From women's media to rural media

By M H Ahssan

Newsletters in UP that began as a development effort to help women communicate among themselves have evolved into much more, addressing problems that are relevant to whole communities instead.

Seven years ago, many rural newsletters started off as mere communication tools for the women self-help groups. Their purpose was to initiate a dialogue between the women, share information and also, give them an opportunity to voice their opinion. Hand written, hand designed, they were a perfect reflection of women's empowerment in rural Uttar Pradesh. But today, they have emerged as the voice of not just these groups, but also of the villages. Various rural newsletters of Uttar Pradesh not only carry reports of the groups, but also the problems of the villages, their issues and as a bonus, give a peek into the happenings around the world. Some are making their presence felt on the national scene too; Khabar Lehariya has even won the prestigious Chameli Devi Jain award.

The April 2004 issue of the rural newspaper Gunagar of Jaunpur talks about the life of Bhimrao Ambedkar, coinciding with his birth anniversary. The December 2004 issue of Mitra from Oraiyya tries to focus on the problem of the caste biases in the village primary school and even goes ahead to show the issue to the block development officials. The development officials record the copy as an official complaint and take action against the erring school teachers. Several other newsletters like the Purvai of Varanasi, Bhinsaar from Pratapgarh, Dehriya from Sitapur, Bhaiyli from Mathura, Mahila Dakiya (the very first one in the series) from Chitrakoot are also making their mark. Mahila Samakhya, a prominent NGO working for the education and empowerment in Uttar Pradesh, supports these. Nirantar, a support group from New Delhi, supports Khabar Lehariya from Chitrakoot. While some of them are quarterly, others are bi-annual and some are even monthly.

The matters in these newsletters range from local civic problems like conditions of the hand pumps and the kharanjas (brick roads), local social issues like dowry, intoxication, violence against women, and even murders and other crimes. Household tips, gardening tips and details of the latest research are the added features of these newsletters, which are collected by the women themselves.

A peek into the newsrooms of these newsletters is an interesting task. The editorial comprises of the Resource Person of the Samakhya centre, the clerk and a few of the sangha women who are literate. Some of them are also involved with the designing aspect, trying to merge the folk designs in the newsletters to give them a better and more rustic look. The news is collected on the basis of the activities of the centre and also, as provided by these women. It is compiled and written on the newspaper or even typed by the women. Then, the print is carried to the printer (who is located as far as 25 to 30 kms away) by the women themselves and selected copies of the newsletter are printed. Every month or every quarter, some 700 to 1000 copies of these newsletters are printed at an estimated cost of around Rs 2,500 to Rs 3,000, which is partially funded by Mahila Samakhya and partially by the women through various income generating activities.

According to the women who are involved in bringing out these newsletters, people have now started coming from all over the village to give details about their problems to be carried in the newspaper. "For us, this is the most effective medium for voicing our problems. We started them to share the knowledge between our sangha, but now, even the villagers have got connected to these newsletters," say Kiran and Sushma of Mahila Samakhya Jaunpur. She cites several examples where villagers have told them about the problems and they have highlighted them in their papers. She adds that since these are the only newsletters which can carry any and every news the villagers flock to them.

Some of the issues which have been highlighted in these newsletters, have ended up bringing about a change in the villages. Once, one of the villagers told the sangha women about his repeated requests to the pradhan to get the only access road to his village repaired. The women noted the case in their newsletter and sent a copy to the Block development officer. Reading the news, the BDO ordered immediate construction of the road. Says Rajumari of Ujala Mahasangh of Mahila Samakhya, "We felt like real reporters, for our story had managed to show an impact. We published the acknowledgement letter from the villagers in an issue of our newsletter."

In another case, the parents of a girl stopped her from going to school. The girl came crying to the sangha workers, and wrote an emotional poem for her parents. "We published the poem in our newsletter and sent a copy of it to her parents. Reading the poem, the girl's parents were convinced about the significance of education for her and did not stop her from going to school," says Varsha of Mahila Samakhya Chitrakoot.

At times, the women have even managed to solve some problems of the village by highlighting them in their newsletters. "There are several cases related to civic problems and cases where women have been harassed. We have sent the copies of the newsletter with the problems to the block level officials, who tries to take quick action based on these reports," says Neelam of Mahila Samakhya Sitapur.

