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The Mobile Revolution Will Be Monetized – AdAge.com

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When I returned in February after four years away, they had multiplied, innumerably. I saw them at chai stands and tin-roofed restaurants, laid on tables between plates of rice and masala dosa; on the seats of rusted buses and crowded railway cars; under fluorescent lights at dusty street corners, casting an eerie glow of their own. In the hands of men and women, the sick and the healthy, the old, the young, and the in-between.

Everywhere in India, I saw smartphones.

In just a few years, India has undergone a mobile revolution. Once toys of the rich, internet-enabled phones are now within easy reach of the middle class and available to growing numbers of the poor. Even at around 25 percent ownership, India is now a bigger market for smartphones than the U.S. and is second only to China in the number of units purchased. Since only a fraction of these new smartphone owners have access to the internet through a home connection, smartphones in India (as in other developing countries) represent a first portal to the digital world for hundreds of millions of people.

But this is only part of the story. The mobile revolution in India is now in a second phase, driven not only by affordable handsets but also by cheap data, thanks to a single mobile operator that is now a household name after just a year and a half of operation: Reliance Jio Infocomm Ltd., known as Jio. The company entered the market in late 2016 with an offer of months’ worth of free calls for new subscribers, with ongoing data fees only a fraction of all other operators’ in the market. Competitors were quickly forced to match Jio’s prices or face irrelevance, and in one fell swoop the cost of voice calls and data in India was slashed and the gates to the internet swung open for millions who had long been excluded.

I heard about Jio from a web developer I met recently in the South Indian state of Kerala. Intrigued to learn that India was little more than a year into an explosion of cheap access, I took to the streets of the city of Thiruvananthapuram to talk to ordinary Indians about how the internet was affecting their lives. Was it delivering on the much-vaunted promises—a transformation in microfinance, medicine, even farming and resource management—or were Indians just swapping cat GIFs and turd emojis like many of us in the West? Ultimately, what I found was a lesson in perspective: We tell the story of the internet as a “global village,” a space where everyone has a common understanding, but outside of the Western bubble it’s clear that assumptions change widely from place to place.

World: open

Under the morning sun at Kovalam Beach, a Keralan seaside resort near the tip of the subcontinent, I watched a line of fishermen singing work songs while standing waist deep in the Indian Ocean, hauling a huge net to shore. Around them a mix of foreign and domestic tourists took pictures with phone cameras, the kind of meeting of ancient and current that takes place across modern India.

At a nearby taxi stand, Manoj, a portly man in a mustard-colored auto-rickshaw driver’s shirt and cotton dhoti around his waist, told me that seeing news through social media gave him a better understanding of life in India’s many states—and that he was now more concerned than he used to be about violence in northern states, especially against women.

Like many of the people I talked to, Manoj’s daily usage was heavily skewed toward WhatsApp and Facebook, where he enjoyed sharing a stream of updates, memes and general gossip throughout the day. In fact, in emerging markets as a whole, the internet is overwhelmingly social: In a 2016 trend report headlined “Smartphone Ownership and Internet Usage Continues to Climb in Emerging Economies,” the Pew Research Center observed that these internet users make greater use of social networks than their rich-economy counterparts.

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Of those who had access to the internet, 82 percent of Latin Americans and 76 percent of Africans reported using social networks, compared with only 65 percent in Europe, it noted—a gap that seems to stem from the fact that in India, at least, WhatsApp, for example, has become a stand-in for the internet as a whole, an all-in-one platform for entertainment and professional networking as well as simple messaging. “WhatsApp is my home on the internet,” says Ishtaarth Dalmia, creative strategist at Indian digital agency Dentsu Webchutney. “It’s where I connect with my co-workers, my boss, my girlfriend, even a local cook or fruit vendor, and then find news as well.”

As a social app that’s light in terms of both memory and data use, WhatsApp is extremely popular across emerging markets. Anyone looking to sell into those markets would be well advised to master it and other messaging apps that have assumed outsize reach and influence. The current video binge taking place in Western advertising is a thing of the distant future here.

