With rising internet penetration across the country and adoption of online shopping among the masses, companies selling products and services through websites are looking at smaller cities in order to expand their business.
According to eBay India Census 2012 report, out of 4500 Ecommerce hubs, during the time of study, over a thousand hubs were located in rural India, indicating that consumers in the smaller towns of India are a major force in this online growth story. However, there are several logistics, operational and technological challenges when it comes to reaching the consumers living in rural areas.
At iamWire’s Internet Retail Expo 2014, we had a panel discussion focusing on how retailers today, can reach the untapped rural consumers and navigate logistics there. The discussion was focussed upon various challenges that startups and even the existing players face in reaching the rural consumer.
The panel included Harsh Vardhan Sahaj, Sr. VP- Business Development; Durgesh Gupta, CEO, Real Shopee; Vijay Ghadge, COO, GoJaVAS; Anurag Prasad, Senior Editor, Fortune India (Panel Moderator) and Kiran Murthy, CEO, Getit Bazaar.
Harsh started off with a quick presentation focusing on current status of rural consumers in India. As per the studies, there are 38 Mn rural people who have accessed internet atleast once. Also, it has been forecasted that internet users in India will grow to 85 Mn by June 2014.
Some more stats to the session were delivered by Anurag, such as – out of 205 Mn internet users, 60 Mn are from rural areas. Also, out of 110 Mn Mobile internet users, 25 Mn are from rural population.
According to Kiran, to reach rural consumer, one must focus upon 4 main things viz. right product, right medium to promote, easy submission of order and easy payment management.
Also, Vijay believes that if a rural consumer is offered choices similar to an urban consumer, it might won’t work, majorly due to technological challenges. One must sale standard recognizable products, such as school shoes, etc. to initially get a reach in the rural consumer’s mind.
Further, Sanjay highlighted that the major challenges rural areas face is the lack of COD, logistics, trust issues, touch and feel, connectivity, poor knowledge, online security and lack of infrastructure.
He also said that due to bad experiences, plenty of companies are discouraging COD in rural areas. However, Durgesh was of the view that rural eCommerce transactions are majorly cash driven and one really need to find alternative ways such as voice or catalogue, to reach them.
Anurag then asked to the panel that how in a rural setup, one can make sure, the deliveries are happening as planned. Vijay Ghadge answered, “Setting expectations with entrepreneurs in rural areas is important. Scale is a factor and thus, you must branch out and make connections locally to make things smoother for yourself.”
“There is an opportunity in rural markets. We have logistics company trying new models and reach out to more and more people. We have expansion and impact in rural market. The future is bright for the rural markets”, concluded Anurag Prasad.