For rural India, mobile recharges are important than colas, chocolates

Smartphones have made deep inroads in rural India and even they have a ‘selfie’ fetish, similar to urban kinds.
article source: Business Insider:  July 12, 2016

The smartphone trend is rising in rural sector, so much so that the rural population is using money to recharge their phones to watch online videos than spending on low-cost FMCG items such as cold drinks, chocolates, etc.The ten-rupee recharge pack is a hit in rural India.

“The ‘selfie culture’ is making consumers spend more on their phones rather than on fast-moving consumer products, which are discretionary,” Suresh Narayanan, managing director of Nestle India, told ET.

As per the Internet & Mobile Association of India (IAMAI), the mobile internet user base in rural India nearly doubled in 2015, while in urban sector, it increased by 71%.

“Spends on mobile recharges – or low-priced entertainment options – have been replacing impulse buys in rural markets. It’s been directly impacting a category like ours and we’ve been observing this for the past four-five quarters,” Perfetti Van Melle’s Managing Director Ramesh Jayaraman told ET.

In a bid to attract rural population, Coca-Cola and PepsiCo even went aggressive and slashed prices to Rs 5 per serving.

“In rural areas, there was lesser money because of two years of deficit rainfall. Whatever little money was in their hands, rural consumers preferred to spend on mobile recharge rather than colas. In urban markets, extreme heat prevented consumers from stepping out and impacted our sales. Besides, there are other options like water and functional drinks which did better,” ET quoted a person as saying.

According to Hong Kong-based market tracker Counterpoint Research, almost a third of smartphone sales are in rural India, which is poised to double this year, whereas the total market is estimated to grow by 30%.

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