30% rural households will show $540 bn spend by 2030

The top 30 per cent of rural households in India will show an annual spend of approximately $540 billion by 2030, says Anand Daniel, partner at global VC fund Accel, about the increasingly aspirational segment that accounts for 52 per cent of rural consumption.“There is a Blue Ocean opportunity for startups building for rural Bharat's top 30 per cent - there is immense potential for growth and innovation in this segment, which has yet to be fully explored,” Daniel said, citing the massive runway for business models with a ‘Bharat' focus. Blue Ocean means a new, uncontested market. Internet penetration in rural India, which is getting modernised in terms of both digital and physical infrastructure, reaches 350 million users and 82 per cent of villages, he noted. Accel, an early investor in Flipkart, Freshworks and Swiggy, is excited about areas such as commerce and healthcare for the sector, Daniel said, adding that education and entertainment are the other two sectors that seem very promising.

While there is talk of a slowdown in rural India as evidenced by slower volume growth in FMCG, increased demand for work under MGNREGA and weak two-wheeler sales, these data points don't show us what's happening with the top 30 per cent of rural households. By 2030, the top 30 per cent of households will show an annual spend of approximately $540 billion. We know that rural India overall is a large consumer market with about $500 billion of annual consumption expenditure from over 915 million people. This is two-thirds of India's population. Interestingly, this rural spend is highly concentrated, with 52 per cent rural consumption coming from the top 30 per cent households.

‘Till now, we have seen the success stories of the Indian startup ecosystem or category leaders largely built on catering to the needs of the urban Indian consumer. Given the surface area of the rural Bharat opportunity, we are optimistic that the next wave of disruption will come from daring builders catering to the needs of that top 30 per cent which is an increasingly aspirational rural India.’ he said.