This is a small series I thought I would start, along side my writing on learnings drawn from’ How to Finance’ . It was actually inspired by a podcast that I was listening to, called ‘ A venture capitalist looks at the world’ . The podcast had the guest talking about changes in the coming world and how start-ups respond to it, but one phrase in particular nudged me into writing this small series. The phrase was ‘Postcards of the Future’ and I thought it would be a good melting pot for all that amazes me and inspires me.
With all that I have read about behavioral economics in the past one year, it sparked an interest in consumer behavior and their irrational thought agencies , that for me has made marketing particularly interesting. I thought that could be a starting point for this series. Pre-pandemic was already seeing a surge in usage of social media, YouTube, gaming, or internet in general because of the jio-wave in India. Reliance Jio has made India the second largest internet user base in the world, accounting for 12% of users globally, according to a Mary Meeker report on internet usage. The pandemic also witnessed a surge in data usage and subscribers, since a lot of things had to be moved online. India currently has a user base of 670 million internet users of which 120 million shop online at present. The internet users are expected rise to 914 million by 2027.
This above mentioned data raises the potential to market one’s product and services in interesting ways and makes market penetration possible at scales not imagined before. Before I delve a little deeper into this, I would like to borrow something that I had read a blogpost on Sajith Pai’s blog recently , named the Indus Valley Playbook. Sajith Pai divides the Indian market intro 3 categories called India 1, India 2 and India 3. India 1 is the top 10 % of the population which earns $~9K per capita on average and account for 1tn economy. These 110-120m people have so far been driving the online consumption. Jio gave a boost to the consumption via India 2 population that earns $~3 K per capita. It is important to note that India 2 prefers vernacular mediums in trying to understand the product(which creates friction for companies if not taken into account), whereas India 1 is a mini depiction of what a western society looks like. India 3 has ~1126m people and has an earning of ~$1K per capita and is similar to ‘Sub-Saharan Africa’.
Internet sure has been boon, and the service providers have created an ability to tap into market like never before. One of things that I have been introduced to, in the last one year, has been the importance of micro-credit institutions for a country like India where ~60% of the population is involved in farming but can contribute only ~16 % of the GDP. This creates a lacuna of missed opportunities which can be improved if addressed efficiently. Here’s where I feel startups working in the agri-tech sector have a little something for all of us to learn and more importantly show us how internet is helping penetrate rural market. Startups such as DeHaat or E-kutir have interesting business models. They are essentially facilitating farmer to consumer transactions via their platform, but, what is important to note is that they are addressing a market where the suppliers don’t have a high bargaining power . They do not even have high purchasing power where they could buy high priced products to increase their yield. So one of the interesting aspects that DeHaat plans to introduce is micro-financing their farmers. This would basically increase their purchasing power for the product that they are trying to sell for increasing farmer’s yields apart from facilitating supply of produce. This would have been a hard to do in the absence of internet and here you are basically marketing your services to India 3 , by increasing their purchasing power through micro-financing. It’s an interesting model and could have the possibility to be scaled across different segments and to tap into the untapped India 3 market.
The other interesting outcome of internet and ever-evolving marketing ideas has been the rise of influencer economy. The past one year has given a push to the rise of influencers as there has been an increase in time spent on phone in the pandemic. Importantly apps like Instagram also provide clarity to the brand using these channels, as it reveals data on user engagement and conversion ratio of customers engaged in the ad. It leaves little room for ambiguity where as using channels such as Newspaper or Television broadcasting doesn’t really give a true picture of user engagement. Brands like Bombay Shaving Company, Dominos, epigamia, Nykaa, Myntra(with its Myntra Insider initative) have exhibited creativity when it comes to marketing their products. Instagram reels have become a popular source for these brands to advertise their products by partnering with comedians who already have a niche audience built around their content. Interestingly ,Instagram and Spotify have made it possible to India 1 and their needs in specific manner as these apps reveal a lot more about their users than was previously available. It helps in segmenting the market and their preferences and makes sure we come across advertisements that remotely match our interests. It is almost as if advertisements today are trying to be relevant to the consumer they are directly hoping to target.
It is these apps and the spaces they create to discuss things such as body positivity, breaking gender stereotypes etc. that also give brands interesting identities to tap into and interesting stories to tell. Fashion startups have ventured deep into this by using models of different sizes and unfiltered photographs to promote their products on an app which apart from all the pretentiousness also craves authenticity. These apps with their 30-60 seconds reels have become powerful mediums for brands to capture their audience and then groom them.
Streaming has seen a sudden rise and is here to stay I feel as it connects with the users in a personal way. It is almost like a podcast , except a visual format and the ability to contribute how much ever you want makes it all the more inclusive. This has also become an interesting way to market, as I came across a LinkedIn advertisement in one of Tanmay Bhat’s streams and I thought , a brand like LinkedIn did not need to market itself in streams that comprised of 18-24 year olds. But I guess you never know!
Though one of the most fascinating things which does not even hamper one’s mental health and progresses the economy is how microfinancing could increase your consumer’s purchasing power and have an indirect impact on women participation in the financial space as well as the employment space. The reason Bangladesh is growing at a fast pace is because of the reach of micro-finance and 97% of its borrowers are women. India hasnt been able replicate that yet, at least not to a scale Bangladesh has done it and maybe these Agri-tech startups are in one way nudging towards that. This could also create scope for allied businesses such as handicraft or vernacular housing. Vernacular housing would be an interesting point of intervention.
These are just a few thoughts that I had with respect to how internet has changed will be changing the way we understand consumer power and their needs and how the stories brand tell today are much more powerful than they ever were.