The growth of these newsletters has even amazed those who initiated the entire initiative. Talking about the growth of these newsletters, the Deputy director of Mahila Samakhya, Uttar Pradesh, Dr Kumkum Tripathi feels it is thanks to the dedication and sincere hard work of the women that these newsletters have scaled such heights. "They are a part of our regular publications and come what may, the printing of these newsletters does not stop. We started these newsletters to promote educational initiatives amongst our neo-literates, as they served a perfect medium to bridge the gap between them and knowledge. But after all these years and the success of these newsletters, we are surprised to see that these newsletters have now taken the form of newspapers, which even have a section for world news. What is more, they are not only focusing on problems of women, but those faced by men too."

"It's not only the Sangha women who read the newsletter. Literate menfolk of our village too read the newsletter. Although initially it was tough for us to accept this initiative by the women, but then, we realised that it was a boon for the entire village as well," says Ramkishore Yadav, a village pradhan in Varanasi district. Like Yadav, many other men too shared similar views. For the villagers, the initiative has become an inseparable part of their everyday lives. It is more than a medium of communication for them, a powerful tool that has not only brought in changes in the respective villages but also mobilized the communities in and around these newsletters. These papers, the ones we would normally call 'alternate media', are touching lives in very mainstream ways.

BPO operations head into rural India

Inside India: Will villages be the next outsourcing destination?

Indian services companies are opening business process outsourcing (BPO) operations in rural villages as a way of keeping down costs for customers while bridging the digital divide in the country.

With the growth of the IT industry some Indian cities have seen greater prosperity but so far this has passed the rural areas by.

As part of an attempt to address this two BPO centres have been set up in villages and a third is being developed. The three centres will employ 250 people, and there are plans for more sites in the pipeline. See here for more picturesof how technology is changing rural India.

Verghese Jacob, lead partner at the Byrraju Foundation, which is masterminding the operation, said: "The pace of rural growth has been much slower than urban growth."

This rural BPO programme is called GramIT, and the centre comes with back-up power and bandwidth so there is interruption of service.

And as well as boosting the rural economy in India, there are some solid business reasons why companies might want to outsource to the villages - they work out 15 to 20 per cent cheaper than urban BPO.

Jacob said: "There is a big cost advantage to a company locating in rural areas because the infrastructure costs are low. We believe there are 80 to 90 million people that could be trained to take care of the back-office needs of the entire world."

Employee churn is less than four per cent compared to 25 per cent in restless rural call centres. The employees earn around 3,500 to 4,000 rupees per month - around £50, which is about twice what they would otherwise be able to earn. Staff at the centres deal with processes such as short-listing candidates for jobs or booking taxis for corporate travel.

Jacob said that when the BPO jobs are created, other types of jobs appear within a few months - with restaurants or taxi companies to serve the workers, further boosting the local economy.

He added: "The challenge is not to set up, the challenge is to make sure it remains sustainable and you have to have a viable business."

Current customers for the programme include technology company Satyam and the government of Andhra Pradesh.

Corporates look for rural gold

By M H Ahssan

Business honchos are descending on the rural markets, expecting to make a killing from whatever is left in the pockets of India's poor, led by an NCAER forecast of robust sales growth here.

All eyes are now shifting to the rural areas. Trucks carrying consumer goods are being directed to the nearest village. Rural India is now up for grabs.

It is no longer only hair oils, toothpastes, shampoos, soft drinks and potato chips that you will find stacked on the dusty shelf in a village shop. Corporate India now believes that the loan waiver, the National Rural Employment Guarantee Programme (NREGA) and successive bumper harvests have brought enough cash surplus into the hands of the rural community. It is therefore time to cash in on this new-found richness in the rural areas.

Is rural India really becoming prosperous? Or is Corporate India's greed that is driving them to the hinterland? Before we look at the ground realities, let us first see how the markets are shifting gear. The mobile phone has already made an aggressive foray. The sale of computers is being pushed through the government-sponsored e-governance programmes. Cars, two-wheelers, and consumer durables are eyeing the smaller markets. Coca Cola, Pepsi and Dabur India have relaunched specific marketing programmes. The wedding industry is already camping in the smaller towns. And the futures market too is excited.

According to news reports, Samsung, Nokia, Sansui, Philips, Maruti, Mahindra & Mahindra, LG, Tata Motors, Hyundai, Tata Sky, Hero Honda, Air Tel, Vodofone, BSNL, ICICI and Nestle are some of the corporate giants eyeing the rural markets. There are innumerable other smaller companies who have now ramped up their marketing operations in the tier II and tier III towns.

