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Unlocking the wealth for rural grocery markets: An ultimate guide to online grocery business.

By Gursumeet Kaur 23rd July 2021

Grocery markets have been showing quite a high increase in businesses across the globe. Almost all the countries in the world have a fairly good percentage of rural population through which the rural grocery markets are getting benefited. Rural businesses are more focused on selling groceries, fruits, and vegetables as these are the ultimate living essentials for the people residing in those areas.

But, do you think you are making the most from your current physical grocery store business in the rural areas, or do you project your grocery business future to only remain restricted to the rural geographies? I guess not, right? Definitely. Even after being located in a rural area, your grocery business can still perform wonders by pushing its limit to the horizons and serve the urban areas or cities or countries alongside the rural population, seamlessly.

This is the power of digitization. While urban demand for grocery products remains sluggish worldwide, the rural grocery market is growing faster than ever in some of the largest emerging economies. You get enormous options to scale your business online and get highlighted in the global market and be one of the best grocery businesses.

rural grocery market

Let’s see what are we going to look at, today!

Reasons for the increase in grocery business opportunities in rural and urban areas

The rural grocery market tends to have a huge supply in the rural areas as the rural people are more concerned about the daily/everyday needs of their life like food, shelter, and clothing rather than other luxurious items, so no matter how big or small your grocery business is, it will definitely sprint. In the urban areas also, the case is almost the same, the only difference is that rural people tend to buy grocery products of a low range or negotiated price, but the urban people go for both types of price ranges. 

Many physical or offline grocery stores faced a drop in their businesses due to certain reasons at a certain point in time, the very recent example being Covid-19. In such a phase, the online businesses have proved a boon for the consumers which in turn has profited the businesses too, especially the grocery business. Thus, we should encourage ourselves and every small business to go online and actually, never stop growing.

Economists estimate that the rural grocery market has considerable profit and prospects for the grocery & many more industries. Reasons for the increase in grocery business opportunities in rural geographies are:

  • Industrialisation in the rural areas has brought in income stability and has increased the household purchasing capacity. It also facilitates an increase in rural employment in the agriculture sector, thus making these households earn their living.
  • Certain government policies have helped to do away with poverty and unemployment problems in the rural areas, thereby increasing the income of the family as a whole.
  • The changing lifestyle of the rural population over the period. Startup versions of the products are giving way to branded commodities.

Conducting market research to start & scale online grocery business

This is the most important factor in a business in a remote area. Whenever we try to scale a business to more regions or cities, apart from the ones in which we are already serving, we need to understand the upcoming sectors or areas in which we are going to transfer. You need to understand the target customer base for your grocery products. First of all, for taking your business online, you need to create much awareness about your grocery business and start to know what kind of population will actually like to order from you online through web apps or mobile apps and for this, of course, the targeted population will be the one having access to much electricity and obviously the technologies in their areas. Get to know the income levels of the communities residing in the rural as well as urban areas, the purchasing power of the basic family in that community, their needs, and how much they would be willing to spend for that product. This will not only help you identify your prospective customers but their characteristics too, such as age groups, product interests, etc.

rural grocery market

Keeping track of online grocery platform competitors

When going to participate in a race, it’s always advised to keep a thorough check of the other participants to know their strengths and weaknesses which in turn can help us cast ourselves accordingly. In a similar fashion, if you are completely set to rocket-start your online grocery business, just have a quick sneak-peak to other grocery businesses already in place. Mentioning a few of them below:

  • Instacart: Instacart is an American company that operates a grocery delivery and pick-up service in the United States and Canada. The company offers its services via a website and mobile app. The service allows customers to order groceries from participating retailers with the shopping being done by a personal shopper.
  • Gopuff: Gopuff is a consumer goods and food delivery service operating in over 650 US cities through approximately 250 fulfillment centers as of March 2021. Users can order items online or via the Gopuff app and get the items delivered.
  • BigBasket: BigBasket is an Indian online grocery delivery service. The company primarily delivers grocery goods found in convenience stores, home essentials and food supplies to its customers. BigBasket was founded in December 2011 and has its headquarters in Bangalore, India.
  • Grofers: Grofers is an Indian online grocery delivery service. It was founded in December 2013 and is based out of Gurgaon. As of 2018, the company has raised about $535.5 million from investors including SoftBank, Tiger Global and Sequoia Capital.
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Know how Yelo can add value to your Business

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Identifying & retaining prospective customers

Identifying prospective customers or clients is an important aspect of the success of any business. This includes the identification of customers who possess the highest urban & rural grocery market potential. You need to identify the target group for each grocery product; one needs to analyze the purchasing power of the family as a whole; the income level and the average finance or percentage of savings utilized for purchase of grocery; the employment, under-employed, and unemployment scenario of that area; identify the particular age group, and their choices of the types of grocery products and rural/urban products and so on.

Scaling the grocery business and moving towards urbanization, does not mean that you lose your existing customers from the rural geographies because “Every Customer Matters!”. Your existing potential customers could play a key role in pulling in new customers, hence making a chain of potential customers ranging from rural to urban areas. 

The untapped potential of rural e-commerce is getting clearer with the level of digital adoption we’re seeing; the next wave of internet users that are coming online are in rural areas—from the current 18% penetration in rural areas, it’s expected that, by 2022, internet penetration will be as high as 50%. These enablers will mean a much higher CAGR for rural e-commerce than urban, and it is estimated that this market is likely to be a $10-12 billion opportunity in the next four years.

rural grocery market

Building communication strategy

Creating an appropriate communication channel for your customers is the right path to follow when it comes to retaining your customers. Be it rural areas or urban areas, a successful reach to the customers is what the business demands. Communication channels for educating about your grocery business may be banners or hoardings, TV advertisements, pamphlets, etc. but the powerful channels today are emails, social media platforms, digital marketing, and many more. And for you to adopt these powerful digital techniques, you have to take your physical presence of grocery business online. 

How to pick up a pace to launch your online grocery business?

After you have followed the above steps of conducting market research, knowing your competitors, identifying potential customers, and building a communication strategy, the next step you need to take is the smartest decision of pushing your grocery business online from the rural grocery market. Thinking of how? Don’t pressurize your brains!

Apart from providing the best possible information that we can, we come along with the solution to your problems too. We have the best way that you can set up your direct-to-consumer grocery delivery app in exactly no time with Yelo

rural grocery market features

Take a quick sneak peek at the Grocery demo of the platform that Yelo offers.

It would help you to set up your launch via a strong digital presence. Apart from it, we are also offering robust delivery management software that can allow you to make sure that your grocery products reach on time to the desired location. For this, you may check out Tookan as well. Always remember, business decisions taken at the right time can make the time right for your business. It is the time when you should think out of the box and come out of your comfort zone to make your business sustainable and scalable in the market. For more information about how Yelo & Tookan can help you, feel free to connect with us.

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