Country roads

‘‘From the way the markets have moved in the past 12 to 15 months, it is quite clear we will have to shift focus to smaller towns,’’ he says. The main reason: Urban markets today are not looking at fresh purchases during the festive season; they are buying throughout the year.

The problem with urban markets is a peaking saturation level. A ‘purchase’ here is more on-the-spot. And this is bothering consumer durable companies who would otherwise be looking at a healthy hike in demand from October to January, the time when a firm can achieve nearly 45 per cent of its annual sales and when ad spends could go up by as much as 25 per cent.

Back to basics

So, one way out is to head out into the countryside. ‘‘We expect fresh demand to come from the rural and semi-urban market this season,’’ admits Girish V Rao, head (sales), LG Electronics India. According to Rao, rural sales can add anything between five and ten per cent to festive season sales.

The difference may look wafer-thin but given the pressures on margins, even a small hike in sales thanks to SEC B and C towns can make a lot of difference.

‘‘The rural markets in the past few years has seen a steady increase in share. For example, 60 per cent of colour television sales are coming from non-urban areas,’’ says Suresh Khanna, the Consumer Electronics and TV Manufacturers’ Association (CETMA) secretary general.

Village voice

As their share in the market grows, corporates are also shedding their largely urban approach to retail network expansion. KSA Technopak, a leading retail consultant firm, for instance, has plans to utilise the experience of existing local retailers in rural and semi-urban locations.

‘We have decided to tie-up with local distributors in smaller towns and cities. They have the local know-how and can take our products to every nook and corner, which we may not be able to with our largely urban-based distribution network,’’ says Ghatak.

‘‘Hiring is a clear indication of what is happening in the market,’’ points out E Balajie, executive director (staffing solutions), MaFoi Management Consultants. ‘‘Consumer durable firms are hiring with a rural focus and prefer people familiar with the territory. Most of it is happening in the front-line sales and marketing areas,’’ says Balajie.

According to LG’s Rao, the company has increased the number of its remote-area officers and is looking at the move to pay off.

After three years of doing the groundwork, companies are confident that the future will bring them good cheer.