10 faces of South Asia’s Rural Consumer

The rural consumption opportunity (including the non-metro towns) has been a common topic of discussion in several investor conferences in India recently. However, one is largely dependent on literature written from the financial centres, with limited primary visits into the hinterland.

This limits the content’s practicality, given the heterogeneous rural landscape. Moreover, the standard demographic approach to segment rural consumers may be misleading, since their behaviour is impacted by several realities, not just demographics.

Why they buy as they do, and how they behave when it comes to buying, are questions that on-the-ground observations can help understand better. Using my own experiences from visits made into the interiors of Bangladesh and India (Uttar Pradesh, Punjab, Gujarat, Tamil Nadu, Himachal Pradesh, J&K, Kerala, etc), I have my own understanding of local people in these places, and I feel the 10 segments below may be useful to categorize the rural consumers across heterogeneous regions.

Each category has money to spend. Buyer progression from basics to comforts to excesses depends on how much their incomes can support, the reduction in disposable income as their expenses for homes, education and medicines increases, whose income is the buyer dependent on, whether income is agrarian-dependant (even if indirectly), and whether rural buyers are imitating urban buyers.

In short, the 10 categories of rural consumers in South Asia are:

  1. New Money
  2. Entrepreneurial
  3. Migrants
  4. Climbers
  5. Influencers
  6. Workers
  7. Aspirational-Earning
  8. Aspirational-Dependant
  9. Elite
  10. Idle

Below is an in-depth look at each of these categories:

New Money

These people are best for one-time large ticket expenditures, like automobiles, etc. A common source of New Money is from the sale of ancestral land for infrastructure/factory projects, which is a windfall the family got without working for it themselves. Most new-monies prefer products which have a “flashy” perception, that create a “wow” image of them in the community.

“Word-of-mouth” marketing from people known to them in their neck of the woods often works better than marketing campaigns. That is because personal comparisons within their communities, a wish to follow those they look up to, and a desire to beat those they cannot stand, are often part of ego-based decisions.

However, their ability to become repeat buyers is limited, since the windfall was a one-off. Importantly, most of them do not want to do the work their earlier generations did, as they see it as “below their status”. But equally, most have not acquired new skills which can gainfully employ them in future.

Their purchasing power in future may be constrained, since they are not capable of earning regular incomes. Hence, one has to constantly acquire new clients, rather than depend on repeat sales from existing clientele. That is why the objective should be to utilize their one-time windfall gain into a large-ticket, one-time purchase.

They may physically try out the product before buying to see how it looks on them. That means an offline presence near that area is still necessary to complete the buying process.

I have seen several houses near Expressway projects, like in Jhajjar, Dharuhera or Bahadurgarh (Haryana), which sport new, flashy SUVs. I once spoke with a local near Sikar (Rajasthan) who told me a local proverb to describe “new money” people: “people used to eating simple lentil-rice for centuries get a stomach upset when they suddenly eat rich mutton curry”.


This stems from my own experience with Bangladesh’s Grameen Bank. Microfinance is creating incomes and purchasing power where traditional jobs were scarce.

People are cautious in their spending habits, since loan repayment is in their own interest. Their hunt for value for money while buying is in line with the way they manage their own small businesses.

They are willing to invest the effort to hunt for the “best value” option, rather than just buy what is available for the sake of speed. I visited the home of a borrower couple in Narayanganj (Bangladesh) who had a conch-shell bangle business.

While renovating their roof into “pukka”, they invested the time to visit several “raj-mistiris” (senior masons) in nearby villages to identify the best deal, instead of hiring the sole mistiri in their own village, who may have done shoddy work at a higher price.

Products that typically address an unmet need or add a benefit to their existent way of life are often in demand. Most entrepreneurs who are not part of microfinance loans also show similar traits, since capital to do a business is always precious and dear.

Businesses cannot afford to ignore this segment, since their entrepreneurial activity is creating purchasing power on a recurring basis, which means increased scope for repeat purchases. Products that see repeat-purchases stand to gain.

