India?s rural income is slated to grow from $572 billion to $1.8 trillion by the year 2020. 70% of the population which lives in rural India accounts for about 50% of India?s GDP. Since 2000, the per capita GDP in rural areas which stands at 6.2% CAGR versus 4.7% has been growing faster than in urban locations. Hence most companies have recognised the need to shift focus to rural from urban in order to get the lion?s share of the market. The big challenge that sellers face today is reaching the dispersed rural masses with diverse cultures and languages and finding cost effective means of making this happen. Digital technology could be one of the means of achieving this, but how feasible is it to implement in the Indian countryside? Let us examine some of the key trends of digital penetration and usage in rural India.
According to the Internet and Mobile Association of India, as of June 2012, out of the 833 million people residing in the rural parts in India, there are 38 million internet users and 12% of them could access the internet on their mobile phones. What is noteworthy is that this population that accesses internet via mobile phones has increased seven fold in just two years?from 0.50 million in 2010 to 3.6 million in 2012.
Key factors that have helped in increasing mobile penetration in rural areas include falling prices of handsets, increased battery life, lower data charges and improved network infrastructure and this trend is likely to continue. There is still a very sizeable market for used mobile phones, majority of which are not connected to the internet. It is estimated that the unique mobile users are around 100 million. Awareness and access of internet via mobile phones for entertainment and communication are currently the highest as compared to other online services such as e-commerce, education, jobs and social media which are slowly but steadily picking up pace.
In the coming years, as mobile and internet usage increase in the rural markets, organisations targeting the rural markets need to come up with a marketing strategy vastly different from today?s approach to the market. As opposed to the urban markets, the challenge in the rural markets is targeted at reach, rather than gaining their attention. On account of significant variations in the profiles of rural population, homogeneous approaches may not work. With a sound database and analytics of profiles of individuals, targeted marketing for products and services could be successful.
Rural customers traditionally value community recommendations for their buying decisions. Social media marketing can be gainfully deployed with smaller communities focusing on their interest areas and using them to promote products and services. Building partnerships with NGOs, financial institutions and government agencies to create social platforms and gently nudging the rural customers to buy their products and services through these platforms, is required to be done. ITC and Hindustan Lever are two good examples of early practitioners of ICT in rural marketing who have been successful in using such approach to win over rural customers. Personal devices like smartphones and tablets are non intrusive media available for marketing organisations to reach out to such customers in innovative ways.
To win over rural customers for new offerings, businesses have to invest in all round the year communication and engagement with the potential customers. Many organisations find this hard to do as the timelines for the returns are not predictable. With digital technologies and the understanding of the pockets where penetration and usage pattern is good, companies could start seeding their offerings, using relatively inexpensive media and slowly expand in other territories based on such experiences. The rural population which is connected via mobiles is predominantly putting it to use for the purpose of entertainment and communication. One of the key inhibiting reasons for not using other content is due to lack of relevant content available in local languages. Businesses would be able to benefit a great deal by being attentive to this need and ensuring that content relevant for decision making is made available to the rural masses in vernacular languages in an entertaining manner.
Although last mile connectivity continues to be the major challenge to establish the reach with the rural areas, there have been innovative initiatives like DakNet in Orissa and Babasaheb Ambedkar Open University (BAOU) in Gujarat through buses equipped with ICT using which the rural citizens are able to access the internet for their needs. While penetration of personal devices and access to the internet will grow steadily, in the medium term, common services centres (CSCs) set up by various State governments could be leveraged to some extent. CSCs were announced and rolled out with a lot of fanfare but the public-private partnership envisaged is yet to come up with a sound business model. Organisations keen on tapping rural markets cannot ignore these CSCs and in fact should study carefully the successes achieved in some states and use them to pilot their plans for rural markets.
In summary, understanding the usage patterns of rural netizens, determining how to stay engaged with them, sizing up internet-enabled and non-enabled mobile phone usage and creating appropriate content in vernacular languages, would be critical to making digital marketing a success in the rural areas.
The writer is CEO, Global Talent Track, a corporate training solutions company