Social Commerce: Addressing Employment Challenges In The Rural Economy

Rural India has modernized in a massive way, are market leaders missing the chance to respond? In the dawn of social commerce becoming the future of the way Indians shop and connect, are we leaving rural customers behind?  

We spent over 10 years understanding the pulse of the rural customer on the ground and witnessing this evolution. As commerce companies, product and service providers, think about the next billion markets, we believe curated design for rural Indian customers, leveraging rural women as the centre of social commerce and investing in data-driven insights is missed opportunity to make it happen fast.  

Due to globalization, digitization, and government interventions, there is a modernization of rural India that needs to be acknowledged. In the last decade, we have seen major shifts in rural India, from electrification to road development, skills development, advanced efforts for job creation/income generation, but the spike in the modernization of rural India has been due to the advancement of technology – from internet connectivity to smartphone penetration. Rural populations are exposed to technology, global brands, and opportunities. In the last 6 years, the number of smartphone users in India has increased by 15 per cent and is expected to rise 26 per cent by 2022 with an active internet connection, connecting them to the outside world more closely and comfortably. However, based on our ground experience, we know that while rural customers can afford these solutions, they just cannot access them. The rural customer is thriving, evolving, becoming savvier and demanding, but the market has not responded.  

The traditional perspective about rural markets has been linked to notions of extreme poverty, lack of education, lack of finance, poor infrastructure, high costs to reach the rural customer and gender biases. The Indian rural economy has largely been influenced and dependent on agriculture, but it has evolved from manufacturing to infra development, to service solutions. Families are no longer single-income households or even single sector-focused and more and more lifestyles have evolved. Women are not housewives, they are farmers, community leaders, data collectors, government workers and social connectors. Families are investing in private education, using YouTube for entertainment, using their bank accounts for payments, wanting to save time and money by using better appliances. Product and service companies do not see the deep changes, creating a wider divide between the rural and urban lifestyle.  

One of the major challenges has been the customization for the rural market, very little effort has been made by the major product/service providers in terms of investment for going deep and not wide. Lack of a strategic supply chain and customer insights has acted as a barrier between rural India and e-commerce. Who is this customer? What are their demands? What are their pain points? What do they need daily, vs weekly, vs monthly, vs seasonally, vs annually?  

Add to this, the lack of a strong gender lens –most initiatives in rural India to build the supply chains have been short-lived, the digital divide amongst women is the highest. The social commerce industry is highly dependent on technology and hence it is very important that people who are the targeted audience for the same are technologically savvy to make the best possible benefits out of the same. The solutions for changing employment relationships with the rural market have been approached in many ways but not all of them have been successful because of lack of planning and incorrect research and analysis. This denies rural women to be a part of social commerce, they miss this obvious business opportunity.  

There is an opportunity to combine these challenges – connecting women to the digital tools they need to optimize their social connections for the business. A network of rural women who are their own small-scale social commerce solutions, there is an opportunity to provide rural India for a higher standard of living but also generating employment opportunities. Social commerce allows people the village people to work independently within their village, giving them easy solutions and development at an ease. This is a critical opportunity especially for rural women who would prefer to work within their village, level their strongest asset, deep connections to their neighbours they’ve known for generations. Women in the village have been active players on most social commerce platforms as they have a stronger network in the community and understand the household needs as they are the ones leading the operations. 

Factors that have contributed to strengthening social commerce in villages like a strategic supply chain, after-sales service, the easy and on-time flow of goods and service with efficient and fast logistics, generating sales have also evidently generated employment and income for the same people. Rural customers being the subject to their own services here understand the insights better. This has provided them with an opportunity to practically learn the business modules and develop themselves.  

There has been a high demand in the rural community for access to high-quality solutions and this not only provides an opportunity for social commerce to make its way in rural India but also, generates income in terms of executing the deep in the villages. Indian villages are deeply interconnected and would not always allow foreign intervention in their operational process of the villages and hence, it is important to provide employment within the village to not only understand the greater customer needs and insights but also to create a strong and deep hold in the sector. 

Ajaita Shah

Guest Author The author is Founder and CEO, Frontier Markets