CONSUMERISM –
RURAL VS. URBAN


India’s economic growth has accelerated swiftly in the last two decades and so has the purchasing power of its population. Global companies view India as one of the potential markets from where growth in future is likely to surface. A recent study by the McKinsey Global Institute (MGI) suggests that if India continues to grow at the current pace, average household incomes will triple over the next two decades, making the country the world’s fifth-largest consumer economy by 2025, up from the current 12th position.

The consumer sector in India is broadly segregated into urban and rural markets. The sector is divided on the basis of people’s income, class, standard of living and geographical boundaries. The consumption pattern of the population depends on their disposable income and whether they are situated in rural parts of the country or urban. With the ongoing pace of growth and development, these boundaries and segregations will soon cease to exist.



We live in an era where we buy goods, use them and throw them away when they get damaged; there is no question of repairing. The incomes are high and people can afford to buy new things every now and then. The growing income and rising influence of the social media has enabled consumers to binge on good things irrespective of their prices. The Indian consumer sector has grown at an annual rate of 5.7 per cent between FY 2005 to FY 2015.

A stronger rural India with increasing consumerism is also inciting demand for products and services. Nearly 70% of India’s population lives in villages, the population of these rural areas is becoming quality conscious and thus the rural market is emerging. Also the increase in rate of literacy in rural areas has led to employment opportunities and hence higher incomes. The retail sector in these remote areas is becoming more organized and has become the second major occupation after agriculture.

A blend of consistent agro commodity prices, better irrigation facilities and greater involvement by the government in the agriculture sector has resulted in an increase in income of the farmers of rural India. Increased government involvement and better infrastructure has resulted in a meaningful impact on farmer’s income and thus rural consumption demand.

Another reason for increase in rate of consumption in rural India is the exposure of internet and social media. The rural population has got exposed to the standard of living of the urban population and has started expecting a similar lifestyle for themselves. The masses demand better quality products and money worthy services. Big companies are increasingly sculpting their strategies and brand marketing to influence consumer in rural areas. Hindustan Unilever aimed to empower rural women to make its products reach every rural home by training rural women as Shakti Ammas. Reportedly, the Shakti initiative delivers around 20 per cent of Unilever’s overall rural sales.

These days the differences between consumerism in rural and urban areas is low and the number of similarities is going up. The income of urban middle class families is going up and it reflects in their purchasing pattern. There has been an increase in the number of working ladies in the urban areas which results in the growth of family income. People believe in buying quality products and are ready to buy goods in plenty. Working women have a different way of shopping and want to buy everything together at just one place. They go to supermarkets and malls to fulfill all their needs and requirements at one place, unlike rural women who purchase different goods from different retailers.

With increasing number of working women and nuclear families, ladies in urban families do not get sufficient time to cook meals and so many urban households have developed a habit of munching on fast food and eating at restaurants and food plazas. Sunday visits to malls for shopping, watching movies, children’s play time at game zones, eating and leisure time has become a part of the routine for many urban families which results in increased rate of consumption. People in urban areas want bigger houses, they buy cars even when there is no parking space for those cars, big houses and luxurious cars have become status symbol more than needs.

Urban population is lately becoming very fond of online shopping and is highly indulging in it, mainly because it saves them time and energy. The largest categories of urban spending today are food, beverages, and tobacco (FB&T); transportation and housing. Smartphone market in urban locations is also on a rise. India is the second largest smartphone market in the world. Lately, rural population has also started contributing to the smartphone market in India.

Today, in spite of comparatively low incomes, rural consumers due to their majority share of the population altogether are India’s largest consumers—57 percent of current consumption is in rural areas versus 43 percent in cities. However, it is assumed that by 2025 the Indian consumer market will largely be an urban affair, with 62 percent of consumption in urban areas versus 38 percent in rural areas. Urban population will account for over two-thirds of the growth in the Indian market despite the fact that even in 2025; urban areas will have only 37 percent of the population.

