Presented

By
Uday Mishra
GSBA Gr. Noida
ukmishra85@gmail.com
August 19, 2010 1
 DEFINING RURAL INDIA
RURAL RETAIL SCENARIO IN INDIA
REGULATIONS AND POLICIES IN RURAL RETAIL
SIGNIFICANT PLAYERS –
1.goderj adhar
2.itc -chaupal
3.hariyali kisan bazaar
BUSINESS MODEL OF ITC
IMPEDIMENTS & RECOMMENDATIONS

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Census of India defines Rural
Settlements as......

Population lower than 5,000 persons

Population density lower than 400 persons/sq.

km

At least 75% of male population engaged in

Agri. activities.

August 19, 2010

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 RETAIL TOWARDS RURAL AREAS
GREAT OPPORTUNITIES FOR MARKETER
THE INDIAN RURAL MARKET

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• Rural India consists of 720 Million
consumers across 6,38,000 villages

• ---17% of these villages account for 50% of

the rural population and 60% of the rural
wealth

• ----Extensive reach is required as to cover

50% market 1,00,000 villages must be
catered Immense opportunity amounting to
US$ 125 billion

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• Rural Retail is growing @ 7% p.a.

• Rural consumption is also shifting from basic

food grains to fruits, vegetables, dairy and
poultry products, as well as beverages

• Demand for better quality food leading to

huge demand for basic foods

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The Rs 140,000 crore rural retail market is expected to cross
Rs 180,000 crore mark by 2010, And up to Rs 240, 000 crore
by 2015 (CII).

The rural revolution is driven by

Rising purchasing power,
Changing consumption patterns,

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increased access to information
and communication technology,

improving infrastructure

increased government
initiatives to boost the rural
economy,
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 OCCUPATIONS URBAN RURAL

Cultivator 5 40

Petty 15 5
Shopkeeper

Wage 20 35
earner

Salary 40 20
earner

Others 18 8

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 US China
India
Total Retail 2325 323 180
Value $ bn

% Salience to above
Traditional 15 80 98

Modern 85 20 2

Source: Census 2001, IRS 2006, AC Nielsen

Source: AC Nielsen
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Is a value seeker
Seeks comforts and amenities
 Does not wish to be seen as the
deprived cousin.
 Does not experiment easily but
this does not mean that “he would not
change”.
Values local relationships because
of unfavourable past experiences
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 1. Essential commodity act: The fertilizer industry is
centrally regulated by the government through an
administered pricing mechanism & sales allocation under
Essential Commodities Act (ECA). In the year 2002-03, the
government announced a long term Pricing policy for urea.

2. Indian Land Acquisition Act 1894

3. Agricultural Produce (Grading & Marking) ACT, 1937

(ACT No. 1 of 1937)(as amended up to 1986)

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54 Non Agricultural Use Clearance--

5. Under PN4/2006 --100% FDI is allowed through the

automatic route in -Floriculture, Horticulture, Development of
Seeds, Animal Husbandry Pisciculture, aqua-culture,
cultivation of vegetables, mushrooms, under controlled
conditions and services related to agro and allied Sectors.

6. Intra state agricultural land taxes -- vary, prompting

the current finance-minister to moot for a common GST (Goods
and services tax) which would help in bringing all the various
state taxes under a common fold including the agricultural
income taxes levied individually state to state.

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GODREJ ADHAR

ITC-CHAUPAL

HARIYALI BAZAAR

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FORMAT OF GODREJ ADHAR
FMCG products, fertilizers, animal feed, etc.
Services like banking, insurance, pharmacy,
postal services and petrol pumps

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 A COMPLETE SOLUTION PROVIDER FOR
THE INDIAN FARMERS
provides professional
guidance with an objective to
improve productivity, higher
returns and improved cost
benefit ratio.
services offered
crop advisory services, soil &
water testing services; buy
back of output, crop finance,
supply of agri inputs and
animal feeds, transfer of
information (weather, price,
and demand supply), door
delivery of products etc.
August 19, 2010 17
24 outlets in eight rural locations across the country
and each outlet services 20 villages in its vicinity

Godrej Aadhar has already forged JVs with Apollo

Pharmacy, Tata Agrico, Bajaj Allianz Life Insurance
and HPCL for value added services at the outlets.

