Can Rural Markat Be Sustained ?

Even though stock markets crashing, companies having high forex losses, profits going south and pink slip to many, rural consumers continue to buy soaps, tractors, mobile phones, shampoos, packaged food, etc.
Companies have struck profits in India’s villages.
But there are two lessons that need attention if the current boom in rural sales has to be sustained for long term.
First, rural consumers often have different desire and limitation than their urban counterparts. It is important for firms to evolve business models that can fit with the consumer’s needs—be it new price points, different product designs, smaller pack sizes or innovative modes of selling.
For example State Bank of India offer its zero-balance accounts for the villagers; Hero Honda’s attempts to win trust by getting its rural sales staff to be “more of a friend of the villagers than a bike salesman”; Hindustan Unilever’s use of local self-help groups to sell its products.
And the second one, both the government and companies will have to plan out whether the current strength in rural demand may be sustainable or not.
Marketing experts have written in an opinion that the recent spurt in rural growth “is owing to a combination of acts of God and acts of government, both of which have a tendency towards erratic behavior”. That is, a combination of good rains, higher food prices and schemes such as the National Rural Employment Guarantee Scheme have put a lot of money in the hands of rural households. Can these be sustained?
The strong and healthy demand of rural India gives profitable opportunities for companies that are rushing into this market. To win this battle, both the government and companies will need to get their act together.
The government will have to ensure that rural incomes rise because of higher productivity and a diversification of the rural economy rather than good rains and government handouts. Companies will have to keep innovating to ensure that their products and marketing strategies keep pace with the structural changes in the rural economy.
These will be the long-term challenges.