In the coming years, it is expected that the rate of income of middle class will increase, not only urban but also rural middle class. With rapid increase in the number of millionaires, the market for luxury goods is growing annually at a growth rate of 32 percent. The robust increase in the population, where a major portion is in the age group of 25-35 years with stable incomes is the stimulant behind the dramatic rise in the consumer market.

The Indian consumer trend is moving towards bulk buying and living a luxurious lifestyle. The market trend is gradually changing from seller market to buyer market. Globalization has given foreign goods a new market in India, thereby increasing product variety and options for consumers. It is believed that the Indian consumer market will incite the growth of foreign based companies in the coming years. While most leading companies of the world are cutting costs in the US and Europe, they see India as a potential market for growth in future.


While global brands have already been marketing in Brazil ahead of Rio Olympics, the activity in the UK kicked off 100 days before the opening ceremony. Visa, Olympic partner since 1986, significantly moved up its advertising schedule releasing ads in June. Many famous brands have put in a lot of efforts and started brand campaigns linking them to the Olympics. Coca-Cola’s #That’sGold moment campaign has announced hurdling sensation and Olympic medal hopeful Michelle Jenneke s #That’sGold ambassador in Australia to encourage Australians to share their #That’sGold moment. While, Nissan is seeking to bring fans close to Team GB and Paralympics GB with films that give fans the opportunity to experience first-hand the team’s intense training regime. The car brand which is also the official automotive partner of the British Olympic Association and British Paralympic Association is also offering sports fans a chance to win tickets to the Rio 2016 games.

Lacoste has launched a ‘support the style’ video that is designed to be a powerful showcase of the “spirit, style and elegance” of Lacoste. The clothing brand hired choreographers to direct the ad, which follows a troop of hard core supporters through Paris. Procter & Gamble (P&G) is admiring the emotional strength involved in motherhood in its 2016 Olympic campaign. The new ad, Strong, is a part of the FMCG giant’s 10 year sponsorship of both the Winter as well as Summer Games under the title ‘Thank You Mom’. The campaign started in the run in London 2012 and will continue up to Tokyo 2020. When most of the brands are engaged in campaigning how could Adidas be left behind. The shoe brand’s creative director Stella McCartney has designed the Team GB and Paralympics GB kit in her signature modern aesthetic design. The sportswear brand said that the lightweight, breathable synthetic fabric is on an average 10% lighter than 2012, which will help athletes go “further and faster”. Adidas Team GB replica apparel has been made available with the Adidas website and sports retailers since 1st May.

Another Olympic sponsor Panasonic is celebrating Britain’s army of ‘Superfans’ in its Rio 2016 campaign. The brand is calling UK sports lovers to show their support for the nation’s athletes on social media by sharing “fun and passionate, wild and wacky” photos with the hastag #superfans. Kellogg’s which is Team GB’s official sponsor has started a #GreatStarts campaign that recreates iconic Hollywood wake-up scenes from movies like Ferris Bueller’s Day Off featuring past British Olympic medal winners Sir Steve Redgrave, Rebecca Adlington and Louis Smith. The campaign activity includes a user generated content competition in which people will share their great starts for a chance to win a trip to Rio to see the Olympic Games. Some of the other campaigns are car Mini Cooper’s ‘Win Small Campaign’, McDonald’s also has started a contest named ‘Win When USA Wins Gold’ wherein when you purchase items that have under 400 calories you can win prizes, some as big as $25K and a trip to London. In this contest, an American athlete’s name appears on all food items that are less than 400 calories and if your Olympic athlete wins a gold medal, you win a prize. The ‘Take Part’ campaign by Samsung uses different apps and technologies to keep you up to date on everything that is happening during Olympics.

With so many brands taking active participation in campaigning and associating themselves with Olympics, Rio 2016 is certainly a golden opportunity for brands to take their identity to another level and create a fan base for themselves among a new target audience and reach larger masses. It is the right chance for them to showcase their creativity, uniqueness and innovation. Brands are taking full advantage of this and leaving no stone unmoved to stand out in the crowd and establish their individual identity.

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