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Heartland is where consumer is

india Updated: Mar 24, 2009 01:13 IST
Archna Shukla
Archna Shukla
Hindustan Times
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Sitting on a cushion in a corner of his Seepri bazaar shop in Jhansi, Shyam Babu Pandey shouts out to an assistant the household items on a customer’s shopping list. Jhansi, best known for the valorous Rani Laxmibai, is a tier II town in Uttar Pradesh and for marketeers, it epitomises rural India.

Pandey inherited the shop from his father. Business has always been sufficient, he says, explaining why he stayed on even though one of his sons moved to Gurgaon to work with an outsourcing company. That he stayed back may have been for the best. A few weeks ago, the son called to say his company was cutting jobs and he may be headed home.

The downturn taking a heavy toll on big city-based companies hasn’t had any impact on Pandey’s business. “Most families I cater to have an agricultural background… their basic income comes from the agricultural land,” he says.

His customers have been happy to indulge themselves of late. They have good reason: agricultural production has been rising and a sharp increase in the minimum crop price, assured by the government, has boosted incomes. Those with the government have received salary hikes ordered by the Sixth Pay Commission.

“My customers are constantly upgrading their brands. Most families that used tooth powder have begun using toothpaste.” And, it’s true for the country’s semi-urban and rural markets.

Watchmaker Titan Industries opened its third showroom in Salem, a small town in Tamil Nadu, earlier this month. The third was opened because the existing two had been clocking double-digit growth over the last year, says Harish Bhat, chief operating officer, Titan Industries. But what happened on the inaugural day was unexpected: 10 solid gold watches were sold. “The inaugural day’s sale…was the highest ever in the history of our retail chain,” says Bhat.

“The global meltdown has underscored the fact that India is not one integrated market… it’s diverse and there are different economic factors at play, ” says Rakesh Shukla, chief statistician at the National Council of Applied Economic Research.

The factors responsible for pulling down consumption in urban markets — job cuts, freeze on salaries, increase in liabilities — among others, have had no or negligible impact on rural consumers, he says.