The Hindu Business Line : It's a different ball game for rural markets

ALL roads in the consumer durables and electronics market may largely lead to the rural market. But are the players in the industry aware of the nuances of the rural market and that consumer behaviour in the rural market is `demanding and different' from trends perceived in the urban market?

"The buying behaviour in the two markets is very different. In fact, our survey has revealed that the rural market is pre-dominantly first hand purchases," says Ms Rucheera Gumber, Senior Consultants, KSA Technopak. Almost 94 per cent of consumers opt for first hand purchase, with meagre six per cent opting for second hand purchases, she observed.

"This clearly indicates the fact that if the marketers think that the products bought by them in various `exchange programmes' can be sold in the rural market, they are mistaken," industry analysts point out. Though first time buyers are there in large percentage, replacement purchase dominates the urban market especially for higher-end products.

According to Ms Gumber, "the rural market has also got high percentage of first time buyers, but purchase is not driven by any seasonality aspect. For example, in the urban market purchase is more during the festive or marriage season."

Concurring with the views of KSA, Mr Gautam Nath, Director-Corporate Services, NFO India, "our studies have revealed that festival-linked durable purchases is largely a big-city phenomenon."

As per a survey conducted by KSA Technopak on rural outlook, in Uttar Pradesh, Punjab, Maharasthra, Tamil Nadu and Andhra Pradesh on outlook on the reasons for purchase reveals that 42 per cent of the consumers are in the category of first time purchase, with only six per cent leaving their purchase for festival season.

On durable finance, i.e., saving versus loans — the survey states that rural dependence on loans for durables purchase is very low. States Ms Gumber, "the factors for this could be either ignorance of loan availability or an inherent discomfort with loans for `luxuries'. Our survey reveals that while 88 per cent spend their savings, only 12 per cent go for loans. Interestingly, these loans are hand loans from their local lenders."

Mr R. Zutshi, Director Samsung India Electronics Ltd, said "across our product ranges, maintaining the same quality as in the urban market, Samsung offers the product that the rural consumer wants. In fact, we are tying up with smaller players for making consumer finance easily available in the semi-urban market." Says Mr Anil Arora, Head of Marketing, LG Electronics India Pvt Ltd, "the rural consumer, what ever he buys, wants to invest in a good product. Rather than lowering our prices, we have introduced economy range of our products for this segment."

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