Apparently, the world is the new village. Thanks to the internet.
Today, however, we’re talking about the real villages of emerging economies. The ones that until recently had more power cuts than uninterrupted electricity. But that’s all changed. Internet connectivity is reaching the hinterlands and bringing rural consumers on par with the urban ones.
In current times, rural markets are the fastest-growing markets in emerging economies. They have been beating the consumption rates of urban areas consistently for the last few years. It’s especially evident in the growing economies of India, Africa and China.
None know about it better than CPG businesses. Early entrants in rural markets have capitalised on the lack of competition. They have built their reach by clustering smaller villages and customising their distribution strategies to the population density, creating a solid base of local partners and enabling deep engagement with community leaders.
Today, more and more brands are cashing into the phenomenon of the upwardly mobile rural consumer. They are focusing on expanding their market reach in rural markets and quickly. For them, technology is the biggest differentiating factor. Take the case of Godrej Consumer Products (GCPL), a Bizom customer. It recently announced its GTM transformation to “increase its overall distribution footprint to 1.5 million direct coverage outlets, from 1.2 million, and enhance indirect coverage to 7 million from 6 million in 2-3 years.” GCPL is leveraging emerging channels and using technology as a key differentiator to “stay ahead of the curve as changes disrupt the GTM ecosystem.”
Technology enables brands to execute remote retail execution with various tools and, most importantly, by providing access to data and intelligence. CPG brands use mobility solutions and geospatial tech to empower field teams, channel partners and their distribution strategies to expand their market reach.
Along with increased spending power, rural consumers have access to vastly improved digital infrastructure. The cost of data has also dropped significantly from ₹ 152/GB in 2016 to ₹ 10/GB in 2019. These technological and socioeconomic changes have made it easier for brands to reach the rural consumer faster and more efficiently.
There are many technology-powered market hacks that mid-sized and emerging CPG brands can learn from more established brands to reach their market expansion goals.
- Mobile DMS to empower local distributors: Brands have to find cost-efficient means to increase their network of distributors or sub-stockists to ensure their products reach rural consumers. One way to do this is to create applications that are easily accessible on even non-smartphones. Such apps automate the purchase to payment and order lifecycle.
The tech should also factor in regions of poor or low internet connectivity. How can distributors or field sales continue to use the brand’s tech in such instances? Bizom mobile DMS, for example, enables field personnel to use the DMS app even in low or no connectivity zones. They later sync the data and upload it to the company’s cloud system when back in connected zones. We found significant success by doing this for Reckitt in the rural markets of Egypt.
- Customer self-service: In sparsely populated areas (5,000 to 10,000 people), brands should enable retailers to send their orders directly to the brand. ITC Ltd., the multinational conglomerate, bypasses distributors to service retailers directly in such villages.
It’s mobile technology or retailer apps that make it easy for retailers to select the right SKUs for their customers and send their orders directly to brands. Brands, in turn, gain access to valuable demand data for rural markets and can ensure the availability of their products by doing just-in-time order fulfilment. Consequently, they provide best-in-class service to retailers who reward the brand with positive feedback and word-of-mouth marketing.
- Geospatial retail intelligence: Geospatial augmented retail intelligence tools can help brands create micro-segments or cluster villages to analyse the business potential and brand presence. Such tools can provide heat maps of existing business zones and help brands direct their teams to areas with the maximum potential for acquiring retailers. The biggest advantage of such tools is that it enables the brands to invest in the regions that offer the biggest RoI.
- Increasing Retailer Visibility: Brands are expanding their portfolios and are customising them specifically for local tastes. They are innovating with low-unit packs and trade promotions. The challenge, however, is in providing visibility to retailers in rural markets into SKU range and trade promotions.
Retailer applications can address these challenges by connecting retailers directly to the brands. When brands list their customised portfolios in the app, retailers can gain access to the entire range rather than rely solely on the recommendations of the local distributors or sub-stockists.
Brands in emerging economies have multiple challenges in monitoring the efficacy of their trade promotions. Do retailers know about the latest trade promotions? Are promo benefits reaching retailers? Are claims processed in time? A retailer app can solve these snags by opening up channels directly between retailers and brands. Brands can directly process retailer claims instead of routing them through distributors, saving time and resources and offering best-in-class service to retailers.
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