Latest Rural Retailing - Corporate Examples

Rural Retailing

1. Module-6
Rural retailing

2. Emergence of organized retailing
•Organized retail outlet limited to metros
account for mere Rs.20,000 Crores
•Unorganized rural retail outlet account for
around Rs.40,000 Crores
•96% of 5 million outlets are smaller than
500 square feet in area
•India’s per capita retailing space –2
square feet (16 for US)

3. •Traditional rural retailers
–Haats, mobile traders& village shops
•New models
–SHG Tieup with HUL,
–SHG Tieup wiith ITC’s Choupal sagar
•All FMCG& Durables and Agri inputs
•Govt initiatives
–Public Distribution System (PDS)
–Khadi& Village Industries Commission (KVIC)
–Rural banks
–Indian Farmers Fertilizer Co-operative Society
(IFFCO)

4. •Other initiatives
–ITC first rural mall in MP
–DCM Shriram’s Hariyali Kisan Bazaars
–Escorts& Tata Chemicals: Tata Kisan Sansar
–Godrej group: Adhaar

5. Khadi& Village Industries Commission (KVIC)
•Statutory organization established in 1956 as per Act of
parliament
•Main objectives:
–Skill improvement
–Providing employment
–Transfer of technology
–Rural industrialization
–Promoting self-reliance
–Building strong rural base

6. –Getting artisans organized
–Getting credit from institutions
–Procurement& supply of raw materials
–Domestic marketing through retail showrooms and
–Export marketing, wherever possible
–Khadi Gram Udyog Bhavans
•Selling wide range of products: Honey, soaps, cloths, shoes
etc

7. –All India Handicrafts Board& State Handicrafts
Developments Corporations
•Cauvery of Karnataka
•Poompuhar of TN
•Lepakshi of AP
•Mruganayani of MP
•Gurjari of Gujarat
–State Handloom weaver co-operative
societies
•Co-optex of TN
•Priyadarshini of Karnataka
•Apco Fabrics of AP
•Weaver of Haryana etc

8. •Major functions of KVIC
•Planning, promotion, organization&
implementation of development programs
•Building up reserve for raw materials supply
•Training of artisans engaged in these industries
•Provision for facilities to promote of its products
•Responsible for promoting research
–Production techniques& equipments
–Use of non-conventional energy
•Financial& technical assistance to institutions&
individuals
•Ensure genuineness& standards of products
•Initiate studies& research on Khadi& village
industries

11. Drivers of organized retail format
•Economies of scale
–Multiple product categories& brand variants
•Quality of service
–Assistance in purchase decisions, delivery etc
•Increased brand consciousness
–80% of FMCG’s sold in rural are branded
•Fighting fakes
–Philips uses ITC Choupal to sell tubes

12. Organized retailing in Rural India
•Mahindra Shublabh Services Ltd (MSSL)
–Subsidiary of M&M
–Revolutionized Agri business
•Mahindra Krishi Vihar
•Complete range of products& services to improve
farms productivity
•Farming solution specific to crop, region& market
•Staff guidance to farmers
–Selection& usage of products; Environmental&
Human safety
•Offers flat form for banking institutions
–Min.Documentatin; Quick sanction; attractive
interest rates

13. •ITC Choupal Sagar
–1
st
rural mall in India with 7,000 sq.f area
–Self-service facility
–Sells all national brands: Marico, LG, Philips&
Everyday, TVS& Eicher
–Mall is located near ITC’s E-Choupal’s stock
point
–Partnered with other companies to sell other
brands

14. •Mahamaza
–Introduced in 2000
–is a virtual dealers network (2,75,000 dealers
in small towns)
–Extraordinary range of products: from Atlas
cycles to Nokia phones
–Deals with 28 brand across diff industries
–WSO (Web store owners)
•Offline network; registration fee –Rs.5000 each
•Scope for face to face interaction with customers
•Attractive discounts from participative companies