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A case of ‘disruptive innovation’ that is transforming Rural India
GODREJ CHOTUKOOL
Ardeshir Godrej17 Billion MumbaiMore than 60 countries
Consumer electronics segment in India (‘000 units)
2005 2006 2007 2008 2009 20100
2000
4000
6000
8000
10000
12000
TV setsPCsRefrigerators
Indian Refrigerator Industry
Market Value - Rs. 40 billion in 2010
Unsaturated market (18% in urban and 2% in rural)
Market growth Urban : 7-10% Rural :25%
Trends affecting Refrigeration Industry
According to UN Commission on Sustainable Development, one third of all food in India is lost to spoilage
According to CEAMA, refrigerator penetration in India is only 18%
70% of India still lives in rural areas where electricity supply is limited and power cuts are frequent
No options available for lower income groups
Space is a constraint in rural households
Trends Implications Opportunities for ChotuKool
Food Spoilage Need for refrigeration Demand can be created
Low Penetration Limited access to refrigeration Huge market available for growth
Rural Population Power supply issues
Low purchasing Power
Alternate power options
Create a low cost model
Space Constraint Lesser space available for a refrigerator
Create a small sized product, easy to transport
What am I?
Who am I?
My Family
For whom am I?
Why me?
Cheapest fridge
available
Portable and light
Occupies less space
Runs on battery
Environment friendly
Challenges
Lower the price to increase affordability ?
How should they segment market ?
Right business model?
How should they scale up operations?
Suggestions
Establish Manufacturing Plants
Low cost distribution
Avoid marketing myopia
Clear segmentation
Strengths
Simple design
Less space for manufacturing
Less manpower required
Less components used
Distribution: Community-based model
NGO
Self-help groups
India Post
Micro-finance institutions
Distribution
Structure of the Indian consumer market
Consumer class (Using annual income)
1996 (in mn) 2001 (in mn) 2007 (in mn)
The rich (Rs.215,000 and more)
1.2 2.0 6.2
The consuming class(Rs.45-215,000)
32.5 54.6 90.9
The climbers(Rs.22-45000)
54.1 71.6 74.1
The applicants(Rs. 16-22000)
44.0 28.1 15.3
The destitute(Below Rs.16000)
33.2 3.4 12.8
:
Arthi Divyant Singh
JayasriKanwaljit kaur Gosal
ManimegalaiOmna Jain
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