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Perspectives from India

Insights: Indian Digital Industry 2014

Insights: Indian Digital Industry 2014

Santosh Kumar, Co-founder, Webitude and Head –Digital Marketing, Digital Quotient

Jun 30, 2014 5:51 PM

India has witnessed tremendous digital expansion in the past decade, experiencing an exponential growth of 100 per cent within a span of three years. Multiple platforms and tools have emerged giving dynamic opportunities for digital to thrive. With the advent of smartphones, last year we saw 14.2 per cent growth of internet traffic through mobiles and tablets. To access the internet, consumers no longer depend on desktops or laptops, they are digitally active 24x7 with mobile devices like smart phones and phablets. The mobile industry has witnessed a 20 per cent quarter on quarter growth in its internet usage. Interestingly, more than 50 per cent of active internet users access internet over their mobile phones.

In 2013, out of 110 million mobile internet users’ rural Indians accounted for 25 million and 85 million were from urban areas. Interestingly, across both urban and rural India, over 50 per cent of the active internet users are accessing internet on their mobile, apart from other sources, indicating that there has been a huge uptake in consumption of the mobile internet medium. Due to the increasing demand in ‘Value for Money’ segment, the median price of a handset has fallen which has attributed to the reduction in prices of phones with advanced features.

The rural mobile phone market has huge market potential, brands like Monsanto adopted SMS and IVR Solutions to reach such users. Digital Quotient developed a large scale IVR system for Monsanto with outbound calling in multiple languages to overcome the challenge of communicating with the farmers due to connectivity and language barriers. This resulted in generation of more than three million customer calls for the brand.

The social media growth story is inspiring - given how in the last few years it has emerged as one of the most popular platforms with 100 million active users. According to a recent Forbes article, “84 per cent of India’s Facebook users are accessing the site from their smart phones. Facebook is customising apps specifically for the Indian market. It recently rolled out a missed call capability, something that does not exist in the U.S. Facebook is also working with marketers in India to help businesses understand the word-of-mouth, advertising power of social media.”

Twitter is considered as the second most important channel due to the presence of majority of influencers like sportspersons, movie actors, artists and politicians. A trending topic on Twitter is perhaps one of the most coveted benchmark. In DQ, We have done twitter outreach campaigns for more than 20 brands and have trended at both India and Worldwide level which has helped brand not only harness reach but also spike in their brand conversations.

Although India is set to become Facebook’s biggest market in terms of users but translating the same into ad dollars may not happen anytime soon. The biggest challenge for Facebook in India going forward would be to convert some of the companies to spend regularly on social media advertisement. Google also faces a similar challenge, it earns revenue around US$ 330 million annually in India. Also, Google is not just a search engine network — it has YouTube for video ads apart from search based advertising and Google Plus - quite established even in a nascent stage.

When we look at the evolution of YouTube - the social video sharing platform, it was not as famous as it is today when it was acquired by Google. In 2009, it was a loss making business for Google due to high operational costs and within a span of 4 years the tables were turned around. It was estimated YouTube would earn ad revenues worth US$ 5.6 billion, by the end of 2013, for Google. The world of digital is increasingly adopting videos as a means of spreading the message virally. Videos consumption of significant proportion of Youth is on a digital device and not on TV. The explosive growth of video advertisements and enhanced internet speed on smart phones has made video streaming convenient for its audience; its Indian audience grew an astounding 27 per cent in the past year. Local content is distributed mainly through the YouTube platform dominated by Bollywood.

Currently Web, Mobile, Social and Video are the major drivers of digital space. Indian digital market has a huge online population to cater, which in turn has boosted ad revenues, the total online ad spends for 2012-2013 was Rs 2260 crore which accounts for 10 per cent of the entire Indian advertising budget. The youth in the country are enchanted by the web as they spend maximum time online via social network. Blogs are another fastest growing category on the web. This has scaled up advertisements making India the fourth largest searchers in the world.

Social media websites give ecommerce players diverse opportunities for attracting audiences and turning them into friends of brands/loyal customers. Social media today is not just about getting maximum number of likes but is now more inclined towards audience engagement and positive dialogue. Companies are using social media to generate leads for sales and create recalls via targeted ads. Huge population size and demographics are the driving force behind the incredible growth of online retail in comparison with the traditional brick-and-mortar retail sector. India’s US$ 13-16 billion retail e-commerce industry is currently dominated by the travel sector, which accounts for 70 per cent of e-commerce in India. Online consumer goods have attracted significant media attention as renowned global ecommerce firms such as eBay and Amazon seek to establish a more robust presence in the country.

The increasing need to deliver value and ROI will demand more insights and innovation and there will be more specialisations. Social media initiatives will become more integrated with marketing programs, customer service efforts, or with internal communications programs. Companies need to focus on to support a coherent and sustainable social media strategy inclusive of the right data generating value and empowering employees to engage with communities.

With the fast paced technological development, organisations have to be flexible and adopt platforms that consumers are shifting towards. Businesses will be challenged adapt to customers usage curve and deliver them with the content they want yet generate revenue streams while capturing market share and monetising emerging channels.

In the coming years, companies delivering integrated campaigns over multiple platforms will enhance value to marketers. We will witness a lot of mergers and acquisitions as the strategy is towards providing integrated services which is coming up as the mantra of surviving in the Digital market.



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