Rural households present major opportunities for businesses to expand their footprint in new territories and markets. Rising incomes, growing tech penetration, and strong demographic indicators make rural consumers an appealing proposition. However, challenges that include logistics, rural flight, and poor facilities are obstacles for business. This report will illustrate the evolution of rural regions, alongside the challenges and opportunities present within them.
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The global market of rural households is huge, and underserved and undertapped in many regions of the globe. In the world’s two most populous countries – China and India – rural households represent almost half of total homes. As urban markets become increasingly saturated and hypercompetitive, urban consumers represent a lucrative opportunity.
Rural households are in a state of flux. Urbanisation, digitalisation, rural flight, and immigration are just some of the factors transforming rural consumer markets. There are also four distinct rural market types, each one with a major influence on local purchasing power and lifestyle.
Most of the current and future opportunities in targeting rural households lie in emerging markets, and specifically in Asia Pacific, and the Middle East and Africa. Combined, the two regions represented more than 80.0% of rural households in 2017. By 2030, this share will be more than 85.0%.
The vast majority of rural households globally will see increases in disposable income over 2018-2030, thereby increasing their appetite for consumption and expanding their purchasing power. An additional driver of rising rural purchasing power is remittances – many foreign workers globally emanate from rural areas in South Asia, Latin America and Africa.
Challenges for rural homes include rural flight, food security, and the logistics of delivery. Many rural locations are experiencing depopulation and economic decline, while it can be expensive for businesses to reach mass consumers.