Brands target India's rural niches

19 August 2013
BANGALORE: Sectors including automobiles, jewellers, whisky and financial services are following FMCG companies in identifying particular niches in rural India in order to increase penetration and revenues.

"The rural opportunity is an ocean of niches," brand consultant Harish Bijoor told the Times of India. "There is not one rural, but thousands of rural niches. Each niche is an opportunity."

Mayank Pareek, COO (marketing and sales) at automaker Maruti Suzuki India, outlined how the business had identified some 300 rural niches over the past five years, from potato growers in West Bengal to blue pottery makers in Jaipur.

"The initiative to identify niche segments was to take the rural drive to the next level," he explained. "The idea was to go granular in our approach. We found that there were numerous small segments within the economy that were doing better than the rest."

The process continues, with the carmaker planning to add another 30 or more niche markets in 2013.

Financial services businesses watch commodity prices as a way of tracking rural wealth. "Every time there is a spurt in the price for any one commodity, you will see heightened activity in stockbroking," said C.J. George, managing director at Geojit BNP Paribas Financial Services.

"You know which commodity is doing well because the stockbroking activity emanates from specific commodity-growing areas," he added.

The value of seeking out niches was further demonstrated in Kerala, where jewellery retailers have profitably expanded.

"Kerala's leading jewellers – Malabhar Gold, Kalyan and Bhima – have 20-25 stores across the state," said Amit Bagaria, chairman of Asipac, a real estate and retail consultancy firm. "The state doesn't have 20-25 cities that go on the map in terms of population."

Global whisky brands have also successfully tapped into particular rural niches, with Famous Grouse being especially popular in the Punjab, while LVMH Moet Hennessy has targeted commodity planters in the south to boost sales of its Hennessy Cognacs.

Data sourced from Times of India; additional content by Warc staff
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