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Rural markets likely to recover faster than urban: Kantar and GroupM report

By M4G Bureau - December 04, 2020

The report says that despite the differential impact of Covid19 across India, consumers in rural parts look more confident of a rapid recovery in the economy

India’s leading data, insights and consulting company Kantar and GroupM’s experiential marketing unit Dialogue Factory have released a Rural Covid Barometer report which provides a perspective on consumer sentiments, their consumption choices and the behavioural changes brought about by the pandemic.

The survey was conducted in 17 Indian states wherein it explores the lives of rural consumers and their adaptations post-Covid.

Loss of income, socio-cultural norms, health and hygiene protocols and reverse migration are some key challenges faced by the rural population during the pandemic.

The report highlights emergence of new trends which will necessitate changes in the way businesses and brands connect with rural consumers:

  • Heightened focus on rural affluent consumers: The report says that with 1 in 3 rural adults being impacted by the pandemic, the rural economy is likely to take a hit. However, with fewer job losses, the overall impact on rural consumption pattern is likely to be muted in the future. This presents an opportunity for the businesses to sharply target their brands towards the upper end of the rural consumer spectrum.
  • Quest for balancing the budget: The rural Indian is walking the tightrope and is balancing the budget by cutting on “indulgence” categories like cold drinks, ready to eat snacks like chips etc and diverting the savings towards hygiene products.
  • Digital adoption: Like their urban counterparts, rural Indians are increasingly relying on digital services for their day-to-day activities. With the pandemic accelerating digital adoption, there is a huge potential for businesses and brands to leverage mobile as a medium to reach rural consumers.
  • Focus on the future: The pandemic has heightened the worries around health and safety. The report highlights that rural Indians are today more concerned about their future well-being; especially of the chief earners.  With a relatively weaker health infrastructure as compared to urban areas, the mindset of rural Indians is shifting towards financial planning. They are also considering buying health and other insurance products. This opens a large market for the BFSI segment.
  • Last mile connectivity: With commute being restricted, the rural consumer is now increasingly shopping within the village for their FMCG needs. Therefore, it is imperative for the brands to focus on their distribution and last mile connectivity since product availability in the local village stores will significantly impact brand choices of the rural shopper.

“For businesses, we would recommend a regional prioritisation. We believe that the Western India is likely to bounce back earliest. On the other hand, indications seem to suggest that rural south might take longer to recover as the impact of Covid19 on employment has been more severe, which in turn has depressed the economic outlook of consumers in rural south. We see this as an opportunity for brands to deploy their resources across zones in a graded and phased manner,” said Puneet Avasthi, Senior Executive Director, Insights Division, Kantar.

He added that with 1 out of 3 rural migrants not planning to go back to urban India, “We are likely to see a huge shift in rural consumption choices. This will also affect the availability of labour in urban India”.

Also, the report gives a deep sense of optimism regarding India’s economic future; stemming from a healthy growth in the agricultural sector and near universal reach of targeted government programs (75% of all consumers claimed to have received at least one of the major government schemes for rural India; 66% claimed to have received free rations under PM Garib Kalyan Yojana).

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