Rs 6,000-crore Mahindras, the largest farm equipment maker in the country is another key player, that is also into agri-extension services, contract farming. Its branded rural retailing foray is a chain of superstores called Mahindra ShubhLabh Stores, while the farm extension arm is called Mahndra Krishi Vihar. The company has already got into agreements with the governments of Punjab, Haryana, MP, Chattisgrah, Karnataka, AP and TN for contract farming, says an official.ShubhLabh Stores, began in 2002, are present in 11 states—AP, MP, TN, Maharashtra, Karnataka, Gujarat, Rajasthan, Orissa, Chattisgarh, Bengal and Delhi.Over the past three years, the company has pumped in Rs 20 crore into these stores. Now, it is planning to get into food retailing, following its reported loses in contract farming.

Interesting Rural Marketing Examples

Sitting through a class of rural marketing I came across a number of interesting examples of innovative marketing in rural areas. The examples were neat and can help people understand the vast differences between the rural and the urban psyche.

• Henko failed in maharashtra. Why?

It sound like "Hey Nako" which means No, giving the brand a negative connotation in Marathi.

• Dabur's health tooth powder containing Tulsi failed. why?

Tooth powder meant spitting the tulsi out which was considered sacrilege in the rural areas..

• Mahindra with its MAXX model offered metallic colours, aluminium footstep and an elegant spare wheel cover for rural market . Why?

An interesting observation showed that in rural India the cars are generally rented out for functions and ceremonies. The usage pattern necessitates the grandeur that is offered by MAXX with the aluminium footstep, colours and the spare wheel cover.

• In rural west U.P the sales of MP3 players among the farmers is very strong, especially the chinese models.

Chinese models have the perception of being cheap. Moreover the farmer is used to listening to the transistor and the availability of new technology has just substituted the existing need with the option of controlling the songs that can be played.

• Dabur traditionally paints the walls of the roads leading to the temples and mosques in the villages . Why?

The crowd aggregates during all the major festivals, and the huge traffic to enter the temple and mosque provides the marketer the ideal opportunity to tap into his mind space making use of the wall space available. Dabur did just that.

• Cadbury launched the biscuit ChocoBix which was a runaway sucess. Why?

Rural moms still feel that biscuits are very healthy and the child got attracted by the chocolated content. So this provided the perfect product satisfying the buyer and decision maker(mother) as well as the influencer(child).

• Although black is not a lively color and has a lot of negative conotation to it, it worked for "Chik" shampoo. how?

Perception that if the shampoo is black then the hair would be pitch black too. (Funny, but true. Percetion is all that matters)

• In part of U.P, there is a popular brand of gripe water called "daei jee ki 112 saal purani ghutti". What's special?

In rural india "Dae ji" or the mid-wife takes the dual role of acting as the gynaecologist as well as the paediatrician till the child becomes 1-2 years old. She is a huge influencer and positioning a product with "Dae ji" in focus was a big positive. Moreover villages believe in heritage and hence the 112 years mentioned in the positioning statement further cemented the positive impact that dae ji achieved thereby resulting in the sucess of the product.

A special thanks to my professor Mr.Karthik Raina for this lecture,which helped in writing the post.