Urban Rural

Source: NSSO

Source : IMRB Panel Data for Sept 2012

79%

96%

61%

78%

66%

74%

53% 49% 51%

38%

63% 65% 64% 64% 61%

44%

32% 25% 23% 23%

14% 11% 10% 9%

All India 2012

Urban SEC ABC Rural R1R2R3

Demographic Classification Urban (MN)

Rural (MN)

Total (MN)

Rich (Income > INR 1million per annum) 5 1 6

Well off (Income >INR 0.5million per annum) 29 28 57

Total (MN) 34 29 63

% of total 63 MN individuals 54% 46%

% of total population (MN) 9% 3.5% 5% Source : IMRB Panel Data for Sept 2012

MPCE in INR (Average monthly expenditure – at constant prices of 2004-05)

2004-05

2009-10

2011 – 12

Growth (2012 over

2004)

Urban 1052 1200 1360 29%

Rural 559 599 707 26% Source: NSSO Reports

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Decile1

Decile2

Decile3

Decile4

Decile5

Decile6

Decile7

Decile8

Decile9

Decile10

Urban Expenditure by Categories

Durable Goods

Other consumer services

Conveyance

Medical care

Education

Clothing & Footwear

Fuel and Light

Processed Food

Vegetables

Edible oil

milk and milk products

Pulses

Cereals0

200

400

600

800

1000

1200

1400

1600

1800

2000

Decile1

Decile2

Decile3

Decile4

Decile5

Decile6

Decile7

Decile8

Decile9

Decile10

Rural Expenditure by Categories

Source: NSSO 2007- 08

Average Monthly Spend in Rs per household

All India Urban

All India Rural

All categories 12430 5463

Personal care 2328 1109

Household care 1763 729

F&B 8339 3624

Average number of categories per household

22.8 16.3

Source : IMRB Panel Data for Sept 2012

Source : IMRB Panel Data for Sept 2012

96%

100%

93%

99%

90%

98%

87%

93%

Any detergents/washing soaps Any toilet soap Any shampoos Any tooth paste/ powder

All India Urban All India Rural

42%

21%

76% 50

%

88%

83%

73%

52%

xx%

Premium %

Source : IMRB Panel Data for Sept 2012

xx%

Big Packs %

96%

93%

99%

90%

87%

93%

Any detergents/washing soaps Any shampoos Any tooth paste/ powder

All India Urban All India Rural

96%

89%

47%

22%

99%

92%

Source: NSSO 2007- 08

URBAN 28% RURAL 22%

My family & friends believe that I am doing

well in life

URBAN 71% RURAL 64%

Standard of living

URBAN 67% RURAL 61%

I worry about

my child’s

future

Its is worth

paying extra

for good

quality

product

URBAN 73% RURAL 78%

URBAN 79% RURAL 64%

Its is worth

paying extra

for branded

products

URBAN 28% RURAL 23%

I like to try

new brands

The opportunity gateway

A priority across the board

Find the current system inadequate. Prefer private schools

Extending beyond school to college /vocational training

English - highly aspirational

Associated with good quality education

A symbol of modernity and opportunity

Needed to perform in a competitive environment

Safeguarding Future

Even girls want to use their education and not let it go waste. They seek financial independence through a job or some sort of occupation, even after marriage

In families that don’t allow the girl to work, there is a need for home based job that utilizes education

Service and manufacturing together account for 54% of rural value added - consistently growing

42 MN are employed in non-agricultural establishments which registered a growth rate of 4.56 % during 1998-2005

Source: The Economic Census of India Non-Farm Occupation in Rural India: A. K. Mukhopadhyay, D. Gangopadhyay & Saswati Nayak 2006

Non-farm activities in rural areas are witnessing a rise in entrepreneurship and employment, which

are growing at a faster rate than urban areas

Most of the migrants are absorbed in the unorganized sector – as working class in the bigger cities

Working as shop hands, domestic help, labor in the industries …

Heavy Migration leads to increasing number of NRV’s

Regularity of incomes courtesy the “Postal

Economy”

Bring urban lifestyles and brands to the villages

Beginning to realize the economic advantages of a smaller family

With more disposable income there is a higher propensity to spend

Has also led to child centricity and with it child indulgence

Creates life aspirations

Impact estimated to be equal to 5 years of education

Learning platform …which allows for new behaviours and role demonstration

TV - collective family viewing. Dissolves traditional family structure. And makes for greater intra family communication

