Rural India is home to roughly 840 million people, almost 70% of the nation’s population and generates about 50 per cent of the country’s gross domestic product (GDP). Yet the global players dreaming of penetrating into the emerging market are unable to set a strong foot in the territory. Only a countable number of international brands have been able to carve out a name for them in this complex market. The economy here operates as an isolated ecosystem, immune to global recessions and slow to respond to new trends in business. 3 particular traits of how business is done in this part of the world:

Trust over Brand – Brand image and trust are often used interchangeably while describing consumer’s favour for products. But there is a clear distinction when it comes to rural markets. Even products with little brand image become highly trusted as a result of competitive costs, quality and more importantly retailer recommendation. Be it automobiles or electronics or cosmetics, retailer’s say has much greater value in customer’s choice than any amount of advertising which can be expected of a customer base with very little internet and social media usage.

Network works – One fact about villages: Everyone knows everyone. Even if my uncle’s cousin’s nephew has an electrical appliances business, he is directly recommended to me and anyone in connection to me. Such is the importance given to acquaintance based businesses that it makes online retailers look like less trustworthy far off businessmen. Surprisingly, networking techniques still remain same. People make it a point to attend every party and function they are invited. All kinds of connections are made in these events. One new friend and one good transaction thereon provide the required trust for long term business. Another interesting aspect of village folks is the importance they give to meeting someone in person. On every special occasion, greetings are delivered directly and are generally followed with a gift. Text messages and e-mails are almost non-existent. Knowing customers and lenders at a personal level hugely increases the trust.

Entrepreneurship is the word – Whereas the students in metros struggle to pile up degrees and aspire to work for big and bigger organisations, rural kids carry a different dream altogether. Big company names are not even heard of. Majority dreams to join a small business and set up one eventually. That completes their process of ‘settled life’. Stories of young entrepreneurs who grew into established businessmen and made a name for themselves are commonly heard in the villages. Businesses established this way are the biggest competitors for the international chains that try to penetrate in the regions. People seem to have more trust in the guy who grew up into a successful businessman in front of their eyes than in a new entrant.

Overall the rural business model has features that are in stark contrast to those of its urban counterpart. The trend of small scale businesses being replaced by mega stores and online sellers is a picture far away from today’s reality in the country side.