urban rural - society of indian automobile manufacturers preeti siam final presentation... ·...
TRANSCRIPT
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