Dainik Bhaskar-e4m webinar: 'In non-metros, we are not talking about recovery but growth'

The panellists explored how demand will push the economic activities further in the non-metros during the festive season

e4m by exchange4media Staff
Updated: Oct 20, 2020 9:29 AM

Dainik Bhaskar in collaboration with exchange4media Group on Thursday organised a webinar for the series 'Non-metros - Driving the Economic Resurgence’. The series focuses on how Tier II and Tier III cities in India are likely to lead the recovery from the pandemic and emerge as drivers of growth.

The topic for the virtual panel discussion was: 'Non-metros: Buoyant with festive demand'. The webinar highlighted how non-metros displayed higher resilience than metros after the lockdown was eased. The session also explored how demand will push the economic activities further in the non-metros during the festive season.

On the panel were Mr. Girish Agarwal, Promoter-Director, Dainik Bhaskar Group; Ms. Minoo Phakey, Senior General Manager-Marketing, Dabur India Ltd; Mr. Satyajit Sengupta, CCSMO - Sales & Marketing, Dainik Bhaskar Group; Mr. Shashi Sinha, CEO - India, IPG Mediabrands; Mr. Vikram Sakhuja, Group CEO, Madison Media and OOH, and Mr. Vivek B Srivatsa, Head-Marketing for Passenger Vehicle Business Unit (PVBU), Tata Motors Ltd. The session was chaired by Mr. Nawal Ahuja, Co-Founder, exchange4media Group.

Starting off the session, Ms. Phakey highlighted that the growth rate in rural areas was almost twice that of urban areas. “Rural has certainly grown much faster than Urban. In fact, the growth rate is almost twice that of Urban. Now within Urban, it's really metros which have grown the slowest. For Dabur, the healthcare category has grown the fastest, pretty much because the tailwind was so strong towards health care. In the personal care category, the growth is faster in rural and the smaller towns. Urban has actually seen a decline in the personal care categories. And within Urban, tier 2 and tier 3 town classes have grown. Modern trade, which is pretty much urban dependent and is predominant in 10 lakh to 25 lakh plus towns and metros, has come to some pause because of the stores closing down.”

“e-commerce has really grown at a very fast rate. Interestingly, e-commerce, which was very dependent again on the larger town classes, has made inroads into the smaller towns. So, a large part of our salience of e-commerce, for example, used to come from 10 lakh plus — that salience has gone down and the salience of tier 1, tier 2 and tier 3 towns has gone up significantly. So e-commerce has grown five times for us and has become a significant part of our business,” added Ms. Phakey.

Anticipating the behaviour of consumers in both metro and non-metro cities, Mr Sinha said, “The point I want to make is that this is not something temporary and not because of lack of movement in metros as compared to small towns. There is this whole focus on trust around brands. There are companies that have built a certain inherited trustworthiness, and I think people will move towards this. They say there's a price to be paid for getting into such sort of multi categories where brands are not penetrated, and suddenly you see it happening across categories, so, there’s a huge jump up happening there. Historically, we used to believe that the metro consumers behaved in one way and non-metro consumers behaved the other way. I think a stage will come with their ways of looking at brands and their ways of life cycle could be similar.”

Explaining how print bounced back faster in non-metros as compared to metro cities, Mr. Agarwal said, “There was certainly a hit in the circulation of newspapers because of this pandemic, but it was seen more in the metros than the smaller cities. A simple, basic logical fact that all the metros are vertical cities, the building complexes have 500-1000 flats in one building. So once a society decided that nobody will be allowed to come in or go out, thousand copies of circulation of newspapers stop, while in the tier 2, 3, 4 cities, there are small 2-3 storey buildings. So circulation came back much faster.”

Mr. Agarwal also requested the panel to address the non-metro and tier 2 & 3 cities as ‘Bharat’.

“Bharat is actually the entire country. Barring these 7-8 metros which represent around 10-11 crore population, 90% of India's population live in Bharat (non-metros). Bharat is all about growth. In fact, in Bharat, we are not talking about recovery but growth. And there are brands like Dabur and Tata Motors, they all are talking about growth. In metros, the situation is different and gloomy. Hence, people are talking about survival.” 

