�ݺ�ߣ

Rural Retailing
Sanjib Kumar Parida
MBA (Agribusiness)
School of Agribusiness and Rural Management,
Dr. Rajendra Prasad Central Agricultural University
1

“Retailing includes all activities involved in selling goods or services
directly to final consumers for personal , non business use.” - Philip Kotler
Retail comes from the Old French word tailler, which means "to cut off,
clip, pare, divide" in terms of tailoring (1365).
It was first recorded as a noun with the meaning of a "sale in small
quantities" in 1433
About Retailing
2

EVOLUTION OF RETAIL IN INDIA
Source : www.ibef.org/ Retail March 2019 Report 3

 India is a leading destination for retail investment
 Efficient logistics and supply chain is one of the key factors for success.
 Retail sector proves to be a backbone to a host of allied sectors (eg.: agriculture,
logistics etc). *Organised retail sector – 3% *Unorganised retail sector – 97%
Retail in India
4

Source : www.ibef.org/ Retail March 2019 Report5

Source : www.ibef.org/ Retail March 2019 Report
7

Retailing Trends In India (Past, Present & Future)
Retailing In Past :
Characteristics:
 Traditional unorganized sector
 Only local grocery shops called “KIRANAS” are available
 Apart from them local fairs, hawkers, pavement vendors
 No standard patterns for selling were followed
Retailers characteristics:
 Not educated or merely educated
 Family customs
Consumers characteristics:
 Awareness levels were low
 Family sizes were big so incomes were low spending is low
 Choices were less 8

Retailing In Present
Characteristics:
 Both organized and unorganized sector
 Still more than 90% is unorganized sector
 Multi braded retailing is the running trend
 Organized sellers follow well-defined selling, supply chain models,
highly skilled employees corporate’s have entered the retail industry
 Online retailing is occupying a good market share
 Perspective has changed, retail stores have no more restricted to
necessity shopping
 Family disposable incomes have increased so shopping has become a
recreation and hobby
9

Retailing In Future
 Characteristics:
 Promising sectors likely to grow in
future are fashion, life style, food &
groceries
 100% FDI in retailing projects a
better future
 Competition would benefit the
customers
 E-commerce and M-commerce play
a major role in retailing
 Organized sector will be in a
growing trend where as un organized
sector will loose its market share
 Retailers will be looking for employees
who have good leadership skills,
detailed understanding of CRM &
supply chain concepts
 Retailers should have ability to
communicate with global customers
 Futures consumers will be more aware
and demanding
 Environmental concerns and corporate
social responsibilities of retailers play a
dominating role in choosing them by
the consumers 10

Rural Retailing-Overview
 70% population lives in villages
 About 6 lakh villages are in India
 Rural retail are growing @7%
 A real source of energy
 Hub of raw materials
Consumption contribution Rural Urban
Soft Drink 46% 54%
Cigarettes 59% 41%
Consumer durables 59% 41%
FMCG 53% 47%
Motorcycle 49% 51%
Consumption Contribution of Rural India
11

Source: NSSO Report (2004-05) & NABARD All India Rural Financial Inclusion Survey 2016-17
10
5
7
3
4
10
5 5 5
7
P
e
r
c
e
n
t
a
g
e
Consumer Expenditure
Rural Urban
12

 Rural India accounts for roughly 83.3% of the population where 6,38,000 villages
and 593districts consist of 742 million people.
 15% of rural population lives in 20,000 large ―non-urban‖ areas with population
more than 5,000 people.
 63% of rural population lives in villages of 1000 to 5000 people.
 3, 90,000 villages have fewer than 1000 people accounting for 22% of the
population.
 In 2010-11 LIC sold 55% of its policies to rural areas
 Of over two billion BSNL mobile connections 50%are in small towns or villages.
 41 million Kisan Credit cards have been issued against 22 million credit cum debit
cards in urban areas.
Source: Rural Retailing in India at International Journal of Social Sciences
RETAIL PROSPECTS IN RURAL INDIA
13

