Opportunities in rural India?

Written by: Madhur

On Mar 26th, 2007

According to this study, when the question “Have you heard of Internet?” was thrown at few people from lower socio-economic class Indian society, around 75% of population responded with a NO. I bet this number would be much smaller when the question asked is about phone/mobile rather than Internet. Internet has been around in India before mobile phones hit the market. What could be the reason for such less awareness of Internet?

I think the answer is clear - 70% of India is still rural and agrarian and given their day to day lifestyle, having Internet access would not add any value to it. The next question then is, whether there really exists any real use case scenarios that rural India cares about. Sam Pitroda made the concept of long distance telephony commonplace with the introduction of PCO’s. In retrospect, its easy to see how the concept made sense. PCO’s created employment and enabled people to communicate in a way like never before. Does there exist a similar “gap” today that Internet can fill?  Here are a few notable initiatives that companies are taking:

1. ITC’s eChoupal Initiative: An innovative rural distribution framework that makes use of computers and Internet for procurement of soybeans from rural India. You can read the details in this article over at India Knowledge@Wharton, but it essentially enables the farmers to go to Internet kiosks and check prices and help them make a decision to sell their produce at the local market or directly to ITC. Mukesh Ambani group is planning to setup a similar farm-to-storefront infrastructure to tap into the rural market.

2. Online giant Google also realizes the enormous opportunity in rural India and is planning a number of initiatives to tap into the market by creating customized content including weather updates, crop patterns and other local data.

There are other similar initiatives that different companies are taking. Some of Internet based services (esp. related to weather, crops, jobs, train-tickets, better means of communication, etc.) can be very useful in improving the lives of the rural people. The mode and ease of access is going to be key. Its hard to expect people to have PC’s in the villages. Its hard to expect villagers to understand a complex computer keyboard. Clearly, noticing the ever increasing mobile penetration, providing customized, easy-to-access content on the mobile platform seems like the way to go. But of course, figuring out the business model could be tricky. What do you think? How much can people in rural India really benefit from such services? Does there exist economically viable models (both for villagers as well as the Internet entrepreneurs/companies) that can add value in the life of a common villager?

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Entry Filed under: infrastructure

6 Responses

  1. 1. vijay kurhade said on March 26th, 2007 at 6:16 am

    rural india does hold maximum of indias population, so opportunity wise its a promising land but biggest issue for entire country is infrastructure a better thought about and planned one.

    gobal warming is already killing agriculture, middle men conning is already putting farmers at verge of suscide etc..

    whoever is going to target rural area, need to have customized solutions since a widened gap and culturally different earning’s and lifestyle of urban and rural area exists to great extent.

  2. 2. vslog said on March 27th, 2007 at 5:35 am

    Why do we need internet in rural India? Lets get them clean water, electricity, primary education and health care first. Urban India is a large enough market for the internet industry to blossom in the meantime.

  3. 3. Madhur said on March 27th, 2007 at 4:21 pm

    vijay, agree with you, customized solutions is the key, hopefully pre-packaged in some device like mobile phone that people already use.

    vslog, agreed that bare minimum necessities need to be provided much ahead of Internet, but I still think some scenarios can be fulfilled in a much better way with some basic Internet capability, which can really make a difference. Essentially just cheaper, richer and better communication with the outside world.

  4. 4. vslog said on March 28th, 2007 at 7:25 am

    I doubt it. Yes, may be they can check the prices of grains real-time, but they need to learn to read and write first. Yes, they can check weather info or they can listen to the radio. For most of what villagers need, SMS will do it for them. Seriously, other than porn (which actually sounds like a pretty cool idea :), I cannot imagine any viable business models in rural India

  5. 5. Mrutunjay said on March 31st, 2009 at 12:12 pm

    Internet is a good solution for spreading knowledge as well as access to information immediately . we can see the example of ITC echoupal which is a nice initiative by ITC group. About providing the basic needs first ,no doubt basic needs are important but internet is not a obstacle for it ,we can better say it is an add on which will boost the prosperity . I ll say there is a huge opportunity lies in rural india which need to be explored .Instead of competing with eachother to get the market share in mature market companies should focus on new & emerging market like rural india . During the time of recession rural india is the den from where the demand is going to be generate.

  6. 6. Rajendra Prasad said on April 17th, 2009 at 2:19 pm

    You are right vijay. If rural area provided with internet facility, then how many people will get benefit? how many well known about computers? what about other facilities like electricity, access to internet? I think peri urban and urban areas can easily access to internet.

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