70% of India's population lives in rural India and the size of the rural economy is at Rs. 12 trillion predicted to go up to Rs.16 trillion in the next few years. Rural India is experiencing the same changes as urban India - changing consumer preferences and consumption patterns, increasing exposure to different lifestyles and products, and increasing purchasing power.

A CII and Yes Bank study indicates that rural retail is set to cross US$ 45.32 billion by 2010. By 2015, this figure is estimated to go up to US$ 60.43 billion. Rural retail is growing at a much higher rate than urban retail and FMCGs are doing brisk business in Rural India. With more than 4.1 million outlets, more than 87% of rural India is still not penetrated by organized retail.

ITC, DCM, Tata, Godrej are some of the major players in Rural India. Reliance, Spencers, Subiksha are extending their reach in semi-urban areas.

Unilever, LG, Duncan, Nokia, Sony Ericsson, Novartis are some of the manufacturers with unique marketing programs and special campaigns are quite successful in Rural India.

Some of the challenges faced by marketers and retailers in rural India are low per capita income, dependence on the monsoons for purchases, difficulties in communication and high distribution costs. Marketers are addressing these issues through the 4A's of Availability, Affordability, Acceptability, Awareness and coming up with innovative campaigns to address the rural segment. Understanding of rural customers and their needs is what will make the rural foray of retailers successful.