Importance of Rural Markets
 Rural per-capita consumption expenditure grew by 11.5 %.
 Households having income between Rs. 90,000 to 2,00,000 are
increasingly by 5.7 %.
 Projected growth rate of such households is 11% by 2009-10.
 22% population having income more than 10,00,000 in Rural areas.
 Rural employment has gradually shifting from Agriculture.
 Logistics industry contributes to 3% GDP in India as compared to 53%
contribution to China.
14

Challenges in Rural Retail Opportunity in Rural retail
 Large number of small markets
 Poor road connectivity
 Poor availability of suitable dealers
 Inadequate banks and credit facilities
 Poor storage system
 Low investment capacity of retailers
 Poor visibility and display of products
on rural shop shelves.
 Developing new markets
 Increasing disposable income
 Increasing per capita income
 Large population
 Higher purchasing capacity
 Market growth
15

Significant Players
 ITC- Choupal Saagar
 DCM Shriram – Hariyali Kisaan Bazaar
 Tata Chemicals Ltd – Tata Kisan Sansars
 Triveni Engineering & Industries Ltd- Triveni Khushali Bazaar
 Future group-Godrej Collaboration – Aadhaar
 Mahindra & Mahindra- Subh Labh
 HUL – Project Shakti
 IOCL – Kisan Seva Kendra
 Reliance- Rural Business Hubs
 HPCL- Apna Pump
 Murugappa Group – Parry’s Corner
16

ITC E-CHOUPAL (Business Model)
ITC
Insurance
Company Input
Supply
Agri-Input
Company
Agricultural University/ State Agriculture Dept.
Marketing
Assistance
Technical
Guidance
Farmers
Training
Source : The Agribusiness Book, Pg. 518
17

Choupal Sagar :
 Rural Mall
 Warehouse for storing the farm produce that
ITC buys through its e-choupal.
 ITC spent 3 years and Rs.80 cr on its R&D.
Benefits to Farmers :
 Option of selling to choupal sagar.
 Earn 25 % higher prices than selling to
mandies.
 Profit realization increased up to 60 %
 Availability of branded products at best prices
 Availability of loan facilities
 Difference in net earning will be high
Future Plans :
 Open 1000 rural
malls in India.
 Invest in 5 acre malls,
costing between Rs.
3-5 cr each across 15
states.
 Setup 40 rural
shopping centres
across Rural MP &
UP
18

Godrej Adhaar
 India’s 1st agri service cum rural retail venture.
 A complete solution provider for indian farmers.
 Service Offered :
Crop advisory services, soil and water testing services, crop finance etc.
Operations :
 24 outlets in 8 rural locations
 Each outlet serves 20 villages in its vicinity
 JV’s with Apollo pharmacy, Tata Agrico, Bajaj Alliance Life insurance &
HPCL for value added services at the outlets.
19

Haryali Kisan Bazaar- DCM Shriram
 302 oulets across 8 states .
 Provides end to end ground level supports to
farmers
 Improves profitability & productivity of
farmers
Operations :
 24*7 support through a team of qualified
agronomists at the centre.
 Provides good quality, multi branded agri
inputs.
 Provies access to modern retail banking and
financial services like insurance.
 Fuel, FMCG, consumer goods, etc.
Future Plans :
 Rapidly scale of the
operations & create a
national footprint
covering all the major
agricultural markets
of the country.
 Catering to cultivable
land of over 30 m
acres & touching the
lives of over 10 m
Farmers.
20

What should keep in mind to get success in Rural Market ?
4 As
Affordability
Availability
Acceptability
Awareness 4 Ps
Product
Place
Price
Promotion
21

Conclusion
 The Corporates have found a good business at bottom of
pyramid.
 Both villagers as well as the retailers are benefited by opening
of rural retail vistas.
 Now high quality products are available in rural areas. The
rural consumers get high quality products at affordable prices
and marketers increased their profits by targeting rural
markets.
 Still a lot needs to be explored. Retailers need to study the
behavior of rural purchaser.
24

Thank you for your attention!
25

�ݺ�ߣ

Rural Retailing

More Related Content

Rural Retailing