Rohit Sud: 08FT-039

Rural India accounts for 65% of retail outletsColgate to derive half its sales in 5 years from

rural IndiaMarico pushing into small villages (less than

10000 population)Inc in demand due to :

rising aspirationsexposure to urban lifehigher disposable income

Challenges now shifting from building markets to servicing these markets

Low volume per outlet (less than Rs. 5000 per shop), hence replenishment speed is becoming important

VansUsed by Eveready and J.K. DairyEveready has 1000 vans, 4000+ distributors,

44 warehousesLargest company owned van distribution

system in IndiaReach 6 lakh retailers daily

Mobile TradersSell variety of daily need itemsCarry products on bicycles, mopeds,

handcart, etcVisit 1-2 villages dailyMostly buy the product, and then sell itDeep reach (small villages < 2000

population)Not yet used regularly by companies, since

not organised

NYKS (Nehru Yuva Kendra Sangathan)ModelAutonomous organisation under Ministry of

Human ResourcesCaters to dev. of non student rural youthYoung people hired as National Service Voluntees

(NSVs) on 2 year contract at Rs. 2000/monthRequired to organise cultural / sports events in

15-20 nearby villagesUsed successfully by Colgate for distribution /

selling in rural areasEmerged as the lowest cost distribution model till

date

SHGsSHGs used successfully by HLL, TTK,

Prestige and TVS MopedsProject Shakti now spread over 260 districts

and 12 statesEnables HLL to target low population

(<2000) villages, increasing HLL reach to more than 1,40,000 villages

Hub and Spoke format pioneered by Coca ColaUses all possible formats (truck, auto rickshaw,

cycle, hand cart, mule) to transport from nearest hub

Penetrated 40,000 villages from 2001 to 2003

Marico using well connected towns as feeder towns

For each depot, super distributors – assigned about 30 small towns- sell to distributors in small towns – sell to retailers

Been a great success for Marico, to be able to reach even smaller towns (population of 5-10,000)

Samsung has tied-up with the Indian Farmers Fertilizer Cooperative (IFFCO) for marketing the hand-sets to rural consumers

 Nokia has entered into a partnership with HCL

 Motorola and Nokia with ITC e-Choupal

Godrej has tie-up with Jyothi Labs for marketing Godrej Tea across the country

Rural retail here to stayCompanies to follow unconventional means to

stay ahead in the race for more share of wallet

Companies that can tap each possible efficient resource for distribution to increase gains

Companies with conventional channels to find it difficult to sustain them