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Wednesday, October 28, 2009

Match Point: How to Reach Rural Markets

By Richard Woodbridge

Editor's Note: This post first appeared in the India Development Blog.

Question: Which manufactured consumer product has the deepest market penetration in rural India?

Answer: Matches

In fact, 97% of rural households purchase matches on a monthly basis. Matches are a unique product because of their high, constant demand and low price point.Their ubiquitous presence provides fascinating insights into India's rural distribution networks, and offer potential ways to inform and interact with India's relatively untouched market.

Several innovative businesses with rural focus have floundered because either their message or their products failed to reach the end-user. One of the largest barriers to introducing new products into rural markets is the lack of reliable distribution channels. Matches, however, have probably the most pervasive distribution network of any manufactured consumer product in India; they find their way to every village and nearly every household, regardless of how remote or how poor.

What is more interesting is that most of India's matches are manufactured in southern Tamil Nadu, and are sold as far away as Jammu and Kashmir. To understand match distribution in India is to understand India's most basic, underlying distribution system. How do they reach the end-user? How many distributors do they go through? How long does it take? How much margin is added to the price of the box of matches each time it exchanges hands? Understanding how matches reach the rural consumers from Kashmir to Kerala can provide valuable insights for scaling up other products and services.

Matchbox distribution can be relevant for product piggybacking, whereby manufacturers hitch a new product to established distribution channels.Piggybacking is becoming an increasingly common way to deliver products and services to the base of the pyramid, allowing for a broader reach in rural areas at a reduced cost. Are there any products or services that can piggyback on matches? 

In remote rural communities, where television, radio or even street names are almost non-existent, relaying information is a pressing issue. Matchboxes may contain the solution. The typical designs on most matchboxes in India show only the manufacturer's logo and some text about the contents. What if that space was used to relay information? Imagine the possibilities of spreading new health/educational information or advertising to 97% of rural families on a monthly basis. Simple pictorial designs would pique interest and accommodate India's vast differences in literacy rates and languages. Awareness of important topics such as the installation of chimneys to reduce smoke inhalation or cleaning and covering water containers to prevent stomach ailments could be spread to households across India, and potentially save lives. 

Matches' universal presence in rural villages provides unique opportunities to reach and interact with India's underserved market. By tracking their distribution from manufacturer to end-user, we can assess the potential for piggybacking additional products and for designing innovative messaging of crucial information. Sometimes, taking a closer look at even mundane objects can spark innovative solutions and approaches to serious challenges.

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