No, there isn't an economic revolution happening in rural India. It is only that the business honchos are descending on the rural markets, expecting to make a killing from whatever is left in the pockets of India's poor. Leading the corporate march into the rural areas is the industry think-tank, the National Council for Applied Economic Research (NCAER). It believes that the rural middle class is steadily growing, and the corporate can expect a sales turnover of 60 per cent from rural India.

Not only the domestic majors, global giants too are looking at India's rural sector as a potential kill. American agribusiness giants - Monsanto, Cargill, Wal-Mart and ADM - among the world's top multinationals have already found a foothold in the rural retail segment through the Indo-US Knowledge Initiative on Agriculture Research, Development and Marketing (KIA) agreement. These multinationals have already made it clear that they are not interesting in collaborating on agricultural research but keen to sell their products.

Meanwhile, not satisfied with the marketing opportunities under the agreement, two American senators have demanded a detailed study of the potential that Indian agriculture markets contain. Their plea is to open up the Indian farm sector to American agricultural products. At present, only 5 per cent of American produce finds its way to Indian farms. Well, the eagles are descending, and from all directions. The village mouse may find it hard to find a suitable cover to escape the attack.

The reason is obvious. So far, it is the sale of alcohol - both domestic brands and the locally produced - that has been the biggest destroyer of rural homes. Much of the farm income is known to have found its way to the liquor shops. No wonder, cereal consumption has further declined in rural areas, even though families are spending more on it. According to the latest report of the National Sample Survey Organisation (NSSO), monthly expenditure on cereals has gone up from Rs.101 to Rs.115, and yet per capita cereal consumption has climbed down from 13.4 kg per person per month in 1993-94 to 11.7 kg in 2006-07.

This report also comes at a time when the National Commission on Enterprise in Unorganised Sector very clearly and loudly states that 77 per cent of India's population (and the bulk of it inhabits the rural areas for sure) equivalent to 836 million people spend not more than Rs.20 a day. I am sure with Rs.20 a day expenditure, you cannot expect 836 million people to buy even two square meals daily. To these hungry millions, selling a growth dream in the form of consumer durables is certainly something that cannot be easily digested.

I stall can't fathom what the ICICI chairman H V Kamath had said sometimes back: "There is a lot of money to be made from the rural areas." If this is true, I see no reason why India should rank a dismal 66 out of 88 countries on the 2008 Global Hunger Index. As many as 12 of the 18 states measured, and that includes 'vibrant' Gujarat, technology-savvy Karnataka, suicide prone Maharashtra and the rice bowl of Tamilnadu, are listed in the category of 'alarming'. In fact, India stands much lower than Sub-Saharan Africa in the Hunger Index. Even Punjab, the food granary of India, is worse off than Gabon and Vietnam.

The villages of India have traditionally been victim of what is called reverse terms of trade. All these years, more money has actually been taken out from these villages than what has been invested. Some studies have shown that from a rural landscape of the size of 1000 acres, agricultural-input companies and that includes fertiliser, pesticides, and seeds, on an average pump out anything between Rs.30 and 70 crores every year, depending upon where these areas are located.

If only this money had stayed back in the villages, the face of India's village would have been in any case looked bright and vibrant. You wouldn't require the skills of organised money-lenders, through the micro-finance route, to exploit the poor and gullible. Although 50 million poor households are being given micro-finance, the poor are actually being forced to fork out returns at an exorbitant interest of an average of 20 to 24 per cent. In urban centres, you would be up in arms if you were made to pay such a high interest rate. But than, you need to know that the poor are being 'empowered'.

If the poorest of the poor women in a self-help group wants to buy a goat, which she needs for earning a livelihood, she has to pay an average interest of 24 per cent. I am sure, for a TV, fridge or a two-wheeler she will now get interest-free loans. After all, economists will tell us that the more she buys consumer durables, the more the GDP will grow. Even if they have to go to bed hungry instead, these are small sacrifices that need to be made for the sake of country's growth. Who said, selling dreams is only a Bollywood's prerogative?

Rural India promises growth for retail

There may be a slowdown in urban retail, but `Bharat' is still shining for retailers. The next phase of growth is expected to come from rural markets with rural India accounting for almost half of the domestic retail market, which is valued over $300 billion.

Rural India is set to witness an economic boom, with per capita income having grown by 50% over the last 10 years, mainly on account of rising commodity prices andimproved productivity. Development of basic infrastructure, generation of employment guarantee schemes, better information services and access to funding are also bringing prosperity to rural households.

