The majority of LG's revenues are now coming from smaller towns like Hapur, Trichy, Jorhat and Asansol. In 2002, 60 per cent of its turnover came from the urban market. "The urban market is a replacement and upgradation market today," adds Samsung's director, marketing, Ravinder Zutshi. "The rural market is growing faster than urban India now," says Venugopal Dhoot, chairman of the Rs 989-crore (Rs billion) Videocon Appliances. The urban consumer durable market for products like colour TVs, washing machines, refrigerators and airconditioners is growing annually at between 7 per cent and 10 per cent.īy comparison, the rural market is zooming ahead at around 25 per cent annually. The reasons for heading into the rural areas are fairly clear.
As a result a rural bloodbath between white goods giants is clearly on the cards. Now the white goods manufacturers are hoping to catch the eye - and the wallets - of the out-of-towners in a bigger way than ever before. Recently the company has hired another 100 people for its Igo team.Ĭracking the rural market has become the holy grail for scores of Indian companies. Mirc says that both Igo and Onida are selling in the rural areas. Mirc is already selling a second-string brand Igo which is slightly cheaper than its Onida range. There's also Mirc Electronics which late last year launched its Operation Vistaar (meaning expansion).
Greater penetration has meant greater focus."īut LG isn't the only white goods manufacturer that is striking deep into rural India. Says Anil Arora, head, marketing, LG India: "A chunk of our revenue was coming from that segment and there was potential to grow it even further. At another it has gone on an office-opening spree in India's smaller towns. At one level, it has introduced cheaper products like it Sampoorna television range. At another level, it figured that more offices in smaller towns and cities were the need of the hour. Two years ago the company's top brass was debating how to reach out to rural India.Īt one level, the company figured it needed new cheaper products to lure the rural buyer. It's a twin-pronged strategy that has worked brilliantly for LG Electronics, India.
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