“You need to really think through how to deliver your message [in developing countries],” says Ferry Grijpink, a senior partner at McKinsey & Co. and the firm’s telecommunications and media practices lead in Southeast Asia. “It might not be a picture, it might be text based or a small sticker. We see a lot of brands … working with the Vibers or the WeChats to have a specific design of sticker to bring in [to the app]. That’s a very cost-effective, low-megabyte way to do it.”

Connecting with users through mobile platforms allows for what Tom Doctoroff, chief cultural insights officer at brand consultancy Prophet, describes as a “collapse of the purchase funnel,” where the time between when a consumer urge is provoked and then satisfied shrinks radically. But brands need to understand that consumers in emerging markets, as elsewhere, will make decisions based on their own specific cultural and economic context. Those decisions may not be obvious to an outsider: For example, consumers in emerging markets tend to prefer megabrands with product offerings across multiple categories—seen as a stamp of reliability—and favor products offering composite benefits (e.g., “5-in-1” moisturizers) that appear to deliver better value for money.

The overriding theme is that newcomers to both the internet and lifestyle consumption need more hand-holding than Western customers in order to make purchases, due to more general anxieties created by the social and political climate.

“People [in emerging markets] are willing to express themselves and achieve deep emotional satisfaction through a new era of consumer liberation, but it needs to be grounded in reassurance because they are not feeling safe,” Doctoroff says. “The institutions aren’t there to protect them, and they are new to brands, so they need a lot of information on what a good brand is.”

A new economy

Back at the beach, Shekr, a clothing shop owner in his 20s, has turned his smartphone into a mobile payment machine using Paytm, a popular Indian e-payment app similar to Venmo in the U.S. According to Shekr, Paytm has made it easy to take phone-to-phone payments from local tourists and to process card payments from foreign visitors too.

That system may seem like old news to us, but it marks a new level of formalization in the Indian economy, which has traditionally been almost purely based on cash. In the coming years, we’re likely to see the transaction profile from such apps used for credit scoring in emerging economies, according to Grijpink. Another report from the McKinsey Global Institute concluded that delivering financial services by mobile phone could add $3.7 trillion to the GDP of emerging economies within a decade—and since mobile banking dramatically lowers the cost of providing financial services, fin-tech companies can use these new platforms to serve low-income customers and still make a profit. This will likely make it easier for borrowers with a limited banking history to access credit, promoting small-scale entrepreneurship and, in turn, continued economic growth.

In the city again, in the cool of late afternoon, I took a walk through the Kanakakunnu Palace grounds, a park filled with couples, friends and families strolling between the tall wine palms and sprawling banyan trees. The people I talked to here had access to desktop machines: Bijina, a PhD student, and Devika, a teacher, had home internet connections, and had used the internet for years prior to buying smartphones. In our conversation, it was clear that the internet, for them, was a very different place, one with a much broader range of activities than a simple app or two can offer. Both Bijina and Devika used far more websites and apps than any of the mobile-only users I had talked to, although they said they now use their smartphones more often than their home machines. But it was a critical reminder that the experience of the internet is mediated by exactly how we get there.

No shortcuts

Overall, a successful move into any emerging market takes careful planning, research and a willingness to understand such nuances. “It’s not enough to have an assumption that the model [from elsewhere] is going to work in India as well,” says Dalmia, the digital marketer. “You need to trust your agency to experiment, and you need to trust the fact that India is a market for the long term.”

Prophet’s Doctoroff cautions that nothing is free for brands looking to break into these markets, adding that they should prepare for a big initial outlay on advertising and market analysis: “In terms of the insight and research, the ABCs of marketing, the timeless truths are the same,” he says. (Elsewhere, he has written that the most powerful insights are not identifying needs, but resolving tensions—finding a middle way between conflicting desires.) “But the ecosystem of content and how you connect with consumers can be very different as people go online.”

Fundamentally, connecting with the billions of new internet users in the world presents a huge well of opportunity for marketers, but it’s important to recognize that there’s no shortcut to tapping into it. Even established brands may find that the advertising logic they rode to success elsewhere needs to be reconfigured, but that’s the cost of doing business here. Much like China, India is a world unto itself, and it’s far better to embrace its complexity than ignore it. 

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