Urbanisation has been a feature of India for many years, but thanks to the COVID-19 pandemic and consequent shutdown, the country is now experiencing reverse migration to the countryside and smaller towns with consequent implications for rural demand.
One out of four workers in a town or city is a migrant – 120 million out of 497 million, largely employed in unorganised sectors like construction and handlooms. Of these, 20 million have returned home.
A recent pan-India study by consulting firm MART talked to returning migrants in order to understand what’s next for them and how they will behave in a post-COVID scenario. (For more details, read WARC’s report: The opportunity for sustainable rural growth in India’s COVID-19-driven reverse migration).
Most migrants have little job security and have travelled long distances – half over 1,000km or more – and while they earn relatively little (the average is Rs 11,000 (US$145) per month) almost half of that is sent home.
“This money adds to rural incomes and consumption,” says Pankaj Mishra, partner and head of research at MART. “How it will be post-COVID is important to understand.”
At the moment it looks like many people will return to their jobs in the cities but one in four say they will not. “This is a positive sign for marketers that want to create rural demand, but it is a concern for industries expecting them to return,” Mishra notes.
Those not returning to their earlier jobs are likely to opt for short-distance migration instead. “They will relocate to nearby places because they now have a skill that might get them less money than in the cities but more than in the village,” explains Mishra.
What does this mean for brands? One expectation is that returning migrants will continue to buy the brands they know, so distribution will be key in the short term.
Longer term, there is an opportunity to reorient the economic model as a shift in the centre of gravity towards rural areas boosts demand and potentially leads to more stable, sustained growth.
Sourced from WARC