interestingly i have been reading a lot of articles, reports, discussions on rural spending. But i remember studying ‘Fortune at the Bottom of the Pyramid’ theory way back in 2005-06 when i was in b-school and now all of a sudden its back again. with real numbers and figures and growing leaps and bounds.
So an article by Wharton says that rural spending in india has bypassed urban spending.In absolute terms, the spending by urban India during this period was pegged at Rs. 2,994 billion (US$53,607 million) and spending by rural India at Rs. 3,750 billion (US$67,144 million)These findings are part of a recent report titled, “Sustaining the Rural Consumption Boom,” published by Crisil, a Mumbai-based global research and analytics company.
The Crisil report says that ownership of TVs in rural india went up to 42% in 2010-11 from 26% five years ago.Also one in every two households has a mobile phone. WOW. It also says that the consumption pattern is shifting from necessities to discretionary goods. Which means they are spending less on food and more on so called “new necessity” goods. It also says they expect spending to rise on education, healthcare and entertainment but that’s yet to be seen.
So suddenly companies have increased their rural spending budget and who are these companies? FMCG, durables, 2/4 wheelers etc. Suddenly the fortune is becoming real, the treasure stories true and all the Indiana Jones’s of the world are hitting the villages.But it makes one sit back and wonder.Is the rural india hit by the consumerism virus and are they aping to be like their urban counterparts?
We all have the image of our villages (our great-grandfathers definitely remember) being simple and easy living. A place for quiet and peaceful living without the car horns or kids glued to their tv or videogames or having home cooked meal instead of pizzas for dinner. I know its easy for me to say as am a city kid and has grown up with all the little goodies around me and now am acting like an uptight idiot and saying all the goodies i had are bad for them. Thats not my point.
MY point is that are we pushing our mindless consumerism to people who are better off without it? Yes let them have cable tv and refrigeration and bikes and cars. But are they spending money on that instead of buying healthy food like veggies and fruits? are they spending less to send a child to school or provide proper sanitation to family members? Is having a TV more important than having a clean toilet? Are they spending money on coke and pepsi rather than making sure they have clean drinking water? The Chhotu Maggi ad is a classic example of a small and low priced product launched for the rural market. But do we really want their kids to also forgo wholesome meals like urban kids and join the obesity rates?
I may be over-reacting and everyone can think their own good but does a anyone can sell anywhere do the concerned good. I dont know. But i think that in the race to get toplines, bottomlines , market share, global presence etc companies are not looking beyond their balance sheets and trying to squeeze the man for all his worth. The government should get these companies to in turn also develop employment opportunities, education, awareness, clean sanitation and many more too.
Wrong or right but doesn’t seem right to me.