India has been on a digital-first trajectory for a few years now. However, the ongoing pandemic has expedited the digital movement faster than expected. Indian consumers have embraced digital technologies, and in order to keep up with demand, companies have had to jump on the bandwagon.
As of January 2021, India has a population of 1.39 billion, with 35.2% of that population living in urban centers and 64.8% in rural areas. In May 2020, there were 574 million active internet users, a whopping 24% more than in 2019. As of June 2021, this number now stands at 624 million, making India the largest and fastest-growing digital market. For the first time in the history of India, non-metros (tier II and tier III cities) have surpassed metros (tier I) in terms of internet usage. This explosive growth can be attributed to the wide availability of smartphones and affordable mobile data, as well as the pandemic where going digital remained the only option across a multitude of sectors.
The tier II and tier III cities, often referred to as Bharat, continue to showcase a significant uptick in demand for e-business and e-commerce services. It’s also interesting to note that a considerable demand from these unchartered territories is for non-essential items, compared to tier I cities where the demand is still restricted to essential goods. Major appliances continue to do well in urban centers and buyers in small towns are more value and price conscious.
As per our recent data, the highest engagement was noticed in the e-commerce sector and it continued to rank number one for adding the maximum number of new users. Fintech, a sector where a majority of people prefer to walk into banks, talk to tellers, and understand products in person before investing in them, has seen a significant digital spike. A testimony to this is our internal data that shows an 11% boost in promotional push CTRs. Another sector that stood out in tier II and tier III cities was health and fitness, with a spike of 79% in push CTRs for notifications that urge users to exercise or complete a daily goal. Further, messaging campaigns in edtech and media and entertainment saw an uptick with rural audiences. Overall, non-metros have outpaced metros not just in terms of total searches, but in purchase volumes as well.
With such great numbers being projected from audiences in Tier II and III territories, a greater responsibility falls on brands to make the most of this opportunity with the right tactics deployed.
This involves dividing the entire market into distinct regions and segmenting audiences into groups, then creating a marketing mix that is tailored for each selected audience. Essentially, customer outreach and service must become hyper-personalized. For Tier II and Tier III cities, localized customer support in regional languages will help businesses and brands gain a competitive edge. Further, customer support must be tech-driven with automated ticketing, live chatbots, advanced CRM (customer relationship management) and omnichannel support.
Riding the social commerce wave
Social commerce in India is expected to touch up to around Rs 51,703 cr in GMV by 2025 as the number of online shoppers — especially from tier II and tier III cities. By 2022 a significant chunk of around 250 million shoppers will be comfortable with social commerce. Shopping will always be an experience and with social media increasingly transforming into a sales platform, brands continue to leverage technology to enhance their customer experience game. Using this alliance of e-commerce and social media, brands are successful in changing interaction into transactions by understanding each customers’ preferences and past purchases. This method has proven to be cost efficient and effective at staying relevant in the customer’s mind. It also gives brands a chance to establish trust amongst customers and boost affinity amongst them.
Exceptional customer experience
An average user spends more than three hours a day simply browsing their smartphone. Elevating an online shopping experience or even just how your brand interacts with customers on mobile can be a game changer. A seamless checkout, frictionless post-order communications, easy returns and refund policies, an intuitive user interface, and well-timed updates can help improve customer satisfaction and retention. Brands should also pay close attention to any friction points in the app where customers drop off during shopping or checkout. Identifying these can genuinely improve the customer experience and conversion rates.
In summary, India has surpassed traditional methods of making purchasing decisions. The small mobile screen is a constant companion and a guide for consumers in tier II and tier III cities, making it the most influential device for tapping into this massive opportunity. With the tactics outlined above, marketers are at an advantage when it comes to building campaigns that are targeted and personalised.
(The author is chief marketing officer, CleverTap)