"Overall there is a huge market which is waiting to be served, ready to splurge, willing to explore new products and services, and retailers can tap on their wallets," said Ramesh Srinivas, national industry director (consumer markets), KPMG India.

In rural markets, consumers are practical and price sensitive. Even though consumers at the bottom of the pyramid do not seem to have predictable income (which affects purchasing dynamics), the rural market proved to be surprisingly loyal. So if companies get it right they could really reap the rewards, experts added.

This is particularly true as changes in the rural economy such as people moving from agriculture into manufacturing, which pays better, are likely to lead to a economic boom.

In order to earn brand loyalty in the rural market, product design will need to go beyond ideas like smaller sizes (such as single use sachets) to create genuinely new products that appeal to this segment.

"This requires a deep understanding of the market and an appetite for innovation, posing a challenge for both consumer products companies and retailers as there is still lack of shared understanding about the ever-changing Indian market and types of consumers that make it", says Pinakiranjan Mishra, leader retail and consumer products, E&Y India.

Also, with most of the retail markets in cities getting saturated, rural markets offer a sea of opportunity for retailers.

Retailers have devised different models to serve rural markets. For instance, ITC promoted `choupal sagar' has a hub-and-spoke model involving farmers. "Themodel offers a rural shopping mall where they can sell their commodities and can buy almost anything including garments, cosmetics, electronics and even tractors," says a KPMG report.

Other examples include Pantaloon Godrej's joint venture (Aadhar), Reliance Retail (Fresh & Fresh Plus), Hindustan Unilever (Shakti), DCM (Hariyali Kisaan Bazaar) and Mahindra & Mahindra (Shublabh).

Telemedicine in Rural India

By M H Ahssan

In a developing country such as India, there is huge inequality in health-care distribution. Although nearly 75% of Indians live in rural villages, more than 75% of Indian doctors are based in cities. Most of the 620 million rural Indians lack access to basic health care facilities. The Indian government spends just 0.9% of the country's annual gross domestic product on health, and little of this spending reaches remote rural areas. The poor infrastructure of rural health centers makes it impossible to retain doctors in villages, who feel that they become professionally isolated and outdated if stationed in remote areas.

In addition, poor Indian villagers spend most of their out-of-pocket health expenses on travel to the specialty hospitals in the city and for staying in the city along with their escorts. A recent study conducted by the Indian Institute of Public Opinion found that 89% of rural Indian patients have to travel about 8 km to access basic medical treatment, and the rest have to travel even farther.

Can Telemedicine Bridge the Divide?
Telemedicine may turn out to be the cheapest, as well as the fastest, way to bridge the rural–urban health divide. Taking into account India's huge strides in the field of information and communication technology, telemedicine could help to bring specialized healthcare to the remotest corners of the country.

The efficacy of telemedicine has already been shown through the network established by the Indian Space Research Organization (ISRO), which has connected 22 super-specialty hospitals with 78 rural and remote hospitals across the country through its geo-stationary satellites. This network has enabled thousands of patients in remote places such as Jammu and Kashmir, Andaman and Nicobar Islands, the Lakshadweep Islands, and tribal areas of the central and northeastern regions of India to gain access to consultations with experts in super-specialty medical institutions. ISRO has also provided connectivity for mobile telemedicine units in villages, particularly in the areas of community health and ophthalmology.

This encouraging early success in reaching patients—together with recent technological advances in India, such as the proliferation of fiber optic cables, the expanding bandwidth, and the licensing of private Internet service providers—has encouraged ISRO to set up an exclusive satellite, called HealthSAT, to bring telemedicine to the poor on a larger scale. The proposed satellite would not only serve remote areas of India but also those in other poor countries in Asia and Africa. In the government of India's current budget, INR102.8 billion has been allocated for health. HealthSAT is expected to cost only about 1% of this budget, that is, between INR600 million to INR1 billion. Each receiving terminal (where patients and rural doctors are present for audiovisual conferences) in the villages is expected to cost only about INR0.5 million. This telemedicine service will save some costs, for example the money that patients would have spent on travel and accommodation.

A telemedicine system in a small health centre consists of a personal computer with customized medical software connected to a few medical diagnostic instruments, such as an ECG or X-ray machine or an X-ray scanner for scanning X-ray photos. Through this computer, digitized versions of patients' medical images and diagnostic details (such as X-ray images and blood test reports) are dispatched to specialist doctors through the satellite-based communication link. The information, in turn, is received at the specialist centre where experienced doctors examine the reports, diagnose, interact with the patients (along with local doctors), and suggest appropriate treatment through video-conferencing. The entire system is relatively user-friendly, and only a short period of training is needed for doctors at super-specialty centres and rural health centres to handle the system. And hospital technicians can take care of the operation and maintenance of the equipment.

