CHAPTER 9
SMALL IS BIG
THE GROWTH OF THE SMALL-TOWN AND RURAL MARKETS
Charged with Potential
“India lives in its villages”—so said Mahatma Gandhi. It is now well known in the marketing and business communities that the potential of India lies beyond its top metropolitan areas and those at the top of the income pyramid. Small-town and rural India are emerging as the next fertile ground not only for consumption but also for talent. Much of the growth across several categories in the Indian economy is coming from these regions. It’s certainly not on the strength of the urban areas alone that India posted a GDP growth rate of 5.8 percent in the last quarter of the fiscal year 2008–2009, compared with expectations of a less than 5 percent growth rate. The savior of the Indian economy in recent times of global depression has been its domestic economy, powered to a large extent by agriculture, which grew 2.7 percent during the last quarter of the fiscal year 2008–2009 while manufacturing growth turned negative at 1.4 percent.1
The increase in rural purchasing power is reflected in rural growth in a number of categories. For example, for the fiscal year 2009 (April 2008 through March 2009), rural volume growth for fast-moving consumer goods (FMCG) was estimated to be 5 to 12 percent higher than urban growth in many other categories.2 Already, India’s telecom sector is looking to these areas for its sustained growth. By the end of the first quarter of 2009, the number of mobile subscribers ...
