India’s backward backwaters have been on the forefront of global corporate thinking recently. Everyone from Toyota Motors to General Electric and Metro has been sending spies into the subcontinent for the first time to investigate the values of village people. Rural India is where most of the country lives, but until recently few multinational companies thought of it as a potential market. Its home to more than 600 million people but very few real consumers was the thinking.

Unilever first cracked the market in the 1980s with sachets of shampoo and soap that could be transported easily and sold in the village general store for one rupee each. Few companies could follow suit though. Delivering anything to villages with no roads or electricity was tough, finding a product villagers can afford after you add the cost of delivery seemed near impossible. It looked like it was a market for social products, like micro loans, rather than profit. Then came cell phones. Unprecedented low call rates and a nation-wide roll out of new cellular towers brought what had once been considered a luxury good to the countryside. Even the cellular companies that were betting billions on the rural market were surprised by the surge in demand from farmers.

The phone companies are still adding more than ten million subscribers every month. Even though they may spend less than $5 a month on their phones, hundreds of millions of new rural subscribers add up to real money. These consumers that everyone had been unable to reach are generating billions of dollars in revenues for the largely foreign-owned phone companies. First micro loans, then cell phones, now what? As with all products and services it comes down to price and distribution.

How do you make a product affordable to people that make less than $2 a day and spend most of their income just feeding their families? Then how to you get it to tens of thousands of villages in India at a price these consumers can afford? One thing to remember is that rural India has a lot of pockets of wealth. Each village may have a few relatively wealthy families that can buy most things a city consumer can if you can get to them. I remember meeting one farmer/entrepreneur in a village in rural Maharashtra who spent more on his cell phone that I do working for a multinational corporation in Mumbai.

He had a field, a flour mill and two tractors he would rent out. He may have had buffalos in his home but he also had money. Many multinationals have tried with mixed success to reach out to these hundreds of millions who have a bit of cash. Unilever’s “Shakti Lady” program that has village women going door to door explaining and selling products has not become as big as Unilever had originally anticipated. Meanwhile, many a grand plan for Internet country kiosks that would become hubs for product orders, telemedicine and even entertainment have failed because of bad Internet connections and power outages as well as computers that could not stand up to rural wear and tear. Still, there has been an unprecedented convergence of interest from governments, NGOs and local and multi-national corporations to find new ways to reach out and help the rural consumer here.

The excitement about rural opportunities has spurred new innovations for products and services created specifically with the less affluent Indian consumer in mind. Phone companies have created new services aimed squarely at the hard-to-reach and often illiterate rural consumer such as dialing up music through your cell phone. Google is developing online bulletin boards that can be used by villagers that don’t know how to read or use a computer. Maruti Suzuki is wooing village elders to sell its cars while Hero Honda has a fleet of service motorcycles that can reach villages without roads.

The way products are distributed has also required some innovation. Many multi-nationals are trying to reach rural India through established networks of micro-lending and self-help groups. They are using women’s groups that gather regularly to borrow money for micro-businesses to sell everything from cell phones to cow insurance. German grocery-store chain Metro has tapped SKS Microfinance, one of India’s largest microlenders, to reach out to closet-sized mom-and-pop stores.

The company, which is only allowed to wholesale in India, delivers groceries to the front doors of the small stores in the state of Andhra Pradesh after SKS screens them and lends them money. Another innovation in reaching the rural consumer that seems to be taking off is a kind of rental model. Most rural consumers can’t afford the money it takes to pay the full amount for some products that could improve their lives. But they would be willing to rent the products for a small amount per day. Few can afford solar lamps, for example, but many can afford to rent them for five rupees a day. This model not only brings a much-needed product to a less affluent consumer but also creates a new business in the village.

I once watched one women’s group in rural Maharashtra explain why they wanted to buy a washing machine they couldn’t afford. While they used to consider a washing machine a luxury for rich, city ladies, they figured they could make it into a business, washing their neighbors’ clothes for 20 rupees a load. As in all businesses, many attempts will fail but the few multi-nationals that can find the right products, price and distribution model to reach these consumers will be tapping into a giant new market that can only grow.