Businesses must pitch their product’s benefits and utilities, and be prepared for a longer gestation for sales conversion as the buyer window-shops.

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They send chunky remittances, which creates purchasing power in their home-region despite no economic activity occurring in that place. The products demanded depend on the quantum of remittance. I have seen this difference between places in Kerala and Uttar Pradesh.

In Thekkady, Kumarakum or Kottayam (Kerala), male members working in the Gulf send large remittances once or twice a year, typically just before they come home on annual holiday. The families spend on large-ticket items like house-construction/renovation or even college education.

As the patriarch was often coming home on holiday at that time, he could oversee any construction work, thus ensuring the demand for products actually occurred then, instead of getting delayed. Also, the next generation in Kerala can become high-earners, since they are able to afford going to colleges and acquiring skills.

Products relevant to those economic strata can be sold there in future. In Faizabad and Azamgarh (eastern Uttar Pradesh), the migrants are mainly working in Indian cities like Mumbai or Ahmedabad, where their wages were lower than Gulf. Hence, their remittance is used for small-ticket spending, like painting or simple renovation.

Since they are unable to afford large-ticket spending like college, they will remain low on skills and may only work in lower-paying jobs. Hence, only products relevant to their strata can be sold.

In Hathras or Mathura (western Uttar Pradesh), quite a few local youth were taking up basic jobs like accountants in the Gulf after graduating from Agra/Lucknow universities. Hence, they are now reaching a calibre where they can afford larger additions to their houses, and are investing in small-sized flats.

This indicates the market in western Uttar Pradesh may expand as the quantum of remittances increases further, and demand will move from necessities to aspirations.


They are salaried employees, who want to improve their existing way of life with what is “doable”, and then steadily progress to discretionaries. Their focus is not on excesses, it’s rather on necessity comforts. Wives play a key role, as they steadily coax the husbands to purchase practical products, which address their realities.

Businesses also have to consider the specific situations these people face in their daily working lives, as it impacts their ability to shop. While the desire is there, the convenience may not be.

In Barasat, Kalyani or Krishnanagar (West Bengal), many people commute to Kolkata daily for work as jobs grew there. Earlier, most used to wait for local government job exams and took tuitions in the interim.

While they do get salaries now, they do not have any time for regular shopping, given the commuting time. Investing into mobile sites for the products may leverage their commuting time for the shopping experience, rather than only investing in physical stores.

At this juncture, it is important to note how rural people specifically use technology. While many talk of how “e-wallets” can revolutionize the payment process, there is a limitation due to low English literacy. Rural people are not averse to technology, but they are often low on English literacy.

Older monied people are often less literate, while the younger literates have no income. “They have tech-comfort, but not text-comfort” is an apt description. However, money is about trust, and trust can overcome literacy challenges. Creating trust by using people who are tech-smart and well-known locally as intermediaries can open up e-commerce, until the locals develop the comfort of using the technology.


They are typically the ones who hold power in chauvinistic village communities, like village chiefs, village elders, rich land-owners, local politicians, or even husbands.

Influencers may not be the direct-customers for that business, but they have the power to prevent the consumer from buying the product. Hence, it is critical to win them over through steady engagement to make them see the benefits the business can bring.

This engagement can take time, hence a lot of gestation is needed before the first outlet is set up. It may often mean using psychological tactics to make them see the rationale.

In conservative villages, there are two challenges a business like microfinance would face. Since it largely lends to women, one has to win over the husbands, who become insecure as wives become economically independent.

Also, many conservative villages are controlled by powerful elites who fear that socio-economic prosperity of the common people would reduce their own hold. The husbands hold influence inside the house, and the powerful elite hold influence outside.

A Grameen Bank officer I met in Narsinghdi village (Bangladesh) said they talk with husbands for months before opening a branch. They use psychological tactics like asking husbands why they should only bear the burden alone for the entire household, and saying that their wives should also share their burden.

