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Author: Puneet Johar, Co-Founder and CEO, TO THE NEW Ventures (based: India)
The autumn of 2014 will be remembered as the time when the perfect storm struck. It was the time when a number of forces came together to shake business in India from its very roots. Businesses across sectors, public and private, large and small and even political parties witnessed history being written in front of their eyes. The early adopters flourished, the smart set quickly followed them and the naysayers still live in denial. Yes, digital marketing had become mainstream and impacted every aspect of our life from our political leadership to the way we consumed.
Leading the storm were the elections of 2014 and a man who at 63 had understood a few years before his peers that the internet would not only make him the most powerful man in India but also be his legacy. Prime Minister Narendra Modi and BJP swept the elections with a massive social and ground campaign that was more innovative and data driven than anything that his critics and opponents could manage. Most of them used conventional media as their main weapon and failed. An interesting thing happened during the course of the election campaign lasting more than 9 months. Slowly but surely, television and print started following social media to pick up trends. They had become the followers without realising it.
The world stood up and took notice of the man, not for the scale of his victory but for his savviness. As Prime Minister, he moved quickly to announce a series of initiatives – Digital India, Make in India, Swacch Bharat that all promised a new India. Global investors having abandoned India for the past few years when a left of centre government tainted by corruption was at the helm, flocked back.
The other forces reaching inflection point at the same time were the IPO of a Chinese eCommerce company, young IIT graduates who had struggled over the past five years believing that technology could disrupt business, a bunch of venture capitalists who were staying in the course despite odds, and most importantly the sophisticated hardware factories in China that were beginning to churn smartphones at the price of consumer delight.
The IPO of Alibaba saw investors being rewarded for their faith in digital marketing and China had arrived as a digital superpower. The company was more valuable than Amazon and did more transactions than Amazon and eBay put together. Alibaba and SoftBank were quick to redeploy some of that money in India betting that the next ten years would resemble the last ten in China. Global investors followed them. The beneficiaries of this were the once dismissed as naive IIT graduates, who till then had been trying to convince the world that digital marketing and technology could disrupt businesses. They had been screaming from the top of their voice about the benefits of a scalable technology platform, targeted marketing, cohorts, customer analytics and how it could be used to remove inefficiency in every business in every sector and across all functions be it – advertising, sales, supply chain or product development.
Till then only a small bunch of venture capitalists understood what they were doing. The had braved on and invested in this story despite all the odds for the past few years. Leading the charge were companies like Tiger Capital, SAIF Partners, Accel, Helion amongst others. They were about to be vindicated. Large capital flowed into these young companies further accelerating the disruption. As sometimes happens when stars align, these companies grew transactions and gave deep discounts in the one category that would further fuel the boom – smartphones.
Online retail across sectors grew month-on-month while malls saw dwindling footfalls. Online content – music, video, text, social saw more time being spent. Innovative global apps were being downloaded. Local startups were quick to copy and compete. The smartphone was turning everyone into a consumer and a businessman at the same time. Small Enterprises started putting up their goods and services for sale. House owners started putting up rooms for rent challenging hotels. Young men started driving passengers disrupting car rentals and taxi licenses. No sector was going to be spared.
Businesses started scrambling for answers. Did their advertising agencies with so called digital marketing units have the solution? Or was it their technology service provider? Both were also struggling much like their clients. One was trying to convince them that the process started with communication and the big idea. The other was trying to convince that it started with technology. Both also had been disrupted without realising it. Meanwhile, the noise in the board rooms has become louder. Naysayers still point to absurd valuations, the losses and all the other factors. Not that they are wrong but the fact is that they are focusing on the wrong aspect and continue to live in denial. Whether the valuation of a young company should be what is projected and whether it has sustainable leadership should be of no significance to you unless you are invested in it. The fact that it is taking away market share from you and the consumer has moved to the smartphone while you struggle with legacy, should keep you awake at night.
The smart set has quickly followed and now making digital core to their business strategy. The fact is that it needs a separate DNA is now dawning on them. Emotional and transactional relationships with the consumer were built by separate functions in traditional organisations. In Digital Marketing it becomes one.
The new haves and have not’s are just getting created. The line separating them is the use of this powerful weapon called Digital Marketing.
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