The Rural Market is turning out to be the New Hub for eCommerce Players

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There was a time when the world thought rural India to be a land of snake charmers & sages and priests. However, maybe it’s time for the masses to re-think about that notion. Author C.K. Prahalad made a strong point in his book – The Fortune at the Bottom of the Pyramid, the future lies with those companies who see the poor as their customers. It can be seen that the big eCommerce players are now adopting the thought to keep their cash registers ringing.

The rural market is not just limited to buying goods from those small stores that were prevalent a couple of decades ago. The rural penetration of the eCommerce big players has completely changed the overall picture. The rural population is now aggressively placing orders on the eCommerce sites. The population of the lower tier towns is now placing orders for technical products, fashion clothing and high-tech smartphones. High-end cell phones are considered to be one of the fastest selling products in the rural markets. The internet penetration has enabled the big eCommerce players to reach out to the rural areas. However, these areas still face the problem of low internet connectivity. One would wonder that what good can be an expensive smartphone in the areas of low internet connectivity! Nowadays, smartphones are not just about internet connectivity. Reports show that the rural population is buying these phones for the sake of a good camera & video recording. Fashion garments are not far behind in terms of the goods ordered online by the rural markets. The rural population is very excited to try the latest in fashion. Catering to the Prime Minister’s vision of Make in India & Digital India, the economic development in the rural areas is offering huge opportunities for the marketers to tap the market. One cannot deny the fact that the rural markets are huge in terms of population. E-tailers are now focusing on expanding their reach and create demand among the rural customers. Ankur Bisen, senior vice-president, retail & consumer products division of Technopak, said, “Nearly 50% of the country’s retail of $589 billion comes from rural India. Right now, the penetration of e-commerce in rural India is zero. So the market opportunity is nearly $300 billion.” Rural people do have the money and the aspiration to succeed. However, many small towns are way distanced from the urban hubs. eCommerce can help bridge the gap and deliver to these markets. Big eCommerce players are now entering these markets with a proper logistics model in place to reach the farthest places in the rural segment. Sridhar Gundaiah, Founder & CEO, StoreKing said the last mile reach is a challenge and thus cracking it through assisted e-commerce route, where a customer goes to a kiosk, place order and then collects it, is the best way. StoreKing has developed its own logistic network as a third-party courier will never reach a rural market.

eCommerce players are now trying hard to overcome the barriers of user experience and customer literacy in these areas to provide solutions using different technologies, devices and languages. Marketing in the different rural areas is very similar to ethnic marketing. One needs to be innovative and create an emotional connect with the consumers. The tried and tested urban approach will not work in the rural segments. However, with more and more eCommerce names trying to reach out to the lower-tier markets via an online approach, the situation is definitely poised for improvement in the coming months.

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“Thinking Aloud” reflects the emerging trends and varied outlook of the rapidly evolving internet and communication sector. An IAMAI publication, this is a part of the market education initiative of the association.


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