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RURAL RETAILING

By

R.SATHVEENA - 72060

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INTRODUCTION

• The world’s economic centre is shifting away from the established, wealthy economies of Europe, Japan, and North America and towards the Asia Pacific

• India is one of the fastest-growing large economies in the world. Over the last 15 years India has changed much faster than many predicted.

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• Overall, competition and structural changes within the economy have raised the bar in terms of what consumers have come to expect.

• Retailing is the largest private sector industry . Retail is the sale of merchandise in small quantities to the ultimate consumer.

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The Indian Consumer Is Rapidly Transforming

Outlook– From Traditional to Modernized Traditional

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• From Functional to Lifestyle

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DEFINITION

• Retailing can be defined as the set of activities that markets products or services to final consumers for their own personal or house hold use. This is done by organizing the availability of goods and then supplying them to consumer on a relatively small scale.

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• The mix of variables including price, location, communications, merchandise, physical attributes, services and personnel form the retail mix and these components form the over all strategic marketing components of retailing.

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INDIAN RURAL RETAIL MARKET

Rural Retail Pillars of Indian economy Rural markets are Virgin markets. Retailing is part time . Low maintenance cost. High Transportation and traveling cost. Penetration is facilitated through

intermediaries. 98% of traditional retailing is handled by

local kirana stores.

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Complete utilization of space in traditional outlets

TRADITIONAL KIRANA STORES

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ROLE OF RURAL RETAILING

• Retailing the final phase of the distribution channel it is the availability and distribution that drives growth in rural Indian markets.

• Hence retailing will be significant and will undergo greater organization and maturity in rural markets.

• Innovative retail models is the way forward.

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• Study on buying behavior of rural consumer indicates that the rural retailers influences 35% of purchase decisions.

• Therefore sheer product availability can affect decision of brand choice, volumes and market share.

• India offers a huge, sustainable and growing rural market which can be tapped effectively through innovative distribution channels.

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RURAL RETAIL SYSTEM

• Village retailers often double up as money lenders.

• Occupation facilitates multi-person interaction in the closed society.

• Rural Retail spread• Retail premises• Rural retail shelves

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BEHAVIOR OF THE CHANNEL

• Understanding channel behavior has critical bearing in channel decisions.

• The ability to influence the retailer to stock and promote products requires identifying the manner in which the retailer performs his business.

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• The dimensions of channel behavior examined are:

•Credit facilities to consumers•Pricing•Seasonal pattern of stocking•Information source and retailer

influence•Purchase source for the retailer•Channel credit•Purchasing cycle

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DEVELOPMENTS IN RURAL RETAILING

Rural Malls: Chaupal Sagar• Chaupal Sagar first organised retail forays.

It was launched on 15 August. • A warehouse for storing the farm produce

that ITC buys through its e-chaupals. • Initiated as rural shopping-cum-information

centres in Madhya Pradesh. • The first rural mall has come up 40

kilometres journey from Bhopal towards Sehore.

• ITC Spent 3 years and Rs.80 crores on research and development of this concept including investments in E-choupal.

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OBJECTIVE

• An establishment to create a high-quality, low-cost channel for rural India.

• Any organization driven by the profit motive which are served through this initiative:

• Reap benefits from the market they have created

• Creating an entry barrier for other prospective players

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FORMAT

• It has opted for self-service, stocking its merchandise on shelves lining the neat aisles, it stocks a breadth of products no supermarket can. It offers almost everything - from toothpastes to televisions, hair oils to motorcycles, mixer-grinders to water pumps, shirts to fertilizers.

• Most of the brands it sells are national such as Marico, LG, Philips, torches from Eveready, shirts from ITC's apparel business, bikes from TVS, and tractors from Eicher.

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ITC’s Choupalsagar store in Sehore district of Madhya Pradesh

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DCM Sriram Consolidated Ltd. (DSCL)Hariyali Bazaars – Focuses mainly on agri

products. • These bazaars offer – • Quality Agri-Inputs• Financial Services• Farm Output Services• Other Products and Services

• So far, 70 "Hariyali" Stores have been set up in different states across India.

• Ranbaxy’s Fortis Health World is tying up with Hariyali Kisan Bazaar to make entry into the rural market.

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GODREJ AGROVET LTD

• Initiated its rural retail business through ‘Godrej Aadhaar’.

• These outlets offer rural households, the basic food, grocery, apparel, footwear to furniture, kitchenware and home appliances to value-added services including banking, postal services and pharmacy.

• Godrej is planning to setup 1000 stores across the rural India in next five years.

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KISAN SEVA KENDRA

• Kisan Seva Kendra is a low cost business model by Indian Oil corporation of a retail outlet offering fuel and other non fuel value added services with penetration in rural markets generating high returns.

• KSK a one stop center of service(seva) for the farmers at his doorstep making available: Diesel and Petrol with Q&Q Seeds, pesticides, fertilizers and other agri needs Nutan stove, Hurricane lamps Daily needs such as grocery, personal care Stationery for children. Tools, auto spares Location specific value additions Low investment ranging from Rs.6 to 9 lacks with a pay back period of 3 to 4 years.

• It currently has approx. 100 operational stores.

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PALENGKENITO• An innovative retail

format in the Phillipines called the ‘Palengkenito’, which means ‘mini-market’ in English.

• The Palengkenito is a mobile grocery store on wheels, developed to bring retail convenience to less-affluent consumers in the Philippines.

• Specially converted Suzuki minivans are outfitted with a generator, shelving units, food heating elements and a refrigerator.

•The roving store offers quality pre-packed fresh and processed food, snacks, canned goods, toiletries, and other basic household items in small packages and sachets !

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Emerging Trends from Rural India

• Employment• Income• Consumption• Rising Awareness Levels and

its Consequent Influence on Lifestyle

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CONCLUSION• Led by the rising purchasing power, changing

consumption patterns, increased access to information and communication technology and improving infrastructure, rural retail market is estimated to cross US$ 45.32 billion mark by 2010 and US$ 60.43 billion by 2015, says a study by CII and YES BANK.

• Consequently, Corporate India is already firming up concrete plans to tap the rural retail market, which is growing at double the rate of urban markets, with innovative schemes and human resource policies.

• And with 87 per cent of rural markets not having access to any sort of marketing and distribution, this segment has tremendous potential for growth.

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QUESTIONS ???

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THANK YOU