M. N. Sathyanarayan, Executive Director of Space Industries Development, and organising secretary of the 2005 International Telemedicine Conference, said: “In the pilot phase of the telemedicine project, ISRO is providing telemedicine equipment as well as making available the required bandwidth on INSAT satellites. The main criteria for funding by ISRO are that the hospitals have to be government-run—state or central—or belong to public sector industries. The hospitals have to provide infrastructure as well as doctors and technicians for operating the system.”

“ISRO also provides the equipment and bandwidth to private specialty hospitals and hospitals run by Trusts, if these hospitals provide free service, including specialty consultation to rural hospitals that have been connected in the telemedicine network of ISRO. These hospitals have to provide follow-up treatment to teleconsulted patients at government rates.”

In its telemedicine initiative, ISRO intends to connect different types of Indian health care centers in a series of phases. L. S. Sathyamurthy, Programme Director of Telemedicine at ISRO said: “There are 650 district hospitals, 3,000 taluk [subdistrict] hospitals, and more than 23,000 primary health centers in the country. We must aim to connect all these in phases—first the district hospital connected to speciality hospitals in major cities, then the taluk-level hospitals, and finally the primary health centers, so that nobody, irrespective of his location, is deprived of lifesaving specialty consultation.” When the network grows, it may even include private hospitals as well as hospitals in Asia and Africa. Although the network will initially be used for teleconsultation and postoperative consultation, in the future it may accommodate even telesurgery and telerobotics.

The Impact So Far
Starting with pilot projects in the year 2001, together with a “proof-of-concept” technology demonstration, ISRO has established the facility in nearly 60 remote hospitals, which have been connected with 20 super-specialty city hospitals. A report presented at the Rajya Sabha (the House of States, or Upper House) of the Parliament of India suggested that the initial results of India's telemedicine initiative are encouraging. The report states that several telemedicine projects in India have been successfully interlinked—for example, the Andaman and Nicobar Islands telemedicine project links the G. B. Pant Hospital at Port Blair with Shri Ramachandra Medical College and Research Institute, Chennai, while in Karnataka, Narayana Hrudayalaya is connected to District Hospital, Chamarajnagar and Vivekananda Memorial Hospital, Saragur.

Adding to these early reports of successful linkage, there are also reports that telemedicine has helped to save lives in crowded pilgrimage centres and military outposts connected with mobile telemedicine units. For example, the Amrita Telemedicine Programme reports that on 13 January 2003, the programme's first remote telesurgery procedure was performed. The Amrita Emergency Care Unit at Pampa was able to save the life of a pilgrim by a telesurgical procedure using the local telemedicine facility. The cardiothoracic surgeon guided the procedure remotely, and the pediatric cardiologist at Pampa performed the procedure. Mobile telemedicine units were also rushed to the coasts and islands of India after the 2004 tsunami to provide medical consultation and relief to the affected people.

There are other indications that the telemedicine initiative may have had a positive impact. ISRO's annual report for 2004–2005 states: “More than 25,000 patients have so far been provided with teleconsultation and treatment. An impact study conducted on a thousand patients has revealed that there is a significant cost saving in the system since the patients avoid expenses towards travel, stay, and for treatment at the hospitals in the cities”. Dr. Devi Shetty, a cardiac surgeon and the Chairman of Narayan Hrudayalya, a hospital that has served thousands through telemedicine, said: “We have treated 17,400 patients using telemedicine connectivity in various parts of India, mainly from rural India, and [a] few patients from outside India. We use both satellite as well as ISDN connectivity. Now, with the Indian Space Research Organisation, which is our associate in this project giving us the satellite connection free of cost, we have a [larger] game plan of offering health care to African and other Asian countries.”

The Challenges and Controversies
The telemedicine initiative in India has not been free of challenges and controversies. “There are inevitable difficulties associated with the introduction of new systems and technologies,” according to Sathyamurthy. “There are some who needlessly fear that they will lose their jobs. Although the systems are user-friendly, there are others who are affected by the fear of the unknown in handling computers and other equipment. There is a feeling that the initial investment is high and hence financially not viable.” In addition, there may be technical hitches, such as low bandwidth and lack of interoperability standards for software.

