India is one of the fastest growing markets in the world. While its population amounts to more than 1B people, only one in four individuals has access to the internet. This statistic is rapidly changing as the country becomes wealthier and greater investments are committed to developing its infrastructure. Over the next three years, approximately 400M more people are expected to come online, primarily on mobile.
With 80% of web traffic being generated on mobile and users spending 28 hours on their smartphones per week compared to only four hours watching television, India is truly mobile-first. This rapid evolution is creating new opportunities for brands to connect with India’s newest generation of internet users.
Simon: Flipkart has experienced phenomenal growth in the last 10 years. What has enabled this success?
Shoumyan: The first is a macro reason. Nearly 18% of the global population in their 20s resides in India, and the country’s GDP is growing 2X or 3X faster than the global average. So, what happens when you’re in a young country that’s growing with an awesome GDP rate? A massive opportunity for new industries emerges. Flipkart was there at the right time.
The second is a micro reason. Flipkart truly understands the local market. An example of this is how we have adapted to India’s mobile-only environment. Most people access the web via mobile, and apps are critical tools for capturing users because they provide a viewing experience superior to desktop and browser-based systems. In addition, we can communicate directly with customers through push notifications, which result in about 20-25% of everyday transactions for Flipkart.
However, a conventional app doesn’t cover the full spectrum of the Indian market’s needs. One challenge we faced, particularly with new internet users, was storage. A lot of new users were coming online using smartphones in the $100--150 price range that typically have minimal storage space. These users had to prioritize their apps, uninstalling shopping apps to make room for social apps like YouTube. To solve this problem, we developed a Progressive Web App, which creates an app-like experience without consuming precious storage space—an Indian-backed innovation that we are incredibly proud of.
Indian-led innovations like these are the driving force behind Flipkart’s success. While some have failed, many of these innovations have solved real problems for Indian consumers, and we are constantly revisiting them to see how they can be improved to make the shopping experience more seamless. This is a major reason why Flipkart has been able to grow as fast as it has.
Q: At Google, we believe that to have great products, we need to start with a strong insight about our customers that helps us understand what to develop. How do you find those insights and keep the pulse of Indian consumers?
Shoumyan: India is very heterogeneous. There is a huge diversity of cultural habits and attitudes, and people from disparate demographic segments behave differently across product categories. Understanding these differences, which make up “Indian-ness,” is part of our DNA at Flipkart.
Q: This must make it difficult for foreign competitors who enter the market and don’t intuitively understand these nuances.
Shoumyan: I think that’s the beauty of this market. India is a lucrative and massive country, but alongside scale, we have diversity. It’s not enough to copy a model from a developed country. It’s essential to heavily invest in understanding Indian consumers and create solutions that speak to the nuances of local markets. More often than not, there will be 100 solutions that cater to 100 different regions rather than a single solution that works across the country.
One way we are addressing India’s diverse consumer base is through language. We’re continuously grappling with ways to communicate with our customers in the language they are most comfortable with since India has more than 100 official languages.
On our app and website, we usually focus on communicating basic messaging in English because we know that most of the population has some proficiency with the language. However, more engaging, in-depth conversations, such as those that take place with customer support, need to happen in the user’s preferred language.
Q: On the topic of communicating with consumers, one thing you mentioned earlier was the importance of push notifications. These are difficult tools to master because they can easily become intrusive.
Shoumyan: We always look to find a balance between user-centric and business-driven methods of communication. This is particularly relevant when it comes to how we deploy push notifications—important tools that if poorly utilized, can be completely suicidal.
There are two approaches to sending out push notifications:
- I send out notifications only on the basis of user behavior signals. However, if I do this, I may not be able to fulfill my business objective of promoting a specific category.
- I send messages purely on the basis of my business objectives. This annoys consumers who thus receive messaging that isn’t relevant to them.
The first isn’t business-friendly, and the second is intrusive, so what do you do? At Flipkart, we adopt a hybrid approach: We prepare push notifications according to our business objectives, but send them only if there is a positive signal indicating user interest.
For instance, let’s say we have a very strong fashion business and are introducing the home decor category for the first time. Every single vertical in home decor will be mapped to a lookalike category in fashion. The messages we send about home decor go only to users who have demonstrated an interest based on the lookalike category in fashion. It’s neither completely business-unfriendly nor completely intrusive. This balance has worked magically for us. It increases the workload because we are sending out hyper-targeted messages instead of mass ones, but I think that’s the way to go. It’s pristine CRM.
Q: What can we do better to help you grow and be successful? What is next for Flipkart?
Shoumyan: India is perhaps the last large global media market that is still predominantly offline. To put this into perspective, India generates roughly $10B in ad revenue, but digital accounts for only about 15% of that. It’s the collective responsibility of big consumer internet companies like us and big publishers like Google to make digital the country’s first port of call.
As we move forward, we’re focused on mastering the scale and diversity of this market. We are constantly asking ourselves how we can better equip ourselves to predict demand. The Indian retail sector is projected to hit $1T by 2020, and e-tail penetration is currently less than 2% of that total. The takeaway is that this market is huge, and we’re only at the beginning of the journey. It’s a really complex challenge for businesses to expand at incredible speed, and it’s up to us to identify the areas that will trigger exponential growth to craft strategies to maximize those opportunities.
Stay tuned for future editions of CMO Fireside Chat, where chief marketers and business leaders around the region give us an inside look at the strategies that move the market.