A few decades ago, many FMCG players made a proverbial discovery of a teeming pot of shining rural gold, now those a notch up the overall consumption ladder like automobiles, and jewelers as well as financial solutions’ service providers are targeting rural niches that have a strong untapped purchasing power.
A TOI news report by Anshul Dhamija analyzes the trend, quoting market experts who feel it makes sense for retailers to look at identifying specific rural segments sliced by both geography as well as occupation. For instance, Maruti Suzuki, the $7-billion auto major, which has a 40% share of domestic four-wheeler sales, has identified about 300 rural niches in last five years, which today account for 10% of the company’s domestic revenues, the report states.
It adds: “The company reached out to niches such as potato growers in West Bengal, blue pottery makers in Jaipur, timber merchants in Gujarat, turmeric growers in Tamil Nadu, granite polishers from Hyderabad, painters from Madhubani in Bihir and nut and bolt manufacturers in Sonepat among many others to beat the 2008 slowdown. Having seen traction, it’s an enthusiastic marketer to the rural niches now.” Many jewelry brands in South India have followed a similar rural niche strategy in expanding their footprints to smaller towns. “Kerala’s leading jewelers like Malabar Gold have 20 to 25 stores across the state.
The rural opportunity is an ocean of niches, the news report quotes brand-expert Harish Bijoor as saying, “There is not one rural, but thousands of rural niches and each niche is an opportunity.” At the advent of the telecom boom, mobile operators had similarly latched on to hidden niches, like the fishermen on the long coast-line, to improve penetration.
Financial services have tracked the rural wealth keeping tabs on commodity prices, too. Even global alcoholic beverages companies have tapped in to the rural niche story, from wealthy farmers in Punjab to prosperous planters in south India. While brands like Famous Grouse scotch whisky have mopped up bulk of their India sales from Punjab, LVMH Moet Hennessy has targeted commodity planters in the south to boost sales of its Hennessy Cognacs.