Discussing HealthSAT, Dr. D. Lavanian, an Indian expert in telemedicine affiliated with the Apollo Telemedicine Networking Foundation, Apollo Hospitals, Hyderabad, India, said: “[HealthSAT] is excellent, but some questions remain. Presently HealthSAT connectivity is expected to be given free of charge to certain government entities. This is unsatisfactory as a large percentage of health care in India is by private entities.” Dr. Lavanian added: “On my requesting to ISRO to open up the same to the private health industry, of course for a fee, I have not received any positive answer. This means that a large percentage of the population of India will be denied healthcare via telemedicine.”

These difficulties can probably be surmounted. In the late 1980s, when computers came to India, similar kinds of problems were seen in different parts of the country. That is, people showed technophobia and expressed their fears that computers would cause unemployment and would also be prohibitively expensive. But the country overcame these challenges and fears, and eventually became a superpower in the field of knowledge and information technology.

With the aid of HealthSAT, India's telemedicine initiative has the potential to provide specialized health care to millions of poor Indians. This potential was well summed up by Dr. Devi Shetty: “In terms of disease management, there is [a] 99% possibility that the person who is unwell does not require [an] operation. If you don't operate you don't need to touch the patient. And if you don't need to touch the patient, you don't need to be there. You can be anywhere, since the decision on healthcare management is based on history and interpretation of images and chemistry … so technically speaking, 99% of health-care problems can be managed by the doctors staying at a remote place—linked by telemedicine.”

Rural India Benefits From Mobile Communications

Mobile communication is revolutionizing economic and social life in rural India, spawning a wave of local entrepreneurs and creating greater access to social services according to a new study by The Center for Knowledge Societies (CKS) commissioned by Nokia. The research identifies seven major service sectors including transport, finance and healthcare that could be radically transformed through mobile technologies.

Mobile phone ownership in India is growing rapidly, six million new mobile subscriptions are added each month and one in five Indian's will own a phone by the end of 2007. By the end of 2008, three quarters of India's population will be covered by a mobile network. Many of these new "mobile citizens" live in poorer and more rural areas with scarce infrastructure and facilities, high illiteracy levels, low PC and internet penetration. The study looks at how their new mobility could be used to bridge the growing economic and social digital divide between rural and urban areas.

Veli Sundback, Executive Vice President, Corporate Relations and Responsibility, at Nokia, said, "Mobile phone ownership in India is growing at a phenomenal pace. This new found mobility undoubtedly has the potential to make a major contribution to socio-economic development, and we recognise the responsibility we have to play a key role in achieving this. This report builds on the work Nokia has been doing in developing markets like India for several years to understand how we can deliver on our goal of making universal access to technology and the associated benefits a reality."

Dr. Aditya Dev Sood, the report author highlights how many new adopters of mobile phones have found their incomes rise, he explained these findings as the increased productivity made possible through mobile communications. "While mobile phones are widely seen merely as a communications medium, they should really be seen as a new and essential form of infrastructure that will transform a host of other service sectors in rural economies around the world," he said.

The report identifies seven service areas — Transport, Micro-commerce, Finance, Healthcare, Governance, Education and Infotainment.

The research is based on detailed ethnography and participant observation among communities living in three rural areas of India — Badaun in the state of Uttar Pradesh, Satara in the state of Maharashtra and Chittradurga in the state of Karnataka — as well as one urban area, Bangalore. Researchers meet with small business owners, farmers, home owners and others to understand how mobile communication has already transformed their daily lives and the further potential of mobile communications to enhance livelihoods.

High-tech sector eyes India's rural market

By Indrajit Basu

The roads are dusty and unpaved; electricity is erratic and its quality inferior; the residents seldom finish school and to most the use of hi-technology starts with a television and ends with a mobile phone - just for talking. Yet ask the heads of dozens of technology companies in India and they will tell you that foremost on their list of strategic moves is to head into rural India.

From multinational high-tech consumer durable companies to Chinese mobile-phone makers; from global information technology giants such as Microsoft to back-office service providers; global telecom and biotechnology companies, and even India's IT-sector lobbyist, the National Association of Software Services Companies (NASSCOM), are stepping out of the cities and moving into the villages and towns of rural India.

Each has different imperatives and objectives, but all say that the growing influence of rural India on the country's society and economy is too big to ignore. Over 740 million people - about 65% of India's population - live in some 600,000 villages and small towns, and according to a recent survey by Indian Revenue Service, more than half of the 145 million rural households in India earn between US$300 and $1,400 a year.

