Mumbai, April 28: This is final proof that rural India is going to town.
The measure of the Indian marketplace is changing, prompted by the new splurge-power of the Indian rural market.
The Indian Readership Survey (IRS), an annual study of the consumption of various media, today launched an index for market measurement, called Household Premiumness Index (HPI).
The new index does not claim to aim at replacing the age-old SEC (Socio-Economic Classification), the unit of household measurement 'universally' accepted in the Indian market and says it is a necessary update on SEC. But while the SEC categories divide the entire country's households into two series of alphabets for the urban and rural and ignores the purchasing power of the rural market, HPI came into being to announce that the great urban-rural divide is over.
It is no surprise, given the way villages and small towns are spending. 'Two out of every three new television sets bought between 1998 and 2005 were in rural India,' said Ravi Kiran, managing director, India-West and South, Starcom, in his presentation at the launch.
He added that the rural market was the driver for several categories. Rural share of consumer durables is very high. From 1998 to 2005, the number of television households went up by 28.1, with rural India contributing 64 per cent of the growth.
The number of households that bought pressure cookers went up by 22.6, with 54 per cent of the growth coming from rural India. If TV sets and pressure cookers aren't unlikely, in the seven-year period, India has added 1.2 new households with cars, with 24 per cent of the growth coming from its interior.
Only refrigerators and washing machines seem to have met with bad luck in villages.
In packaged goods, 76 per cent of the growth in the hair oil category and 68 per cent growth in shampoo brands was from rural India. In aerated drinks, 54 per cent of growth came from the interior. The ice cream category was not far behind ' rural markets contributed 42 per cent of the growth.
In another strong proof of the vanishing line between the rural and the urban, both markets were seen to show equal lack of respect to a great Indian institution ' hair oil. While 46 per cent households used hair oil daily in 1998, the figure has come down to 37 per cent this year. The hair oil's loss is shampoo's gain ' its use has gone up across urban and rural markets alike. 'Sachets continue to drive the shampoo penetration. The rural share is 58 per cent, up from 47 per cent in 1998,' said Kiran.
He stressed that there are several other factors chiming in good news for brands: more educated homemakers, chief wage earners earning more, education levels growing, joint families shrinking (resulting in more TV households) and increasing full-time employment, but placed the rural spending power on top of the list.
The market has reached where literacy hasn't.