1. Penetrating Rural Markets through Village Haats By SagarKundu Rohit Kumar

2. Table of Contents Introduction Rural India’s Traditional Haats The Big Picture Advantages Few Companies Initiatives Conclusion References

3. Introduction The Indian rural haats were from ancient times. From barter system to modern transaction methods, every change were adopted by these haats. Though traditional, these Indian avatars of hypermarkets promise to drive marketing plans of companies as they eye the emerging rural market, accounting for over two-thirds of India's population, 56% of income, 64% of expenditure and 33% of savings

4. Though the Rs 50,000-crore sales that these weekly rural bazaars collectively generate every year may just be a fraction (under 3%) of all rural private consumption expenditure (Rs 20 lakhcrore), their importance in rural life goes beyond sales Almost every villager is a regular haat visitor, with over three-fourths visiting one every week. And two in every five visitors here are women. With the average distance between a haat and the nearest big town at 24 km (16 km in case of the most urbanised state in Tamil Nadu), these haats double up a shopping-cum-outing opportunity for millions of entertainment-starved rural Indians

5. RURAL INDIA'S TRADITIONAL HAATS Rs 50,000 crore annual sales n Out of total footfalls around two-fifth are women Large haat, in a 10,000+ village, caters to 57 villages attracts 12,000 visitors daily Small haat, in a 5,000+ village, caters to 21 villages, average footfall of 5,600 a day 545 stalls appear in a large haat while around 327 stalls are set up in a small haat

6. 98% rural people are regular visitors to haats 75% visit any particular haat almost every week Three-fifth come to buy specific products from haats despite the fact that similar products are available in their villages A buyer spends Rs 40 on purchase of FMCG products in a single haat day. It nears Rs 60 in UP and Maharashtra while is comparatively lower at Rs 22 in Orissa and AP

7. The Big Picture Location Of Haats 5% 52% Temple Market Place 35% 8% Bus Stop Others Source:RMAI

8. States with max Haats Uttar Pradesh 10,380 Bihar 4,993 West Bengal 4,078 Jharkhand 3,996 Maharashtra 3,758 Stalls in Haats(in percent) Source:RMAI

9. Brand awareness for specific FMCG products sold at haats (%) Source:RMAI

10. FMCG products preferred at haats (%) Source:RMAI

11. Sale of FMCG products per outlet on a haat day (Rs)

12. Average number of visitors in a haat

13. Source of purchase of branded FMCG for haat sellers

15. Advantages Brands rarely vie for attention because a shop in a rural area usually wouldn't have place for too many SKUs (stock-keeping units) They can build a strong rural base without much advertising support (like Chik and Ghadi, the shampoo and detergent brands). This could be due to product design and benefits as well as due to self-sustaining distribution/marketing models Expensive brands too can do well - contrary to popular belief, rural consumers believe in value for money and do not buy cheap products (Close up toothpaste, Marie and Tiger biscuits and Clinic shampoo are doing well due to deep distribution)

16. Disposable surplus is not low in rural markets because the people there don't usually pay rent or spend much on food as grain and vegetables are from their own fields/homes. The number of middle-class households (those having annual income of Rs 45,000-2.15 lakh) are almost equal at 15.6 million in rural areas and 16.4 million in urban areas. Another opportunity lies in making effective use of the infrastructure: 3.8 lakh public distribution shops, 1.38 lakh post offices, 42,000 haats, 32,000 bank branches, 25,000 melas (exhibitions) and 7,000 mandis (agricultural markets) Large-format rural retail stores such as DSCL Hariyali, as well as IT initiatives like ITC"s e-choupal will help make inroads into rural markets

17. Few Companies Taking IntiativesMedimix Focused brand-building initiatives—like participation at community events such as “melas” (village fairs),“haats” (markets), street theater, van campaigns, and puppet shows—generate positive word-of-mouth and influence buying decisions. Medimix,” campaigned in mobile vans to promote its brand and give out product samples

18. Colgate Distributed free sample and toothbrushes at these haats for awareness of oral health Taken initiatives to circumvent the limitation in communication channels by innovatively leveraging non conventional media. Wall paintings cinema vans weekly markets haat fairs and festivals Promote the product as a substitute for neem twigs, salt , charcoal etc in rural belt

19. Dabur In villages promote its hair oil as a substitute for mustard oil which village folks generally used. In rural UP & Bihar With SwasthyaChetnaAbhiyan project for DaburChyawanprash Health camps set up for these haats so that health benefits are told to the customers coming there

20. Sonata Sonata launched project Swades, aimed at changing people's mindsets and making them aware of the value of time in rural India Sonata watches were also displayed at local melas (fairs) and haats(markets) Gaily decorated mobile vans travelled around villages to generate interest To customers, in the 20-to-35 year age group Sonata is talking to banks for micro financing, so that more people can afford to buy watch

21. Conclusion The haat system demonstrates the Indian ingenuity of keeping product prices low. No high shop rentals, salesmen salaries or investment in display shelves and shop interiors. The fee for putting up a stall is a ridiculous Rs 5, whether you are a poor woman selling vegetables or a multinational selling consumer goods. More focus should be on better infrastructure on these haats like electricity, sheds etc. Companies will directly communicate to the huge rural masses with very less advertisement cost and their products are directly sold without much intermediaries . As income of rural people increase demand for branded goods will also increase rapidly

22. References www.rmai.in www.nextbillion.net/news/the-great-rural-goldrush www.tata.com/company/Articles www.indicus.net/media/index.php/newspaper/1559-a-slice-of-life-in-peri-urban-india www.financialexpress.com/news/rural-supermarkets www.colgate.co.in www.dabur.com www.cholayil.com/medimix-ayurvedic-soap.aspx