And although only estimates of the present size of the rural markets are available, according to a survey by the global advisory firm Mckinsey & Co, carried out in April last year, India's rural markets have the potential to reach $500 billion by 2020.

But that's old news. After all, the realization that rural India holds huge potential dawned on people about two decades back, when fast-moving consumer product companies - makers of toothpaste, soap, detergent, soft drinks, etc - moved in, first just to sell their products. But what's different in the "Rural Strategy Version 2" is the new range of interests and their approach in tapping this largely unexplored market. The latest rural aspirants include a wide range of companies, ranging from retail products to drug and industrial products companies, as well as many technology companies.

Their strategy, too, is different. Few are looking at selling their products or services immediately; in fact, many are willing to wait for years. In addition, almost all are targeting the entire rural population rather than just the affluent elite.

Take Yahoo for example, the latest firm to announce that it is moving into rural India. This Internet company has finally decided to take the plunge after watching the markets for several months, primarily because competition from rival portals is getting tougher. According to Pranesh Anthapur, chief operations officer of Yahoo India, "The importance of rural India can't be underestimated any more." The company plans - for the time being - to just promote brand awareness by providing basic e-commerce support against the backdrop of growing personal computer ownership and Internet penetration in rural India.

Yahoo's obvious competition in the rural markets is Google, which announced its foray about two weeks back and does not have profits in mind either - at least not just yet. This search-engine technology innovator's "challenge" is to make the search engine less complicated, as well as to develop content for rural users - such as weather updates, crop patterns, ebb and tide schedules, etc.

Similarly, DataWind Net Access Corp, a Canada-based provider of wireless web access products and services, has tied up with the Indian IT lobbyist NASSCOM to run Internet training programs in the villages and small towns in the Indian states of Orissa, Andhra Pradesh, West Bengal and Maharashtra. The objective looks more social than commercial in the sense that the aim is to improve the reach and user base of the Internet in villages and small towns so that state and district administration services can be enhanced and made more transparent.

Rural India also drives volumes
But if the rural markets are not revenue generators yet for Yahoo!, Google or even Microsoft - which is implementing the "IT Saksham" project primarily to evangelize the benefits of using IT in rural communities - most telecom companies (and even mobile handset makers) are moving out of larger cities and plugging into the rural sector, purely to ramp up volumes.

Although urban markets are still lucrative and will continue to be the focus for the telecom sector, the untapped potential of the rural markets is now seen as the next volume driver. "India has the target of reaching 500 phone subscribers - from the present 200 million (fixed plus mobile) - by 2010, and that kind of growth can only come from the rural segment," said TV Ramachandran, director general, Cellular Operators Association of India (COAI).

In fact, a strange thing happened in India two weeks ago. To create and run networks in remote areas, the government announced the auction of 81 rural regions, the laying-out cost of which was supposed to have been subsidized by the Universal Service Obligation Fund (USOF) created by the Department of Telecom (DoT) in 2003. The resources for implementation of this objective are raised through a 5% universal service levy on gross revenue of all telecom companies (except the pure value-added service providers like the Internet, voicemail, e-mail service providers) and grants and loans from the federal government.

However, in 38 of the 81 regions, telecom companies did not bid - meaning that subsidies was not sought at all - and in about 15 regions, Bharti Airtel, Reliance Communications and Aircel (three of India's large telecom companies) submitted negative bids - which means that they preferred to pay into the USOF instead of accepting its support.

"Most of the rural pockets, which were unviable even a few years back, have now become viable and profitable. Therefore, operators preferred to pay to the USOF rather than to take its support and be bound by a few restrictive DoT conditions," said a COAI spokesperson.

Small wonder then that with the DoT stranded with unutilized USOF funds of about $2 billion as of March, many telecom experts have started questioning the utility of creating such a fund in the country.

Indeed, to some extent, thanks to an abysmally low teledensity (number of telephone connections per 100 people) of 4% (versus 15% in urban areas) in rural India, that segment of the market is scorching. According to the vision plan drawn up by the DoT, 200 million rural telephone connections are envisaged by the end of 2012, taking the rural teledensity figure to 25%.

New source for human resources
India's 700 million-plus rural population is a cheap talent pool as well. That's what the flourishing IT-enabled services or the business process outsourcing (BPO) sector has realized lately. Stymied in their growth by an acute shortage of human resources in the cities (where the attrition rate can go up to 60%) local BPO companies have now started moving into to the rural sector for launching their services. The other reason why the rural sector has emerged as attractive is cost. The industry says that the infrastructure cost is 20% cheaper compared to urban set-ups.

