Text | Eric Wang
"Woe, where blessings depend; where blessings lie, where misfortunes lie."
This sentence comes from the fifty-eighth chapter of Lao Tzu, which means that a thing itself has two sides, and a bad thing may become a good thing from another point of view, and in the view of Chen Weibang, the head of marketing at UC Ads, this sentence can be said to be the best summary of the Indian market.
In the overseas industry in 2019, Indian nuggets are definitely one of the hottest topics, Pew Research Center data show that in India's 1.4 billion people, the smartphone penetration rate reached only 22%. Judging from this data, the Indian market seems to have a huge demographic dividend to be developed.
However, this is not the case, in the dialogue between Morketing Global and Chen Weibang, Chen Weibang interpreted the current Indian market from the perspective of advertising and marketing in the Indian market.
<h2>It is a pity to eat it tastelessly and abandon it</h2>
In the eyes of most people, India, as the world's second most populous country after China, its purchasing power and consumption potential are self-evident, and it has become a must for global enterprises to expand overseas. In the context of the fading of the global Internet traffic dividend, India has a huge population size and a large number of new users of the Internet, which can be said to be one of the few virgin places.
In fact, the Indian market depicted in this view and the Indian market faced by Chinese companies going abroad can be said to be diametrically opposed. Chen Weibang pointed out that "to understand the Indian market, we should first know how poor it is."
In BCG's "New India – Many Factors Changing Consumption", the Indian market is divided into 5 classes based on annual household income, and it is predicted that from 2016 to 2025, the proportion of the highest-income elite families will increase from 2% to 5%, the proportion of wealthy families and wealth-seeking families will also increase by 5 percentage points, and the proportion of the lowest-income strivers will drop sharply from 31% to 18%.
Judging from this forecast, the Indian market can definitely be said to be fertile ground for hope. But once the criteria for dividing the BCG report are clarified, there is a good chance that there will be a huge reversal of opinion: only $30,000 of annual household income can be included in the elite households that the BCG report is considered to have the highest spending power.
A simple horizontal comparison shows that 30,000 US dollars is about equal to 200,000 yuan, in fact, according to the details of the average wages of employed personnel in the city in 2018 released by the Beijing Municipal Bureau of Statistics on May 30 this year, the average annual wage of employed personnel in urban non-private units is 145766 yuan; the average annual wage of employed personnel in urban private units is 76908 yuan. According to the calculation of more than 2 laborers in a family of three, the average household income in Beijing can be said to have reached the elite level of Indian society.
Under the influence of social issues such as the caste system, the gap between the rich and the poor in Indian society can also not be ignored. Credit Suisse report shows that India's Gini coefficient continues to climb, this year has reached 0.854, the gap between rich and poor has further widened. According to the United Nations standard, more than 0.4 is a serious inequality. The richest 1 percent of India's population holds 51.5 percent of the wealth, while the poorest 60 percent own only 4.7 percent of the wealth.
In Indian society, the elite family population accounts for less than 3% of the total population, which means that the consumption level of the entire Indian market may be far lower than that of Chinese overseas companies.
Another not-so-good news is that the most spending people in this part have been taken ahead of the curve.
Long before Chinese companies entered the Indian market, giants from The European and American markets such as Twitter, Facebook, Amazon, and WalMart have begun to open up the Indian market. India's most spending power of the population, almost all belong to the high caste population, well educated, have a relatively good level of English, and even a large part of the population has had experience in Europe and the United States, so these platforms have achieved a full range of mental occupation of this group of users.
Therefore, the Indian market left for Chinese overseas enterprises has become slightly chicken. Although the market is huge, there are too few users with spending power, so it is difficult for companies to explore the Indian market, and it is difficult to obtain good ROI data in the short term; but from another point of view, the potential of this land is very huge, and the GDP growth far above the global average shows that it is absolutely valuable to develop this land.
<h2>How to eat chicken ribs</h2>
"A large number of Chinese overseas companies should enter the Indian market after 2015." Chen Weibang pointed out.
In fact, UC has entered the Indian market since 2009, and Cheetah Mobile, Eggplant Quick Pass, etc. are the first batch of players involved in the Indian market, which is actually in line with the needs of the Indian market at that time. In 2015, India's mobile Internet entered a stage of rapid development, but its infrastructure construction is still relatively backward, so users have a large market demand for tool applications.
However, with the rapid development of the Indian economy, the gap of backward infrastructure will not always exist, and if you want to continue to cultivate in the Indian market, you must adjust your playing strategy. Chen Weibang pointed out that Chinese enterprises going to India can be divided into two categories, namely, large enterprises with sufficient resources and small and medium-sized enterprises with relative shortage of resources. The way these two types of enterprises play is, first of all, fundamentally different.
