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Thursday, 11 April, 2002, 16:46 GMT 17:46 UK
Electrical goods makers eye rural India
Huts in rural village
People in rural areas have increasing spending power
Electrical goods companies have been stepping up their efforts to sell more products to people living in rural parts of India.

The move is an attempt by the firms to target a growing market, and offset falling sales elsewhere.

Colour televisions, refrigerators, air conditioning and even DVD players are being marketed to people who have never bought such items before.

Some companies report as much as 35% of sales coming from semi-urban and rural areas, but they want to increase that figure to 50% over the next two years.

Growing force

Samsung has rolled out its 'Dream Home' roadshow which will visit 48 towns in 100 days in an effort to increase brand awareness of its products.

And Korean-owned LG Electronics is also among the many companies aiming to increase its sales in these areas.

LG's marketing director for India, Pradeep Tongatta, told the BBC's World Business Report that there was money outside the urban areas.

"The economy of the country depends upon the agriculture," he said.

But the lifestyle of people living in rural areas is changing and they are increasingly interested in electrical goods.

"Basically it is the low-end products which go into these markets," he said.

He also believes that once electricity supplies are improved, the demand for air conditioning will increase.

Special products

But finance remains a concern, with loan recoveries being an issue and the cost of finance in rural areas staying high.

Some companies have launched specific products for the rural market.

Philips India has introduced a radio that runs without batteries or electricity - wind a lever for a minute and it runs for half-an-hour.

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News image Pradeep Tongatta, LG Electronics
"The economy of the country depends upon the agriculture."
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