The company plans to set up more than 1,000 stores

by 2010.
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The Trusted Rural Business Hub
Help the customer increase his income, educate the
customer, before you sell to the customer

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 Hariyali Kisaan Bazaar

Mr. Ajay Shriram, Chairman

Mr. Vikram Shriram, Vice Chairman & MD

The concept aims to simplify the

 Private label seeds

 Contract farming – vegetables

 Procurement
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 Hariyali Kisaan
Bazaar
DSCL plans to expand to 250-300 outlets by the end of FY
2008-09.

Each store covers an area of 3-4 acres and is

managed by a team of 7-8 people whom the
Company trains continuously.

It offers the rural household all farming and

consumer
products and related services along with financial
services under one roof.

The company also launched credit services during its

second quarter 2007-08, in association with HDFC
bank, providing loans for various purposes.
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The number of Hariyali outlets now stands at 177,
which the company plans to scale up aggressively to
around 300 outlets by March 2009. Launched in 2002-
03

‘Hariyali’ is now present in 8 states across India

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This concept aims to
Provide the power of expert knowledge
to even the smallest farmer

2. Information helps farmers secures

better price, quality and productivity

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Benefits to farmers include

 Better purchase price of agri-inputs

 Avail information on best farming practices

 Command prevailing market prices

4 million farmers benefited through 6,500

installations covering around 40,000 villages

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 By 2012, ITC Vision is to cover 100 thousand
villages,
which represent 1/6th of rural India, and create
more
August 19, 2010 than 10 million e-farmers 29
IDEA BEHIND CHAUPAL SAGAR

-- MAKE THE POTENTIAL CUSTOMERS

--PROVIDE DIFFERENT CUSTOMER SERVICES

--REAP THE BENEFIT FROM POTENTIAL CUSTOMER

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A WIDE RANGE OF PRODUCTS FOR ALL
SEGMENTS

TRAINING FACILITIES FOR FARMING COMMUNITY

ON SCIENTIFIC FARMING PRACTICES

GODOWNS FOR STORAGE OF FARM PRODUCE

INFORMATION CENTER FOR ONLINE WEATHER

INFORMATION

CONTINOUS
August 19, 2010
SERVICES FROM 6AM- 9PM 31
ESTABLISHMENT OF ATMs AT MALLS

AVAILIBILITY OF INSURANCE PRODUCTSFOR

FARMERS

TIE WITH PRIVATE HEALTH CARE SERVICE

PROVIDER FOR PRIMARY HEALTH CARE FACILITY

TIE WITH BPCL FOR FUEL PUMPS

ESTABLISHMENT OF SOIL TESTING

LABORATRIES

 PUBLIC ENTERTAINMENT
August 19, 2010 32
 ITC

ASSISTENCE
INPUT SUPPLY

MARKETING
TECHNCAL
GUIDANCE
INSURANC AGRI-INPUT
E FARMERS
COMPANY
COMPANY

TRAINING

AGRICULTURE
UNIVERSITIES/STATE
AGRICULTURE DEPT
August 19, 2010 33
o– Increasing costs of land
o– Pace of expansion
o– High operating costs
o– Low margin of agri-inputs
o– Low purchasing power of
consumers
August 19, 2010 34
• Lack of literacy and awareness
• Low per capita income
• Wide geographic spread.
• Gaps in road and Telecommunications
connectivity.
• Lack of reliable electricity and water supply
• Limited Distribution network for example
cold storage.
• Competition from local players

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Farmers get agri-inputs at competitive rates and
have range of products to choose from

 Increasing rural bank aid (loans) helps improve

the
purchasing capability of farmers

 Farmers avail of the services of agronomists to

improve their farming practices, thereby
impacting
on their final produce

Farmers
August 19, 2010 get a better price for their products and36
 • Integration
of rural initiatives into business
model like ITC

• Corporate should supplement government

efforts & resources (infrastructure development,
education system, storage)

• Creating retail stores which should be rural in

nature so that the rural masses identify
themselves with these stores.

• Innovative & Exciting Initiatives such as Village

BPO should be given impetus to tap the talent in
the rural India.

August 19, 2010 37

During the first millennium AD, merchants
referred
to India as the Bird of Gold, due to the
glittering
dynamism of its market. Over the next few
years, the
Bird of Gold is poised to take flight once again.

August 19, 2010 38

THANK
S

THANKS
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