Rural demand boosts economic growth for brands

Posted on 04 September 2009 by BMMBoxer

Bharti Airtel Limited, India’s biggest cell phone company recently highlighted the demand patterns of the urban and the rural consumers and its impact on their balance sheets.

The company officials say says rural demand is still strong despite a global economic downturn and widespread drought at home. Growing consumer demand in rural areas — where about two-thirds of India’s population still resides — is a major reason the country has been able to weather the global economic turmoil better than most countries.

Sanjay Kapoor, the deputy chief executive officer of Bharti Airtel, said climbing demand from new customers, most of whom are outside major cities, is showing few signs of slowing. Bharti Airtel said profit rose 24% in the latest quarter.

Bharti’s optimism is an encouraging sign for those who have bet heavily on countryside consumers continuing to thrive. Over the past year, many Indian and foreign companies marketing everything from shampoo to refrigerators to motorcycles have begun seeding rural areas with sales offices, hoping to ride a fresh wave of consumer spending.

The unexplored rural markets, according to the company is where the market and growth lies.

Bharti Airtel’s profit climbed 24% in the three months ended June 30 to 25 billion rupees ($510 million) as its revenue rose 17% to 99.42 billion rupees. In terms of new subscribers, it was Bharti’s best quarter ever as it added 8.55 million customers.

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