Opportunities for online shopping companies in Indian rural markets

By Sana Anand and Priya Chetty on December 23, 2021

With the increasing competition in the urban and developed markets, businesses have started tapping the growth opportunities in India’s rural markets. There are many digital schemes and efforts made by the government of India to provide internet access to a larger number of people, especially in the rural sector. There is also a considerable increase in the Indian e-commerce sector with more digitization and people engagement in online shopping. This article aims to explore the opportunities for online shopping businesses in the Indian rural markets. Firstly, it talks about common perspectives and attitudes of customers in rural areas, and then the opportunities and future of online e-commerce companies in rural India. Analysis of buying behaviour, trends, cultures, and habits will help in understanding how promising the rural consumer target market can be.

The growing internet user advantage in Indian rural markets

According to the Internet and Mobile Association of India report, an increase of 13% in the number of internet users was seen in rural areas in 2020. The national and local governments played a huge role in providing mobile and internet facilities at economical rates and even free under the developmental schemes. Now, with lesser transport and accommodation costs in the rural regions, many families have an adequate amount of disposable income in hand to spend. According to Shrivastava, Sahu, and Siddiqui (2018), the real income of rural households consisting of 6,38,596 villages increased from 2.8 to 3.6% in 2018. Some of the consumer perspectives and buying behaviours depending on the price, variety of commodity, brand and the trustworthiness of online shopping platforms have also improved.

Promotions to lure the rural consumer

Product pricing stands to be the authoritative factor in motivating purchases among rural buyers. They tend to compare different alternatives and go for the products that are economical. E-commerce giants like Amazon and Flipkart often provide products at cheaper rates in an attempt to attract this consumer segment. These are the two most preferred platforms for online shopping (Amrutrao, 2019). Other influential factors like the availability of a wider range and variety of products to choose from and time-saving facilities in the website or app, respectively (Samuel and Janardhanan, 2016). Ecommerce companies stand a good chance in all of these factors as consumers can access numerous products on the same platform and in very little time. Especially for necessity products like groceries or medicines, timely home delivery services also attract a large number of consumers in rural areas. There is also a rising aspiration among the rural people to purchase and own branded products and facilities (Shrivastava, Sahu and Siddiqui, 2018). Some of them also like to own products that are rare and not available easily in their rural markets. However, consumers look for economical products. Major online shopping companies are well aware of this buying behaviour and therefore, provide a large number of products from popular brands at discounted rates. Frequent festive sales, discount offers, and so forth also play a major role in their promotional activities.

Lack of trust plays a deterrent in online shopping behaviour of the rural consumers

Another very important negative perspective of the Indian rural consumers was the lack of trust in using online transaction instruments due to the risk of fraud and payment errors. Recent online sale trends suggest a shift with the inclusion of Cash on Delivery, EMI, return and exchange, user pictures and reviews. Consumers, both from rural and urban backgrounds have a positive attitude towards companies having more online visibility and a good reputation among the buyers. Online shopping companies offering 24/7 customer service availability and easily available information about the company gain more trust than the ones that lack transparency. Family and friend referrals and electronic word-of-mouth have a strong influence on online purchasing decisions (Sulthana and Vasantha, 2019). A considerable section of the rural population is illiterate towards the new technologies and methods. Online shopping companies have tried to make a user-friendly website and app interface with language translations to ease the process. There is a positive relationship between education, income level of consumers and their perspective towards online shopping (Bhatt, 2019).

Changing trends in recent years among consumers from the Indian rural markets

Changing consumption patterns can be noticed among rural consumers in the past few years. During the Covid pandemic, an even larger number of people have been spending time on the internet and engaging in online shopping. Taking into consideration the perspectives and trends of rural consumers, and the complexities in their behaviour. E-commerce companies should enhance their user experience and buying process. Online shopping platforms often appeal to the rural people known for providing “high-standard” items. In several cases, online companies drive high engagement and sales by giving a personal touch or unique offer to their customers (Amrutrao, 2019). For instance, as common knowledge, India is very rich in culture and by keeping a customer-centric approach like offering special discounts and sales for in-demand products during a particular festive season, companies earn a large share of customer purchases.

Role of the government in boosting online shopping in Indian rural markets

The support of the government plays a crucial role in this as the development of transportation, communication, and credit facilities are the key factors that encourage online shopping. By providing better customer experiences and empowering consumers by spreading awareness about consumer rights provide the scope and opportunities for online shopping companies to even reach a larger group of consumers (Kumar et al., 2018).

In the near future, the e-commerce sector will be a key player in reforming the rural shopping segment by employing a bigger infrastructure and strategies to promptly deliver and resolve after-sales issues. The shift in demand for products with changing trends also impacts the choice of platforms. With the right marketing mix and well-planned strategies, online shopping companies have a great opportunity to penetrate the Indian rural markets.

References

  • Amrutrao, S., 2019. Study the Consumer Behavior of rural area consumers while purchasing online. Journal of Emerging Technologies and Innovative Research, 6(11).
  • Bhatt, S., 2019. An empirical analysis of online shopping behavior in India: a demographic perspective. Asia-Pacific Management Accounting Journal, 14(3), pp.181-202.
  • Kumar, N., Anusara, J., Hossin, M.A., Sarkar, M.K., Chanthamith, B., Shah, S. and Russel, M.I.H., 2018. Challenges and Opportunities of E-Commerce in India: Pathway for Sustainable E-Commerce. International Journal of Engineering Business Management, 2(2).
  • Samuel, F. and Janardhanan, K., 2016. Online shopping – a strategy need for rural customer. Journal of Chemical and Pharmaceutical Sciences, 9(4).
  • Shrivastava, R., Sahu, R.K. and Siddiqui, I.N., 2018, February. Indian ruralmarket: Opportunities and challenges. In proceedings ofnational conference of innovative solutions for rural developmentof Chhattisgarh (pp. 23-24).
  • Sulthana, A.N. and Vasantha, S., 2019. Influence of electronic word of mouth eWOM on purchase intention. International Journal of Scientific & Technology Research, 8(10), pp.1-5.
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