XPAND report reveals enormous potential for growth in rural markets in India

XPAND, a rural marketing consultancy firm, has released a report on rural distribution in India, highlighting the enormous potential for growth in rural markets. The report, titled XPAND Rural Distribution Kaleidoscope, emphasizes the importance of building a strong rural distribution network to take advantage of the growing demand for goods and services in rural India. 

According to the report, the rural market in India is one of the fastest-growing markets in the world and remained resilient during the pandemic, with demand for essential goods remaining strong. Rural markets have seen significant improvements in infrastructure, connectivity, and literacy rates that have brought the economic potential of rural markets to an inflection point. However, these markets are considered to be the most challenging for corporates to penetrate and grow. 

Prof. Pratik Modi, Professor of Marketing at IRMA, said, "Rural markets in India are becoming more aspirational and brand conscious. This is giving rise to what is referred to as the Masstige brands, which combine the prestige and luxury of high-end brands with the accessibility and affordability of mass-market brands." 

Sanjay Kaul, Founder & CEO of XPAND, said, "The potential of Bharat can be realized only when a rural marketer enters villages and towns below 25k population and realigns its distribution strategy. Our study shows that companies need to implement a mix of wholesale and direct distribution models. Companies can leave established and smaller SKUs in the impulse category to the wholesale channel. For less penetrated and less established brands and product categories with bigger SKUs, last-mile connectivity through direct distribution seems important." 

The XPAND Rural Distribution Kaleidoscope report is based on a large-scale study conducted by XPAND that surveyed 75 districts in the heartland of the country, Uttar Pradesh and Bihar, covering more than 1000 rural retail outlets in 474 villages. The report provides recommendations for companies to realign their distribution strategy to take advantage of the growing potential of rural markets. 

The report underscores the importance of investing in distribution channels for FMCG companies as it can significantly impact their market share in rural areas. The study found that many brands have less than 30% availability, signaling the need for improvement in their distribution strategy. The report also highlights the growing use of smartphones and digital payment technologies among rural retailers. 

XPAND Rural Distribution Kaleidoscope provides valuable insights for companies looking to tap into the enormous potential of rural markets in India.