Coca-Cola India is experiencing remarkable growth in rural markets, surpassing its urban performance as the beverage giant strategically capitalises on India’s evolving consumption trends. While many consumer goods companies struggle with sluggish demand in rural areas, Coca-Cola India has excelled, benefitting from multiple factors that drive expansion in these regions.
A significant catalyst for this growth surge has been the widening electricity accessibility in rural India. This development has empowered Coca-Cola to expand its presence to around 3.2 lakh villages among the estimated 6.6 lakh villages nationwide. The enhanced infrastructure has played a pivotal role in facilitating the installation of cooling units in stores, significantly enhancing the distribution and availability of Coca-Cola’s products.
Sundeep Bajoria, Vice President of Coca-Cola India’s operations in India, credited the surge in growth to several factors. He highlighted the adoption of the Unified Payments Interface (UPI) in rural areas, which simplifies small payment transactions for consumers. Additionally, the increased penetration of digital technology has significantly heightened consumer awareness, proving to be a major catalyst for expanding the rural market. Bajoria stressed that presently, rural growth is surpassing urban growth by a notable margin of 3%. Acknowledging the challenge posed by inflation’s unpredictable nature in recent quarters, Bajoria outlined Coca-Cola’s strategy to address this issue through a meticulous pricing approach. The brand is focused on ensuring that its products are appropriately priced for various consumption occasions. Noteworthy is their understanding of the importance of specific price points like Rs 10, 20, and 50 in rural areas, as they persist in crafting a portfolio tailored to meet consumers’ needs.
The company astutely leveraged festive seasons, usually associated with increased consumption in summer, to establish a new phase for beverage consumption, thereby boosting demand. Coca-Cola’s collaboration with the ongoing ICC Men’s Cricket World Cup has strengthened this approach. Bajoria emphasised how this partnership aligns perfectly with their overarching strategy of generating more opportunities for consumer engagement.
Despite Coca-Cola India’s remarkable success in rural areas, the company is actively seeking more growth in urban markets to promote premiumization. Currently reaching only 41% of urban households and 32% of rural households, Coca-Cola perceives substantial prospects for widening its market. Bajoria emphasised that as India’s per capita incomes surpass the $2,000 mark, it marks a turning point where convenience becomes a significant factor driving higher consumption, especially in the realm of packaged beverages. The company aims to broaden its presence by targeting around 12 million outlets across the country. As Coca-Cola India progresses, the brand is well-prepared to take advantage of the changing consumer trends. It intends to maintain a balance between its successful expansion in rural areas and strategic efforts to penetrate urban markets and promote premium offerings.
