Challenges in Rural Distribution

The development of the nation largely depends upon the development of the rural population.

FMCG companies also face several challenges that result in demand-supply gaps, increased distribution costs and wastage. However, with the growing economy, substantial opportunities have emerged for FMCG brands in the rural sector. According to NCAER (National Council for Applied Economic Research) study, the rural sector is growing at a CAGR of 3-4%. There’s a rising demand for products such as soaps, talcum powder, oil, tea, cigarettes, and hair oil, whose rural market shares crosses 50%. The fact that the capital expenditure by rural consumers is 63,500 crores against 49,500 crores by urban consumers is indicative of the growth rate and participation of the rural population.

Fragmented Distribution Channels:

The local distribution structure is fragmented in nature that raises the supply chain costs owing to redundant intermediaries affecting the distribution cycle. This is eliminated by establishing a strong network of distributors. They in turn appoint stockists and sub-stockists in order to cater to the locality-specific demands.

Heavy transaction costs:

Due to ineffective communication technology FMCG businesses face severe challenges. Issues such as demand forecasting leading to multiple handling and wasteful interventions across distribution channels.

Wavering Purchasing Capacity:

There’s no purchasing power parity across the rural belt which limits a company’s capacity to segment, position, and target products. This makes it difficult for companies to formulate effective pricing strategies. Nevertheless, retail players adopt alternative approaches to experiment and learn best practices. Although these challenges concern the future of FMCG in the rural belt, businesses are evaluating alternate mechanisms to streamline operations. They are weighing roadblocks and establishing a mechanism that simplifies distribution management to reduce costs and improve efficiency in rural space.

Distribution Problem:

Effective distribution requires village-level shopkeeper, taluka-level wholesaler/dealer, district-level stockist/distributor, and company-owned depot at state level. These many tiers increase the cost of distribution. Rural markets typically signify complex logistical challenges that directly translate into high distribution costs. Bad roads, inadequate warehousing and lack of good distributors pose as major problems to the marketers. Out of the above all the biggest challenge what marketers face is making products available i.e distribution. Due to various constrains like poor road connectivity, high cost, widely scattered area have thrown biggest challenge in front of marketers to make product timely available for rural market.

Some major challenges for rural markets are widely dispersed i.e. large number of small market, dispersed population and poor road connectivity, low density of shops per village, inadequate banks and credit facility, poor storage facility, low investment capacity of retailer, poor communication of buyers, higher bargaining, poor visibility and display of products on rural shop.

Multiple Challenges For Channel Partners

High Inventory Risk
High Inventory Risk
Low ROI
Low ROI
Block Working Capital
Block Working Capital
Prolonged Replenishment Cycles
Prolonged Replenishment Cycles
High Logistics Costs
High Logistics Costs
Limited Assortment Availability
Limited Assortment Availability

Mitrakart's support system for Rural Channel Partner's

Mitrakart extends the supportive hand to all the distributors by directly connecting with all the brands and delivering large category of products at their doorsteps. Mitrakart provides one stop shopping solution for all the distributors need at their fingertips which reduces the transport cost, more stock replenishments and no blocked working capital. Mitrakart promises a good ROI for all the channel partners by reducing the dependency of the wholesalers. Since its order based no chances of higher inventory. Mitrakart links the retailers and distributors with the technology where the order and delivery mechanism flows smoothly. Mitrakart provides complete organized order and delivery system process at their fingertips.

Better ROI

Better ROI

Mitrakart’s aggregate model provides an end-to-end Plug n Play Rural Supply chain Stack Solution which reduces the cost and expenses which provides a promising ROI

Business Growth

Business Growth

Mitrakart's aggressive distribution and supply chain model supports in stock rotation and replenishment's which help's the rural channel partner's double the business growth and make more profits

No Inventory Risk

No Inventory Risk

Mitrakart's supplies totally based on the order's received from the RCP's which ensures that no inventory dumped at RCP point , no investment gets blocked as well as product quality is well maintained at all levels

New Retailers

New Retailers

Mitrakart Micro entrepreneur's support's the distributor's by enrolling new retailers as well as generating orders to the RCP's

Technology at fingertips

Technology at fingertips

We provide large category of products which they can view and order through their mobile screen it's all at their fingertips as well as pay through multiple online payment gateways.

Doorstep Delivery

Doorstep Delivery

Mitrakart deliver's through the tech enabled platform to the RCP's doorstep. RCP's need not move out of their WH. They can view the order movements and delivery time at their fingertips.