Emerging economies are providing the growth to the world GDP than the developed ones is a fact known to all. In fact it’s the emerging markets who miraculously helped the recovery of the world economy. Ditto is true to India, while urban markets are saturated like the developed ones its the rural markets which have become the growth engines in many a sectors. FMCG to Automobiles to Durables to Telecom every sector is looking towards the hinterland.
With 20% plus growth in FMCG, Unilever is believed to be investing heavily by recruiting rural sales force and by increasing retail presence, according to a recent report DTH sales contribution from rural is as high as 60%, talk to any marketer the same story. What does all this mean? are we prepared to this shift of consumer mindset?
Sheer change in numbers are mind-boggling from a mere 200 million urban middle class to almost 700 million heartland’s new consumer class. The stimulus package for rural employment which is close to $8.5 billion is what I believe is doing the trick. For the first time in independent India’s history government is really infusing money into rural system. In next couple of years you will witness real India emerging with gigantic consumption, to illustrate whats in store; look at the rural BPO’s in Tamilnadu and Andhra Pradesh which are significantly cheaper because of low overheads and infrastructure cost. Now look at the economic and consumption impact of education sector’s growth. What “Bangalore” did to urban India is what “Kizhanur village” is going to do to rural India.
In short education and employment with infusion of money by government is bridging the gap between the villages and cities. Imagine 700 million mobile phones ringing at the same time, and now imagine the cash registers..
The pace at which life in a smaller town is changing is unbelievable, young guys are the changing agents powered with education, a mobile phone connection and exposure to big city ambitions are influencing the mindset of elders. This changing India is difficult to understand as this India is diverse and deep.