Hindustan Unilever Executive Director for Sales and Customer Development, Hemant Bakshi, outlines his thoughts on Indian’s growing rural market and the numerous opportunities available to companies for product and service distribution. Bakshi insists that companies must overcome conventional ways of business and become creative in sharing assets, financing, and delivering consumer goods and services to rural customers. We were going to a rural market deep inside Orissa, 150 km from Bhubaneswar. Rural trips are preceded by elaborate rituals: stocking bottled water, topping up car’s fuel tank, packing lunch, and setting out early in the morning for a long and hard day.
We drove down a fantastic four-lane highway, bypassing many small towns, and in 2.5 hours, reached a small town. From here, we turned off the highway to go to Barasaat, our destination, a tiny village with only 400-odd households. It was 15 km from the highway, connected by a narrow but metalled road. We reached our destination in another 30 minutes, clearly a couple of hours ahead of plan.
You cannot escape the poverty in this small village , but it is not as debilitating as one would have imagined. And there are signs of progress everywhere , especially in the shops we visited. Expensive skin creams in small packs, floral perfumes with fancy names, baby products and even hair colours. The retailer is surprised when I ask him if he sells any of these in the village. Why would I stock them it they don’t sell, he says. Not a smart question I guess.
Mobile phones are all-pervasive : our salesman uses it to not only check on stock availability with the distributor and book orders, but also to warn his wife that he is unlikely to return home on time. His caller tune is Waka waka. I am surprised at his comfort with mobile technology; I just about restrain myself from asking him to fix my phone that keeps switching networks while we are there.
We need to expand our network in rural areas and need more people from these parts to work for us. So how much should we pay them, I ask… and the response immediately is: at least . 120 per day. The reason for such a specific response: that’s the amount you get through NREGA, therefore, anything less than that just does not cut ice. There goes another myth of lowly-paid people in rural areas.
A few days later, I am sitting with my board colleagues and discussing future plans. And the conversation turns to the great rural opportunity waiting for us to tap. Where does urban area end and rural area begin? Travelling from Bhubaneswar to Barasaat , you would find it difficult to say. In fact, the lines between urban and rural areas, from a marketing and distribution point of view, are blurring rapidly.
There are many reasons for this, but connectivity is the key. Roads built in the last decade have had a significant impact in blurring these lines. Cellphones have also connected rural to urban parts. Media on mobile is changing pop culture: my nine-year-old son in Mumbai and the 21-year-old salesman in rural Orissa have the same ringtone. Probably both of them saw Shakira do the Waka in a popular TV advertisement and downloaded it on their phones.
A silent revolution has taken place. Rural literacy has gone up nationally, but as in many other things, averages hide more than they reveal. If you leave out four states where the progress has been slow, in rest of the country, literacy in rural areas has increased dramatically in the last five years. Even more interestingly, female literacy has outpaced overall literacy in these states. This is probably the singlelargest drive towards educating people ever in the history of humankind.
Even more interesting story is that in a recent, large-scale survey carried out in rural India, the single-biggest concern for people was children’s education , followed by healthcare and housing. Food, employment , etc, came much lower. Not only are we seeing a rapid rise in education levels, but this trend will accelerate. And as we all know that education is probably the greatest leveller and connector.