Rural India, with a population of over 740 million spread over 640,000 villages, offers as much potential for goods and services as the urban markets. While FMCG marketers have been quick to seize this opportunity and have already made significant inroads into rural markets, their services counterparts have a lot of catching up to do. This article examines the potential offered by rural markets for services, strategies to be adopted by services marketers for being successful in rural markets, and success stories of some of the early movers.

The services sector contributes close to 60% of India's GDP, and has evolved as the major sector of the Indian economy. Marketing of services requires a totally different approach as opposed marketing of tangible goods, the nuances of which marketers are still trying to master. Their efforts in reaching out to rural markets have been more by way of trial and error.

While there are several definitions, the one which is widely accepted is "those markets which are not urban." This includes both rural and semi-urban markets. For the sake of clarity, a village is defined as a revenue unit with a population less than 5000. (Some villages have a population as low as 200).

in India, there are 642,000 villages spread over an area of 3.5 million sq km. While agriculture used to be the major source of income in rural areas, over the past 10-12 years, the dominance of agriculture has been rapidly declining. The contribution of agriculture to India's GDP was less than 20% in 2008-09. There is a sizable population of self-employed persons in the hinterland and quite a few of them are into services such as repair and maintenance of motors and pump sets, televisions and other electrical appliances, farm equipment, tractors and two wheelers. Some are also engaged in other services like hospitality, transport, entertainment, etc.

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