Rohit Sud: 08FT-039

Rural India accounts for 65% of retail outlets Colgate to derive half its sales in 5 years from rural India Marico pushing into small villages (less than population) Inc in demand due to : rising aspirations exposure to urban life higher disposable income

Challenges now shifting from building markets to servicing these markets Low volume per outlet (less than Rs per shop), hence replenishment speed is becoming important

Vans Used by Eveready and J.K. Dairy Eveready has 1000 vans, distributors, 44 warehouses Largest company owned van distribution system in India Reach 6 lakh retailers daily

Mobile Traders Sell variety of daily need items Carry products on bicycles, mopeds, handcart, etc Visit 1-2 villages daily Mostly buy the product, and then sell it Deep reach (small villages < 2000 population) Not yet used regularly by companies, since not organised

NYKS (Nehru Yuva Kendra Sangathan)Model Autonomous organisation under Ministry of Human Resources Caters to dev. of non student rural youth Young people hired as National Service Voluntees (NSVs) on 2 year contract at Rs. 2000/month Required to organise cultural / sports events in nearby villages Used successfully by Colgate for distribution / selling in rural areas Emerged as the lowest cost distribution model till date

SHGs SHGs used successfully by HLL, TTK, Prestige and TVS Mopeds Project Shakti now spread over 260 districts and 12 states Enables HLL to target low population (<2000) villages, increasing HLL reach to more than 1,40,000 villages

Hub and Spoke format pioneered by Coca Cola Uses all possible formats (truck, auto rickshaw, cycle, hand cart, mule) to transport from nearest hub Penetrated 40,000 villages from 2001 to 2003 Marico using well connected towns as feeder towns For each depot, super distributors – assigned about 30 small towns- sell to distributors in small towns – sell to retailers Been a great success for Marico, to be able to reach even smaller towns (population of 5-10,000)

Samsung has tied-up with the Indian Farmers Fertilizer Cooperative (IFFCO) for marketing the hand-sets to rural consumers Nokia has entered into a partnership with HCL Motorola and Nokia with ITC e-Choupal Godrej has tie-up with Jyothi Labs for marketing Godrej Tea across the country

Rural retail here to stay Companies to follow unconventional means to stay ahead in the race for more share of wallet Companies that can tap each possible efficient resource for distribution to increase gains Companies with conventional channels to find it difficult to sustain them