A recent report by Kantar and GroupM’s experiential marketing unit, Dialogue Factory, reveals that 70% of individuals in rural India are expressing concerns about their financial situations. Titled the ‘Rural Barometer Report,’ the study aims to shed light on the priorities of rural consumers regarding inflation and its impact on consumer behavior and purchasing patterns.
The worries about inflation are influencing consumer confidence, resulting in a decline in the first half of the year (H1 2022). According to Dalveer Singh, Head of Experiential Marketing, APAC, Dialogue Factory, significant expenditures over the last six months have either remained stagnant or decreased. However, there is a notable increase in spending in the construction categories, particularly in small construction projects, indicating high future intentions in rural India.
The report identifies concerns about personal financial situations, particularly among skilled and unskilled workers, as well as those dependent on small businesses like traders and shopkeepers. Agriculturalists in rural India show relatively lower concerns about personal financial situations but exhibit lower confidence in the overall economic resilience of the country. The report also notes varying levels of confidence in the economy’s resilience across different regions, with southern regions generally more optimistic than northern India and West Bengal in the east.
Despite concerns, the claimed monthly household expenditure in rural India has risen by eight percent, offsetting the effects of inflation, as claimed monthly household income has increased by 12% during the same period. However, the report indicates a five percent decline in the monthly purchase incidence for essential categories like cooking oils, laundry products, biscuits and chocolates, and personal hygiene products since December 2021.
To cope with inflation, consumers in rural India are adopting strategies such as shifting to smaller-sized packs and practicing portion control to make packs last longer. In terms of media consumption, the report notes a narrowing gap between traditional and digital media, although traditional media continues to enjoy higher credibility.
Puneet Avasthi, Senior Executive Director, Specialist Businesses, Insight Division, Kantar, emphasizes that while inflation concerns persist in rural India, household incomes are rising faster than inflation rates, providing some stability. The report is the fourth edition of the Rural Barometer and was conducted with Kantar’s data and insights network and Dialogue Factory’s rural marketing intelligence, covering 18 Indian states across adults aged over 18, with representation across gender, new consumer classification system (NCCS), and age groups.