This appeals to the chauvinistic male ego, and he thinks of his wife as sharing his burden rather than becoming economically independent. Once husbands are won over, they can indirectly influence local elites, since many husbands may be connected with those circles.


They are similar to migrants, except they work in the home-region itself, an indicator of which could be the regional development plans of the state governments.

Workers are not landed class typically, and may not even rank high on skills. This impacts their purchasing power. They would be an opportunity for low-ticket/high-frequency products that help improve their lives.

Workers may also sound similar to Climbers. But the main difference is that Climbers foresee an improvement in their incomes and hence, a steady uptick in the profile of their purchases, while Workers may not see such high growth in incomes due to lower skill sets.

In Hazira (Gujarat), I interacted with locals who were looking for work in the region’s industrial projects, and many were for blue-collared jobs or lower-end white-collar jobs.

These jobs would improve their incomes undoubtedly, but the growth in incomes might be flatter. Importantly, many workers will make their buying decision based on the routine of their work, even if they have the income and the desire. People working in wholesale markets who start early in the morning, by 4-5AM, will still buy a dwelling near that area, even if it is higher priced.

Aspirational-Dependant and Aspirational-Earning

These categories are self-explanatory. While media and connectivity have raised the awareness of and aspirations for new products in the hinterland, the ability to pay for them is not always in the hand of that consumer. Hence, it is critical to understand where the money to pay for it comes from.

Targeting the source of the money in case of aspirational-dependants, rather than targeting just the end-consumer, may hasten the conversion to buy. So there are two levels that have to be won over. The process is simpler in the case of aspirational-earning, since the same person is paying.

The difference between aspirational and other categories like workers/migrants is in the profile of purchases. Aspirational ranks high on discretionary scale. Necessities rank lower on the discretionary scale, which is what the other categories look at. One looks to make lives comfortable, while the other looks to make lives exotic.

While travelling from Batala to Gurdaspur (Punjab), I interacted with a mother-daughter duo. Mother worked in a shawl factory, and was keen to get her teenage daughter into a vocational college. This aspiration would have been unheard of earlier. But it is in her thoughts now, as she can afford it due to her good job.

The daughter, however, was more interested in the latest Western-clothes brands that she had seen girls wearing in Amritsar city. This was an aspiration for her. However, she had no money to pay for that aspiration, and was constantly pushing her mother to visit Amritsar to buy them.

Thus, both aspirational-earning and aspirational-dependant were living in the same house. The Western clothes brand cannot hope to convert a sale by just winning over the daughter. It also needs to win over the mother.


The local monied people belong to this category. They are mostly the land owners or local business owners. They have experience in shopping, including for high-end items. Flashy sales pitches may not work on them as easily as they did on new-money consumers who were buying big for the first time.

Elites also have the resources to visit nearby large towns to examine the products themselves before buying. This means the need to set up physical stores in close proximity, with the full works in place.

I met locals in Kasauli and Chamba (Himachal Pradesh) who owned fruit orchards and minted money from annual harvests. They had the purchasing power of any urban rich, along with the shopping experience of knowing what is good. Businesses cannot hoodwink them with flashy adverts.


This category comprises a large portion. These are not just those who are jobless or lack the will to work. It also includes people working under “disguised unemployment”, who often get less than fair wages.

While wage regulations and national employment schemes are reducing disguised unemployment, it still exists in some places, albeit under covers. The Idle have a lot of time at their disposal, but the lack of income constraints their purchasing ability, hence they are confirmed window shoppers.

Still, while window-shoppers are not direct consumers for the business, they can be invaluable “indirect salespeople”. They can experience the product first-hand and, in turn, advocate it strongly to people they know, who can then be induced to buy it.

Businesses can even use them as an “eye-opener”, to identify areas of gaps and improvement in their product, since the Idle often spends a lot of time to check out the product, asking questions and making comparisons.

By Sourajit Aiyer

Originally published here – http://www.marketmoving.info/the-10-faces-of-south-asias-rural-consumer/

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