And here again involves a place where the Chinese and Indian markets are very different. "It's hard for SMEs in the Indian market to survive." Judging from the performance of the advertising market, a large part of China's advertising market is supported by small and medium-sized enterprises, while in India, most of the advertising market is the giant enterprises of the industry's top 500 or the global top 500. This means that in the Indian market, the living space of small and medium-sized enterprises is very squeezed.
This is also the case, companies with sufficient resources can do long-term fishing in India, and they can prioritize the pursuit of user growth in the short term without considering large-scale commercial realization. Taking Ali UC as an example, they have fostered content short content community products, including Vmate, through various means such as investment and financing, innovation incubation, etc., and strive to create a content ecosystem with sustainable productivity with innovative models.
But for small and medium-sized enterprises, it is very difficult to survive in the Indian market, and it is difficult to achieve a large amount of user growth in the form of burning money in the short term into actual returns, Chen Weibang bluntly said, many small and medium-sized teams in the Indian market are running to the idea of being acquired by large companies.
After clarifying the current situation of the Indian market, Chen Weibang gave several suggestions for the situation of Chinese overseas enterprises in the Indian market.
In the case of high-value users being occupied and difficult to leverage, Internet companies going to India should first make it clear that the essence of their survival is to acquire users, not to pursue short-term benefits. In the case that the market of high-value user groups has become a red sea, it is similar to the idea of domestic layout sinking markets to tap other groups through the localization operation of content.
Chen Weibang further disassembled the localization of content needs, in his view, the content needs of Indian user groups have 3 dimensions: one is language, the other is culture, and the third is technical adaptation.
1. Language
The main language families in India are Indo-European, Sino-Tibetan, South Asian, and Dervida, with about 2,000 languages, of which 55 have their own scripts and literatures. The 19 well-established languages with their respective literary treasures are designated as the official languages of India.
This means that in addition to Hindi and English, India has a deep demand for other types of multilingualism. If the product can meet the language needs of many people in different parts of India who have not received lingua franca education, it will naturally gain a lot of popularity for the product.
2. Culture
In India, the cultural needs that are most worthy of the attention of overseas enterprises are mainly 3+1 categories.
First, sports, cricket is popular in India, and basketball, wrestling, football and other sports also have a large audience. A few months ago, Dream11, India's leading online sports gaming platform, just received hundreds of millions of dollars in funding.
The second is horoscope divination, in India, both men and women, young and old, have a strong interest in astrology.
The third is Bollywood, which is characterized by singing and dancing, lasting more than 3 hours, and the influence of Bollywood movies in India is everywhere. Not just a film, but also a representation of Indian culture.
The last plus is politics, where Indians, especially elites, are very sensitive to political news. At the same time, democratic elections are held every year, large and small, large and small, which also provides a lot of material for the media.
3. Technical adaptation
Although 4G technology has been further popularized in India in recent years, problems such as poor signal and slow network speed are still common in many regions. Therefore, the demand for tool applications is still objective. Products still need to be optimized for such problems and basic technical adaptations.
From the perspective of advertising and marketing, Chen Weibang also made some suggestions from the experience of the past few years.
"Many advertisers in India still continue some of the habits of past print media when they run advertisements. In the print media era, many advertisers will buy cover ads under the front page, and in the Internet era, they are willing to buy open screen, interstitial (interstitial) and application home page banner ads. Chen Weibang introduced. However, in the domestic market advertising, although the opening screen and banner position advertising is still very important, it has long been out of the category of his indispensable.
This means that some of the delivery thinking in the Chinese advertising market is already a bit ahead of the Indian market. If Chinese advertisers blindly follow the domestic delivery logic, it is likely that they will not achieve the desired results.
India digs gold, the road is obstructed and long
The gap can only be truly felt when confronted with superheroes like Facebook and Google. The Silicon Valley giants who embarked on the journey of globalization early on have almost achieved global hegemony in the Internet industry.
Chen Weibang summed it up in this sentence: "In the Indian market, on the track of advertising monetization, Chinese companies going to India are not real competitors. "Compared with the Silicon Valley giants, the exploration of Chinese overseas companies in the Indian market still has a long way to catch up.
But Chinese companies going abroad are by no means without a chance of success. Halfway through 2019, in the center of the Internet world, 5G technology has the potential to rain and wind. India, where its economic development is relatively lagging behind, is not the center of the storm, which means that there is no possibility of "dimensionality reduction" in the struggle between China's overseas companies and Silicon Valley giants. At the same time, Chinese Internet people have exercised a stronger ability to adapt in the fierce competition in the domestic market.
In a sense, the gold-digging journey of Chinese companies going abroad to India has only just begun.