Assignment

Submitted to
Maam Asma
Submitted by
Faizan Akbar
Roll no: 07

Subject
Agribusiness Management
Topic
Rural Markets of Pakistan
Institute
University of Agriculture Faisalabad (UAF) Toba Tek
Singh Campus
Date: 25-03-2018
Rural markets: Untapped goldmines of potential growth
Country’s rural markets, which, without a doubt, have a huge untapped potential for growth, are
almost nowhere on the radars of the big goods and services providers, while the shrewd or perhaps
street-smart mobile and motorcycle makers, having realised the benefits of exploiting both rural and
urban consumers equally, are sitting pretty on the piles of profits. 

Pakistan’s rural areas are far more populated than the urban parts. The goods and services providers
target urban markets because the average affluence is higher. The mindset among producers is the
rural markets would not be able to afford their products. They leave the rural markets open to low
quality informal producers that, in fact, charge the same prices for inferior products as there is no
competition from the quality producers.  The rustic population buys ice cream, bakery bread,
informal carbonated beverages, non branded toffees, candies and chocolates at almost the same
rates as in the cities. They buy soaps, shampoos, toothpastes, and cosmetics of inferior quality at the
standard prices of their quality counterparts. By ignoring the rural market the quality producers are
in fact limiting their market size. The sales of motorcycles in the rural regions are higher than urban
centers. The rural population prefers branded and dearer two-wheelers over the low end models.
When the rural demand is slow the growth in motorcycle sales stagnates –evident from the fact that
motorcycle production almost came to a halt due to negative agricultural growth last year. 

Rural market also provided opportunities to mobile phone manufacturers and cellular network
service providers. As the markets in the urban regions started shifting from analog to digital phones,
sales of analog technology based telephones increased in rural areas. The rates of analog phones
also declined which came within the buying range of the rural poor. The use of SMS increased more
in rural regions as the consumers in cities shifted to WatsApp and Viber for exchange of messages
and pictures. 

The current population of Pakistan is 195,058,089 (195.05 million) based on the latest United
Nations estimates. About 39.2 percent of the population, which translates into 77.107 million
(7,71,07,125 people in 2017), is urban, while the rest, which is the rural population stands at 117.95
million (11,79,50,964 people in 2017). The median age is 22.7 years. The consumption of food, goods
and services is higher among the young. As the median age of rural population is lower than that of
urban, they have higher consumption needs.

In textiles and clothing, the mushroom growth of brands pushed the nonbranded producers out of
urban markets. They were then forced to pay attention to the rural market. Some of them imitated
the designs of larger brands and marketed them in the rural regions. Now some larger brands are
establishing their shops in semi urban and rural areas along the main highways.   

The rural population in Punjab has larger access to goods and services available in the big cities. This
is because 80 percent of the population in Punjab lives around major highways like GT road.
Moreover, road connectivity in the rural regions is better in Punjab followed by KP. The rural
populations of Sindh and Balochistan remain largely deprived of better goods and services enjoyed
by their urban peers. The businessmen must realize that in order to attain economies of scale and
enlarge their market share they would have to develop products suiting the rural communities.