Translation: “Farmer is king”. This seems to be the mantra of rural India these days. [Boston]
Rural India shining
img: via Boston.com
In the 2004 elections, the BJP came out with the now infamous “India shining” slogan. Big mistake. Rural India was still catching with it’s urban half. Urban India was indeed shining, rural India not yet.
The result: the BJP received a drubbing in the general elections at the hand of the rural electorate, which by the way accounts for over 70% of the total electorate. This time around the boot is on the other foot. Urban India is in the throes of a worldwide recession while rural India is experiencing a boom. Rural India is shining.
About 72 percent of India’s billion-plus people live in rural areas. For years, the poverty of rural India was seen as reining in the country’s economic growth. But today, analysts say, it is a critical audience for marketers because it has been relatively insulated from the crippling blow of the global slowdown.
India’s rural destiny still depends on good monsoon rains and robust agricultural production, but four years of bumper crops and heavy government investment in rural infrastructure have given birth to what some analysts call an emerging economy within India.
Critics of India’s economic boom have long voiced their displeasure of the relative insulation of the rural economy from the mainstream and the slow trickle down effect of the economic boom. In hindsight, this insulation has proved to be a boon with the rural economy being shielded from what is otherwise proving to be a global meltdown.
Fortunately, for the rural economy, the boom could not have come at a better time. The urban boom brought a plethora of consumer goods and automobiles (particularly, used automobiles) to the markets and rural India is buying them up at a dizzy pace.
India’s dizzying overall growth levels of 8 to 9 percent, fueled by urban consumption and a boom in the manufacturing and services sectors, may slump to less than 7 percent this year, economists say. But even during the slowdown, companies’ sales are rising in rural and semirural India.
“Things have changed in the last one year. Today, 60 percent of our car sales are coming from rural and small-town India,” said P. Balendran, vice president of corporate affairs at General Motors India, which launched an aggressive rural marketing drive for its small cars in the past year.
About 60 percent of new cellphone connections are in rural areas, according to telecommunications industry figures. Passenger-car sales rose by almost 22 percent and motorcycle sales by 15 percent in the rural areas last month, compared with last year, according to the Society of Indian Automobile Manufacturers.
Textile and clothing retailers that focused on small towns grew faster than those that focused on urban areas, and sales of consumer goods grew by 20 percent in the rural market, compared with urban growth of 17 percent, said Technopak, a research firm that tracks consumption patterns.
So how will this affect some major events in the near term?
Take the launch of the Tata Nano, for instance. The Nano comes at a price and at a time, literally and figuratively speaking, the common man can afford it. Even in a market that’s pushing automakers worldwide closer to oblivion, it would not come as a surprise if Tata’s Nano stood out as the lone beacon of success.
In terms of the upcoming elections, a boom in rural areas should take the edge of anti-incumbency, often a huge factor in general elections in the last 20 years in India. Advantage: the ruling Congress party.
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