The e-boom has finally hit the rural India. Long thought of as a luxury and domain of urbanites, an e-revolution is silently hitting the rural homes as colour TVs, refrigerators, air conditioners and microwaves become a household sight in villages and small townships.
Products like microwave and air conditioners, which are considered to be very 'urbane', have penetrated the semi-urban markets and experts say that a study of the rural cross-section shows that "in villages in a place like Punjab a 'sarpanch' would have all the gadgets from vaccum cleaners to microwave and AC in his house."
The latest report by the Federation of Indian Chambers of Commerce and Industry pegs the growth of consumer durable goods in the rural markets in the last financial year at around 25 per cent as against 7-10 per cent in its urban counterparts
The report shows buoyant trends in consumer durable goods sector heralded by colour TVs and refrigerators, followed by ACs, microwaves and other electronic gadgets paving the way for further investment in the rural sectors.
"Rural markets have not been tapped in such a big way and there is a lot of potential for growth," says Anil Arora, marketing head, LG Electronics, and adds, "In the last financial year we have achieved a turnover of Rs 4,500 crore (Rs 45 billion) out of which 55 per cent was contributed by the rural and semi-urban markets."
LG is targeting at 65 per cent contribution from the semi-urban and rural markets in the current financial year. Voltas, another big player in the white goods sector, is also eyeing the rural markets as rivals gear up to penetrate the newfound destination.
K D Virmani, GM, sales, Voltas says, "In urban areas the markets have been penetrated to saturation levels whereas rural areas offer great opportunity to marketers for expanding exponentially."
"The demand for microwaves or ACs is slightly lesser in the rural markets than that of CTVs or refrigerators but that is attributed more to erratic power supply in these places than their affordability," says Arora.
Virmani agrees with him: "For past two years there has been a surge in demand for air conditioners. If power situation could be improved the demand would go up further."
Arora explains that the focus has been shifted to rural markets in last one year and LG is tapping the resources by opening more and more branch offices to have faster addressability and access to the respective markets.
Some of the electronic gadgets have become a household feature in rural areas, as Virmani puts it, "Colour TVs and refrigerators are two products that have already found their way in every household in the rural and semi-urban areas."
After colour TVs and refrigerators, the products most in demand are the washing machines and mobile phones. The rural and semi-urban markets have a very high demand for GSM mobile handsets.
"In low-end markets the demand for GSM mobile phones is very high. Far more GSM sets are sold in non-conventional markets like Guwahati than in an upbeat market like Chandigarh," says Arora of LG.
Market experts attribute this sudden surge in the rural markets to multiple factors like disposable incomes, booming economy, timely rains and commercialisation of agriculture.
Another factor that has been instrumental in bringing about awareness in rural areas is media -- both print and electronic.
"The media today is one of the major catalysts in pushing growth by taking the rural consumer close to the urban lifestyle thereby increasing the desire to own these gadgets," says Virmani.
According to Arora the role of media is undisputable but he says good rains have played a very important role in boosting the economy as a result of which the consumer is more relaxed and willing to spend more on lifestyle.
While there are many factors contributing to the flood of consumer durable goods in the semi-urban or rural markets, all experts and studies converge on the fact that rural market is there to grow and it is going to boom in near future as more and more players invest in these markets.