“One good thing about the newspaper business is that we are a 100% response driven business. We go through a ‘Sita Pareeksha’ (test) on a daily basis. When you release the ad in the morning, you want the response by evening itself,” he further said.

Speaking about Tata Motors and how rural has been driving growth for the brand, Mr. Srivatsa said, “Rural has been driving growth for the auto industry for the last three years, it's not anything to do with COVID. In fact, rural has been growing much faster and metros, to a large extent, actually had flat growth. The other aspect we also see is about the reverse migration that combined with an overall difference in mind-sets of customers if anything is going to accelerate the growth further. For Tata Motors in specific, we've had an equal increase both in metros and non-metros because we had a little bit of a small base last year and we've had a rebound which is really more accelerated than the overall industry. But if I have to talk specifically about Tata Motors, the growth seems to be higher in the larger towns, not from a demand perspective but more about our own supply situation where we are having to prioritise the larger dealers in the metros, but over a larger period of time there is no doubt that Bharat is what is going to drive growth, accelerated because of COVID and the change in mindset driven by the reverse urbanisation.” 

Mr. Srivatsa further pointed out that the appetite for risk of the financial agencies or banks will gradually expand in the smaller towns, and will also be influenced by the improved economy in the smaller towns. There'll be a lot more confidence in the unorganised economy. “For me, the faster infrastructure catches up, the faster the growth will be. When I say infrastructure here I mean automotive retail infrastructure in terms of showrooms, manpower availability and how banks are able to disperse loans faster in Bharat areas. We see banks really accelerating on eKYC options for loans. So these are the areas which are really holding bonds. And I think in the next six months to one year, we'll see an explosion in terms of the retail infrastructure in the Bharat towns, and that itself will promote a lot of growth.”

According to Mr. Sakhuja, rural India has 35% double income family vs. 26% in urban India. 

“One of the stories I think right now which really needs to go out is just a very basic reminder to people that two thirds of India's population lives in rural areas and if you have to look at non metros more, Bharat will be more. 53% of household consumption expenditure comes from there. If you have to look at the rural contribution, it's anything from 50 to 67% of FMCG categories, 60% of fans, 50-51% of two-wheelers, 33% of white goods and maybe smartphones also and only about 15-20% for cars but that's also growing. We have seen that rural literacy has increased from 65 to 74%, female literacy has increased from 54 to 65%. You'll be surprised to know that rural India has 35% double income family versus 26% in urban India. Then 41% DINKS, double income and no kids in rural versus 22% in urban. There are 35% overall of women working in rural versus 21% in urban.” 

Sharing about digital consumption in rural and urban areas, Mr. Sakhuja said, “Now, digital penetration in terms of pure numbers is about 34% in rural and 53% in urban. It looks like rural is going to overtake urban at this point in time. If you look at video consumption, two thirds of the video consumption is coming from rural areas. Two thirds of Google searches are coming from rural areas. From an online shopper kind of standpoint, at this point in time, urban is more than rural, but it's quite likely that that might even get overtaken in terms of full GMVs.”

Speaking about Dainik Bhaskar, Mr. Sengupta highlighted that regional newspapers did well in terms of circulation as compared to English newspapers. He said, “It's very apparent that regional newspapers, especially Hindi newspapers, got back the circulation pretty fast. And we are already on 85 to 90% of circulation. This is a fact, which has helped us in the entire covid period. Yes, but this time it's been very stark, there’s difference between circulation in the metros and circulation in non-metros. And it has been so stark that advertisers have realised that there's a difference in kind of sales that is happening in two parts of the country - Bharat vs. the top 5-6 metros. We really tried to facilitate this information in various ways. The fact that job losses have been less, self-employment is more in non-metros. Also, the sheer fear factor has been very less in these areas that we represent. The market opened up much faster, people are going out shopping, and therefore the uptake that is happening it's much higher.

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