rural market segmentation

This at a time when the value of online transactions has already touched $3.1 billion (about Rs 19,650 Crore excluding travel portals) through popular e commerce sites such as Flipkart, Snapdeal, Amazon, Paytm, ShopClues. Almost all the E commerce companies are fighting war to grab as much as possible customer base in Mega cities. What they have not even tried to capture is a vast untapped customer base of rural market.

Here is FS analysis why rural customer base is not a focus area for E commerce giants.

  1. Proper Channel to Capture Order – Partially Available

Being least tech savvy most of the rural customers are not educated enough to use internet based order platforms on a computer or mobile. To grab untapped rural market basic requirement will be to create a proper channel so that even a layman could put an order through that system.

  1. Supporting Infrastructure – Partially Available

Poor internet connectivity, not availability of basic infrastructure (Computer or proper mobile) is next major challenge which has, till now, been able to hold the spread of E commerce into Rural Areas.

  1. Mode of Payment – Partially Available

Unavailability of internet banking, debit & credit cards in rural customer base could be the major challenge that has been holding E commerce companies to look for rural customers.

  1. Least Priority Customers – Content by Grabbing Low Lying Fruits

Most of the E commerce companies have till date emphasized on grabbing the customer base available in Mega cities only. Not even a single E-commerce giant has tried to look beyond that.

  1. Distribution Network – Partially Available

Most of the courier companies, whose service is generally availed by E commerce players to distribute products to customers, are not yet available to serve rural customers.

  1. Money – Matters a Lot

Rural customers with a lesser buying power, pay much attention on negotiation. Spending money for online ordering is altogether a new route for them. Too much apprehension will be already there to accept such an idea.

  1. After-Sales Service – A Concern

At present, E commerce customers generally struggle to avail service from product makers. It’s really a serious issue which could jeopardize prospects of company even in urban market.

  1. Complexity of Supply Chain High

Getting order is not difficult, delivering the product is. Vast customer base and spread on larger area restricts the companies from diving into product delivery to rural customers.

  1. Know how about E commerce – Low

Most rural population is still not familiar with the technical advancements in the field of E commerce. First and foremost requirement for the companies is to make their presence felt to the customers, then to educate them how the magic of “Product delivery in few clicks” works.

Though there are certain E-Retail companies like IPAY, Inthree and Storeking which are working fine in southern part of India but Indian rural market is still untapped in terms of Online Retail business.