Bharti Airtel, P&G seek to gain ground in India

28 July 2010

NEW DELHI: Companies like Bharti Airtel and Procter & Gamble are seeking to broaden their reach in India, as levels of disposable wealth rise across the country.

Rural India has long been regarded as an attractive target for brands, and governmental employment and road-building schemes are now stimulating demand and making isolated communities more accessible. 

In demonstration of this, a majority of Bharti Airtel's new mobile subscribers are currently drawn for these areas, Shireesh Joshi, its chief marketing officer, said. 

"When we began targeting the rural customer in 2004, it was not a matter of choice but a necessity," Joshi reported.

"Today, Bharti Airtel is well on its way to transforming into a rural company from an urban one. Of our total monthly additions, 60% is rural."

Kainaz Gazder, marketing director of P&G India, similarly suggested it was beyond question that vast potential remained in less-developed regions.

"The growth in rural India is spurred by improved infrastructure that enables reach, awareness of brands and a steady growth in household income that in turn grows consumption," he argued.

A recent forecast from CII and Technopak supported this assertion, predicting smaller towns and villages in India will deliver $1.9bn (€1.5bn; £1.2bn) worth of expenditure by 2015, compared with $487m at present.

The pace of this expansion is set to double that recorded in India's main cities, and will ultimately mean these shoppers should become responsible for 60% of domestic demand.

ITC, the conglomerate, generates over 50% of its revenues from this audience, and has provided PCs with web connections to many groups of farmers, who can then order its goods via the internet. 

"Our marketing strategy was to enhance the incomes of rural people through innovative business models, thereby creating a virtuous cycle of higher incomes, increased consumption and productive investments," S Sivakumar, ceo of ITC's Agri Business Division.

Automakers have proved equally keen to tap in to this trend, with Tata Motors recently developing its Magic model primarily for the demographic.

It has sold more than 500,000 units of this vehicle and another offering particularly suited to the countryside, in the form of the Ace "mini-truck".

"Tata Motors' rural journey is now being taken to the next level through the formation of a dedicated rural marketing team for the commercial vehicles business," Anil Kapur, head, sales and marketing, light and small commercial vehicles, at Tata said.

Data sourced from Economic Times; additional content by Warc staff