One of the largest sources of rural household income streams is via remittances from migrant workers who send billions of dollars back home staying far away from their homes, says a new book.
The global flow of millions of migrants who leave emerging countries to work in more established economies - and the remittances they send back home - have become one of the biggest drivers of economic change in the developing rural world, says Vijay Mahajan in his book "Rise of Rural Consumers in Developing Countries".
"One of the largest sources of rural household income streams is via remittances from migrant workers. They might work in cities a few hundred miles from their hometowns, or thousands of miles away in other countries. Regardless of how far they go, they send billions of dollars back home," he says quoting World Bank data.
According to Mahajan, remittances are lifting rural consumers.
"International remittances rose to an estimated USD 601 billion in 2015, with roughly three-quarters of that total flowing back to developing countries, according to World Bank data. The World Bank's revised data for 2014 showed global remittances at USD 592.9 billion, with the Rural Top 10 countries receiving USD 254.8 billion - 43 per cent of the total, with a significant amount going to rural areas," he says.
Mahajan, John P Harbin Centennial Chair in Business at the McCombs School of Business, University of Texas, highlights the expanding consumer power of rural markets in developing countries in his book, published by Sage.
It takes a close look at one of the key stories in
emerging markets: the untapped potential of the world's 3.4 billion rural consumers - 90 per cent of whom live in Asia and Africa.
It book provides a profile of the rural developing world and examines the forces that are increasing rural prosperity, including billions of dollars in remittances from migrant workers. It also includes several examples of innovations and best practices that are allowing companies to tap into this opportunity.
"My purpose in this book also is to showcase the strategies that forward-thinking companies, NGOs, and social organisations are using to reach rural consumers. Those companies have what I call rural DNA: they have developed inclusive strategies that cover both rural and urban residents.
"They have realised that the greatest opportunities for growth can no longer be found simply in developed countries and urban centres in emerging economies. They've tapped into the emergence of the rural opportunity in developing countries," Mahajan says.
The author also writes about the influence of religion in the emerging rural world.
"Beyond faith and values, religion influences urban and rural consumption alike. The religious calendar plays a crucial role in the consumer spending cycle, as do festivals and other cultural celebrations. Religious tourism also brings new money into villages, adding to family incomes," he says.
"The mix of religions, cultural traditions, and beliefs can challenge even the savviest local and multinational brands. Whether it's Christianity or Islam, Hinduism or Buddhism, it's crucial for any company hoping to succeed in the developing world to understand the influence of faith on consumers.
"Companies that fail to do that risk missing out on opportunities to connect with millions of customers and earn their loyalty. At worst, they risk offending those customers and potentially driving them away with advertising that shows disrespect or ignorance of their religion," he writes.