Pioneers that have set up such centers include Lason Inc (a US-based outsourcing firm), GramIT (a rural venture associated with local IT giant the Satyam Group), and Datamation (a Delhi-based group). These are now the key players in the Indian rural BPO scene, who say that besides reducing costs for their customers, their rural strategy has also been a key contributor toward bridging the digital divide and creating jobs.

Selling in Rural India

The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore.

To expand the market by tapping the countryside, more and more MNCs are foraying into India's rural markets. Among those that have made some headway are Hindustan Lever, Coca-Cola, LG Electronics, Britannia, Standard Life, Philips, Colgate Palmolive and the foreign-invested telecom companies.

Opportunity
The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban.

As a result of the growing affluence, fuelled by good monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991, rural India has a large consuming class with 41 per cent of India's middle-class and 58 per cent of the total disposable income.

The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all two-wheeler purchased.

The rural market accounts for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is more, the rural market for FMCG products is growing much faster than the urban counterpart.

The 4A approach
The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media.

However, the rural consumer is not unlike his urban counterpart in many ways.

The more daring MNCs are meeting the consequent challenges of availability, affordability, acceptability and awareness (the so-called 4 As)

Availability
The first challenge is to ensure availability of the product or service. India's 627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in rural areas, finding them is not easy. However, given the poor state of roads, it is an even greater challenge to regularly reach products to the far-flung villages. Any serious marketer must strive to reach at least 13,113 villages with a population of more than 5,000. Marketers must trade off the distribution cost with incremental market penetration. Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village, stockists use autorickshaws, bullock-carts and even boats in the backwaters of Kerala. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. To ensure full loads, the company depot supplies, twice a week, large distributors which who act as hubs. These distributors appoint and supply, once a week, smaller distributors in adjoining areas. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices.

Affordability
The second challenge is to ensure affordability of the product or service. With low disposable incomes, products need to be affordable to the rural consumer, most of whom are on daily wages. Some companies have addressed the affordability problem by introducing small unit packs. Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar Pradesh — the so-called `Bimaru' States.

Hindustan Lever, among the first MNCs to realise the potential of India's rural market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for 50 gm. The move is mainly targeted at the rural market. Coca-Cola has addressed the affordability issue by introducing the returnable 200-ml glass bottle priced at Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come from the rural markets. Coca-Cola has also introduced Sunfill, a powdered soft-drink concentrate. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and mutiserve sachet of 200 gm priced at Rs 15.

Acceptability
The third challenge is to gain acceptability for the product or service. Therefore, there is a need to offer products that suit the rural market. One company which has reaped rich dividends by doing so is LG Electronics. In 1998, it developed a customised TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. Because of the lack of electricity and refrigerators in the rural areas, Coca-Cola provides low-cost ice boxes — a tin box for new outlets and thermocol box for seasonal outlets.

The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3.5 crore in total premia. The company tied up with non-governmental organisations and offered reasonably-priced policies in the nature of group insurance covers. With large parts of rural India inaccessible to conventional advertising media — only 41 per cent rural households have access to TV — building awareness is another challenge. Fortunately, however, the rural consumer has the same likes as the urban consumer — movies and music — and for both the urban and rural consumer, the family is the key unit of identity. However, the rural consumer expressions differ from his urban counterpart. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Consumption of branded products is treated as a special treat or indulgence.

Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists. Godrej Consumer Products, which is trying to push its soap brands into the interior areas, uses radio to reach the local people in their language.

Coca-Cola uses a combination of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on advertising on Doordarshan, which alone reached 41 per cent of rural households. It has also used banners, posters and tapped all the local forms of entertainment. Since price is a key issue in the rural areas, Coca-Cola advertising stressed its `magical' price point of Rs 5 per bottle in all media.LG Electronics uses vans and road shows to reach rural customers. The company uses local language advertising. Philips India uses wall writing and radio advertising to drive its growth in rural areas.

The key dilemma for MNCs eager to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins. Mr Carlo Donati, Chairman and Managing-Director, Nestle, while admitting that his company's product portfolio is essentially designed for urban consumers, cautions companies from plunging headlong into the rural market as capturing rural consumers can be expensive. "Any generalisation" says Mr Donati, "about rural India could be wrong and one should focus on high GDP growth areas, be it urban, semi-urban or rural."