Thursday, May 22, 2008

Rural services in demand : Based on consumer expenditure

The primary goal of this lengthy article is to project a bird view on rural services in demand, and in turn, to provide you the opportunities exist in this unorganized services domain. Each of these services can be served by the organized sector and can become as giant as Microfinance majors such as SKS/Basix.

I have spent considerable time in Rural India (about 15-20 years). Based on this and coupled with recent observations (in tribal locations, villages, small towns) led me to write about these services in demand.

Note: 1. These observations are based on personal expenses (of rural villagers) alone and professional expenses are not considered.
2. These are my own personal observations noted over a period of time and are not carried by any systematic empirical evidence.
3. Order of the services is based on demand.

Marriages/family based events:
Rural Indians are really crazy about celebrating family functions which include: Marriage, Death, Child birth, Puberty (similar ceremony exists even for males), Festivals, etc. We can understand the craziness of Indians in general from this fact: 50% of the packaged sweets of the famous "Haldiram's" are sold during Diwali season alone.

Typically Rural Indians are very conservative about their expenses, however during the ceremonies they just don't care about the costs. This weakness is being cashed during festivals/marriage-season/melas/haat by the local businessmen who are able to sell the stock usually at double the price and importantly, most of it. So the money spent at these times is repaid by villagers, usually, over their lifetime.

Typical expenses during a marriage (I am specifically mentioning about marriage is for the reason that it is the one which covers the large of part of their life-time expenses):
  • Dowry
  • Invitation expenses
  • Band
  • Gold/Ornaments
  • Cloths
  • Lighting/Arrangements
  • Commuting expenses (during invitations to a week later to the marriage day)
  • Food/Alcohol
  • Others such as Flowers/Haldi/ Kumkum/ Puja articles/ Cereals/etc
NOTE: Unlike urban marriages, typically rural marriages are held near to home, also all the arrangements (labor works/ cooking/ accommodation/etc) are being supported by other villagers, and so, those costs are not covered.

Religious/Caste-based events
These events are similar to above ceremonies except for the following basic differences.
1. These are periodic
2. These are organized by groups of people unlike marriage kind of ceremonies where-in a single family hosts it.
3. Although many people love to spend on these events but there can be many people who does not like to spend but they do co-operate in organizing them and spend due to social pressures.

Typical expenses during a religious event:
  • Lighting/Arrangements
  • Moorthi (statue of God)
  • Puja articles from each household
  • Food/Alcohol
  • Commuting expenses (sometimes this could be very large)
  • Band
  • Recording Dance
  • Drama or similar artistic celebration
  • Other expenses needed as per the festival/local customs/season
Rural villagers are not knowledgeable about hygienic living, so are prone to long-term diseases. Most importantly, they are very much scared about these diseases. This is very much cashed by local health practitioners. Usually, these guys are under-qualified, do not have proper skills to diagnose/treat the patients and also do experiment on those poor villagers. However, surprisingly, these health practitioners are almost treated with demi-God status.

Typical expenses during the medication include:
  • Doctor fees
  • Medicines
  • Commuting
  • Change in food habits/life-style
  • Others specific to the health problem
Child expenses:
Typically the number of children in a home are anywhere between three to ten. Although expenditure on a single child could be less but when you consider all the children, child expenses makes a major share of their total family expenses. Let us consider this example: when a mother purchases stick-ice cream, she would purchase for all the kids. So, this makes her not to purchase regularly. Health of a child is a serious concern.

Typical expenses on a child:
  • Health
  • Education
  • Food and shop-eatables such as chocolates/colas/sweets etc
  • Cloths (usually these are recycled and so, relatively lesser expenses compared to urban Indians)
Commuting expenses:
As the villagers are more social and so keep commuting regularly. It could be for marriage kind of ceremonies or religious trips or to visit relatives or health issues or to avail government services or money exchanges etc. Usually, they commute family as a whole and so, this becomes one of their major expense.

Typical expenses during travel are:
  • Fares
  • Stay
  • Food and other eatables such as chocolates/colas/sweets etc
  • Other expenses specific to the purpose of visit
Miscellaneous observations:
  • Rural India has the penetration of the following beauty related FMCG products: Soap, Hair-Oil, Shampoo, Fair creams (surprisingly yes, they are beauty conscious).
  • Mobile is the single most favorite entertainment gadget (more than TV, Radio, Tape recorder, etc)
  • They are all movie/cricket-mad lovers
  • Regular household items are very few: Cloths, Vessels, Cereals, Lentils
This has already become pretty long and so I will continue this with a new article covering how these can be converted as organized services. Of course, I would love to hear comments either by voice/text.


gstinblogger said...

well thanks for sharing your experience ,but what development or change you wanna bring ?

gstinblogger said...

well i m working on project called "e-government" and will be very it'l be very helpful for us to know what changes for development can be bought in?