distribution channels in rurals

2. Introduction:
• There are 60 lakh outlets, both in urban
and rural markets.
• 36 lakh retail outlets are spread over six
lakh villages.
• The companies need substantial amount
of working capital and large dedicated
sales force.

3. Obstacles to reach the rural consumers
• The distribution chain requires a large number of
intermediaries and this increases the cost of distribution.
• Non-availability of dealers.
• Poor viability of retail outlets due to low business volume.
• In adequate banking facilities.
• Only about 80% of the markets are connected by roads.
• Interior village roads.
• Interior village roads get flooded during monsoon.
• Transport and communication facilities are generally poor
in villages.
• Credit requirement of channel members.

4. Why to increase distribution channel
in rural area ?
• As per RMAI retail study , the tendency to shop from
the nearby town city is high among consumers
residing within a 25-km periphery, or in villages close
to the highways.
• Whereas 80% of the finished goods are purchased
from the near by towns and cities.
• Therefore, marketers need to ensure product
availability at the right places to generate rural sales.

5. Traditional Methods
• Haats
• Melas
Branded products in Haats
Company stalls in Melas

6. • Mobile Trading
Own brand mobiles

7. Development of Retailers in
Rural Market
•
•
•
•
•
•
Co-operative Societies
Public Distribution System
Agricultural Input Dealers
Potential Villages
Feeder Markets/Mandis
Post Offices and Bank
Branches

8. The Emergence of Modern Retail In
Rural Areas
• ITC’s Choupal-Saagar,
• DSCL Hariyali Kisaan Bazaar

9. • Godrej Aadhaar
• Tata Kisan Sansar

10. • 3A Bazaar

11. CONCLUSION:
• The rural markets and the consumers are scattered
over a wide geographical area. Considering low
income of consumers, low density of population,
poor condition of roads, it becomes difficult and
uneconomical to individually service all the villages.
The marketers have to follow a selective approach,
based on market potential in developing a network
of distributors and retailers in rural markets.