Exposure to urban trends driving brand consciousness

Remarkable difference between villages with road and media access and those without

Bringing greater access to products/ experiences/ attitudes

Spurring entrepreneurship

Higher retail presence – making the retailer an important influencer

Better infrastructure is making it easier to realize aspirations – by reducing the effort needed to access one’s desires

NREGA - Rs 40 K crores spent, 120 MN (40 MN households) covered in 2011, Rs 10K/beneficiary household

Bharat Nirman

Mid-day Meal Programme

PDS

Integrated Child Development Scheme (ICDS)

Pensions – Old Age/ Widows/ Disability

Road Infrastructure Development Fund

Rural Health Mission

Government Initiatives ensuring increased money in

the rural Indian’s pocket… More disposable income

Sources: Rural Informatics And The Impact Of Government Schemes On Rural India by Anjan K.S

Mobile TV

J & K 56% 39%

Maharastra 45% 38%

Gujarat 53% 36%

Rajasthan 61% 26%

U P 59% 24%

Chattisgarh 19% 21%

West Bengal 34% 34%

Assam 39% 39%

Odisha 31% 31%

M P 34% 19%

Jharkhand 37% 14%

Bihar 50% 10%

Source: Census 2011

Source: IMRB I-Cube 2012

Share of rural household debt by source of credit, All India, 1951-91 (Percentages)

Institutional Non-Institutional

Year Bank Cooperatives Government Total Instnl

Relative/ Friends

Money Lenders

Others*

1951 1.1 4.6 3.1 8.8 14.4 68.6 8.2

1961 0.3 10.4 6.6 17.3 5.8 60.9 16.0

1971 2.4 20.1 6.7 29.2 13.8 36.9 20.1

1981 28.6 28.6 4.0 61.2 9.0 16.9 12.9

1991 29.0 18.6 5.7 53.3 6.7 15.7 24.3

*”Others” includes non-institutional source other than friends and relatives and moneylenders, e.g., traders, agriculturist money lender, landlord, etc.

Source: NCAER

Role of caste

Community pressure

Power dynamics

Dependency on ‘external’ factors

Government

Weather

Marketer

Availability / access

Uncertainty of money flow

Lower risk taking ability

Financial safety / security

1,00,000 villages with >2000 people population account for 50% of rural consumption

6,00,000 villages

R1, R2, R3 account for 50% of population and ~ 75% of consumption

16 languages, 800+ dialects State-wise variations in rural demographics

Social / Aspirational Fulfillment

Increased income

generation

Ability to create

freedom / independenc

e

Productivity Improvemen

t

Desirability

+

Affordability

Create it Solve a real problem

Workable cost Not just cheap

Direct Benefits

Emotional Hooks

Convenience

Community Acceptance

Family Usage Direct Benefits

Emotional Hooks

Convenience

Family Concurrence

Family Usage

Cultural reference points

He is unlikely to cook the Sunday meal

Accessible success/ aspiration

Want to be doctors, computer engineers, police inspectors, teachers. Not air

hostesses or cricket commentators !

Continuous change rather than disruptive change

Developmental not transactional

About delivering a better standard of living & quality of life within the rural

milieu

Products are supposed to act as a catalyst for

upward movement

Reason to believe

Products can’t be just socially desirable. Need a reason to exist

Strong reassurance sought

“ most powerful network in India “ ,

‘”used by a billion Indians”

Local hero stories

Local success stories are inspirational

Makes it accessible

Injects pride in the possible

Not country cousins

Don’t instruct. Instead demonstrate functionality

Create admiration for rural smarts

Use youth or kids as protagonists - much

admired by all

Simplicity

Multiple options and price points puts them through a complex

judgment

Its why recommendations from trusted sources – including retailers -

work better

Short term vs. long term

Need to feel success NOW

Long term profitability and savings difficult to process

Immediate rewards, discounts, benefits of small spends are

appreciated

Celebrities have lower value

Certainly get attention

But don’t influence buying behavior

19 % Brands which

show ads featuring a

popular person are more trust

worthy

Authenticity

Affordability

Acceptability

Awareness

Accessibility