Rural households may step up spending
PremiumEstimates by Kantar and GroupM suggest that average monthly household income in rural India increased marginally between July 2021 and December 2021 driven by several government schemes
NEW DELHI : Rural households could spend more on home construction and improvement services over the next six months and buy more smartphones and two-wheelers, Kantar and GroupM Dialogue Factory said in their Rural Barometer Report released on Thursday. However, the report cautioned that households in India’s villages continue to report anxiety around job security and physical health of their children.
The findings are part of a study done by data analytics firm Kantar and Dialogue Factory, GroupM’s rural and experiential marketing arm.
This is the third such study conducted by the two jointly to monitor post-pandemic impact on consumer behaviour across rural India. The survey for the study was conducted in December 2021. In all 3,729 rural adults were surveyed across 12 Indian states.
Estimates by Kantar and GroupM suggest that average monthly household income in rural India increased marginally between July 2021 and December 2021 driven by several government schemes. “The positive impact of direct benefit transfer schemes such as enhanced NREGA wage rates, PM Kisan, free foodgrains programme, and Pradhan Mantri Awaas Yojana (Gramin) coupled with a good kharif crop, on rural savings and consequent spends on big-ticket items such as smart phones, electrical fittings, construction, and insurance has been robust," the report said.
This has taken care of basic consumption requirements of rural households, leaving them with more money to spend on other goods, said Puneet Avasthi, senior director, specialist businesses, insights division, Kantar. “With an increased surplus income, rural India has prioritized connectivity and construction for future purchases. The smartphone category will continue to grow in rural markets. Additionally, spending on home construction and improvement and two-wheeler purchases is likely to grow in the next six months. With construction-related activities showing higher prioritization in both the last six months and the next six months, consumption of cement and steel should remain strong in rural India," the report said.
“The pandemic has changed ways of living for rural India. We see our rural citizens more vigilant about their consumption patterns," said Dalveer Singh, head of experiential marketing, APAC, Dialogue Factory. Rural purchasing power has improved because of government intervention, Singh said.
For starters, packaged consumer goods firms have seen the resurgence of indulgence and vanity categories. Through the lockdown and first half of 2021, consumers prioritized health and hygiene categories under uncertain financial circumstances. As a result, indulgence and vanity categories remained subdued. The report shows a rebalancing of packaged goods spends, with food categories such as biscuits and chocolates, snacks, personal care, and beauty categories bouncing back and showing positive momentum for growth.
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That’s not all. The Rural Barometer shows a three-fold growth in the use of e-commerce apps in the last 6-8 months. Digital financial inclusion continues to see a growing footprint and payment apps especially have created a fertile ground for the advancement of e-commerce in the rural hinterland.
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