MUMBAI: From biscuits to televisions, the expectations of India's rural consumers are changing and price is taking a back seat to brand image and aesthetics a report has said.
Consulting firm Accenture Strategy India highlighted the shift in perspective, driven by the penetration of media and telecoms services, in the latest of its Masters of Rural Markets series, for which it carried out focus group discussions with rural consumers in ten Indian states and surveyed 2,800 rural respondents in eight states, as well as interviewing executives and business leaders.
"Rural consumers are changing in three fundamental ways," the report said. "They are far more aspirational, networked and discerning."
Some marketers no longer bother to make the distinction. "There is no difference between the urban and the rural consumer," Mayank Shah, group product manager at biscuit maker Parle Products, told Livemint. Consumption patterns are broadly similar – with more premium products being sold in rural areas and only total spend being less.
Accenture's research found that 71% of rural consumers buy branded products and the factors driving purchase are weighted 66:34 in favour of brand image, functionality and aesthetics as against price.
"The next generation of the rural consumer who is coming in has a higher exposure level than the previous generation," said Arun Pal, chief operating officer for domestic appliances brand Kenstar.
He cited the example of flat-screen TVs, sales of which are now split evenly between urban and rural areas, but just two years ago these were seen as an urban product.
This underlines another of the report's findings – that four in ten rural consumers are spending more in order to upgrade. In doing so, they are "defying conventional wisdom which says that rural consumers care most about getting the lowest possible price and will settle for sub-standard offerings to get the best deal," the report said.
While the old fashioned image of the rural consumer continued in one of four segments identified by the report – the traditionalist – the others – including steady climbers, young enthusiasts and village elites – were much more brand aware.
Brands need to extend not just their physical reach but their "mental reach" in order to grasp the opportunities offered by these new consumers, the report said.
Warc's recent series on Indian youth made a similar point, when Narayan Devanathan of Dentsu India Group argued that the urban-rural divide was a myth and that the real split was between traditional and progressive mindsets.
Data sourced from Livemint, Accenture; additional content by Wear staff