Ekalavya Bhattacharya

Back in December 2011, I’d noted down some of my digital predictions for the year 2012. This was on the request of Prasant @ LightHouseInsights.in (A really good blog on the Indian digital media scene).

Well of course I got lazy and never got to formulate the notes into a proper article. We are now in the 5th month of this year and I’m seeing a lot of these predictions actually taking some sort of shape, so I finally decided to tumblarize those notes!

This is also dedicated to Viren. I think he’s the only one who reads what I write and constantly pushes me to write.

Digital Predictions of 2012:

1. E-Commerce
   The e-commerce industry will be extremely volatile.
   A lot of burn. Some mergers and acquisitions.
   
   Where it stands at in May:
   A lot of my ex-colleagues (primarily ex-bosses have ventured into ecommerce). The number of ventures getting funded and those advertising on television keeps increasing by the day. But we are seeing some die. Some get acquired. International guys entering the fray. Its exciting. I recently bought an AC off Flipkart because it was cheaper than Vijay Sales. E-Commerce is not going to die, but it’s going to be insanely volatile. There will be consolidation at the top and death every where else.
   
   There was an interesting chat I had with one of my ex-colleagues who is now a pretty senior tech person at one of these new websites. When I asked him about his views of the bust, he said something very intelligent. It was on the lines of - ‘I know this is going to go bust. But what do I have to lose? The company is funded. I’m getting paid very well. I have a little stake. The worst that can happen is that the company will wrap up in a year or 2. I’ll put my tech skills and this experience to good use in another company. Internet is not dying. But in the event that this does well - I’ll be rich.’
    
2. Original Digital Content
   Massive increase in the amount of original content that will be produced especially for the internet.
   
   Where it stands in May:
   Well I’m going to contribute personally in this! MTV is doing a fare bit in the digital scene. Lots of video, lots of consumption etc. So its going to be a cool experience - fiction, reality, music etc.
   
   But what do I really mean when I say ‘Original Digital Content?’
   A lot of brands are investing huge amounts of money in building fan bases on Facebook. Soon there will come this shift from obsession of just fan numbers to what are they doing? What are they consuming?
   
   This is when brands will start investing in content specifically for the web. If you are active in the digital space, you would have noticed this already. Coke, Pepsi, AXE, Kingfisher etc. Many are realising this. Soon everyone will.
    
3. Death of the Microsite
   Brand microsites are dead. No? Well they are surely dying.
   
   Apart from corporate sites and sites which provide a tangible service, I don’t see the need of a microsite. Brands will continue with microsites for specific campaigns. Primarily for the Brand Manager to meet his Digital KRAs of a new campaign.
    
4. A lot more 360 Degree Campaigns
   The Call-For-Action of every big campaign will soon be some Digital action.
   Why? Because its one medium which allows you to track the success of a campaign. Of course there are other engagement benefits too. 
   
   Not completely related, but just an observation: Facebook recently introduced something known as Action Links. 
    
5. Massive Political Campaigns will erupt on the internet
   Every digital media agency has studied the Obama campaign. National elections are not too far away. A lot of parties made their first foray into Digital during the last elections. 5 years on, this time around its going to be massive.  
   
   
6. Music Monetization in India
   Especially when it comes to Bollywood.
   
   T-Series is at the core. They were the first ones to successfully sue Youtube and have since become one of India’s largest money earners off Youtube. But monetization is going to see a lot of new models and I see many sprouting all around.
   
   Flyte by Flipkart is a great example. They are getting the pricing right. They just need to getting their outreach sorted. I’m really surprised at the lack of an Android app till now. I’m sure its under development.
   
   NH7.in is also launching a store soon. Good for the Indie seen. 
    
7. Television will become far more Social
   This is out of personal experience of what MTV has been doing for MTV Roadies. It won the Mashable Award for the Most Social TV Show in the World for a reason. I’m sure others will wake up soon. They have to.
   
   I’m also working on a project for IIM-C where I’m trying to build a connect between social/digital and television ratings. If anyone is interested in being part of this project - connect with me @ekalavyab
   
   
8. Financial Dealings online will greatly increase
   Insurance will be the major driver as of now. But I can see all sorts of B2C financial dealings completely shifting. No one will eventually manually queue up to buy something or pay a bill.
   
   The interesting prediction here are third parties capitalising on this and setting up platforms and building applications based around API’s provided by different companies. If you get what I mean..
   
   
9. Facebook growth in India
   I’m sure I don’t need to say much about this.
   
   See the percentage growth of Facebook in India over the last 6 months. Massive! Facebook is going to become ingrained in every branded communication. An integral part of every campaign. Even on-air campaigns are now being judged on the basis of the vibes they generate on Facebook.
   
   A lot more RFID play will happen. Digital hoardings. Easier ways to like and post.
    
10. Customer Support
    A more well defined Customer Support program residing across the Social Media platform.
    
    We’ll see a lot of agencies and companies providing such CRM solutions. Soon every consumer facing brand on the internet will be using one of these.
    
    
11. Death of Branded Facebook Applications
    Gone are the days of the simple Facebook application. In fact when is the last time you used a Facebook application? When is the last time you used a branded Facebook Application? If you are a Brand Manager and your agency is suggesting a Facebook App, only go ahead if they can guarantee 500,000 users without too much of advertising.
    
    Instead, Facebook Connect will be used for providing a more social experience. I’m sure we’ll see a dramatic decrease in Social Gaming (on Facebook) too. This will spill over onto the mobile scene where apps like Draw Something will thrive.
    
    
12. More Doctors Online
    With our massive population there is tremendous potential in e-medicine and e-consulting. Some one is sure to crack a good model. I wish I had the resources to work on my idea :-)

Coke Studio (Pakistan) is in its 4th season now. I love Coke Studio and have always wanted it to come to India. I have every MP3 file downloaded across seasons…

But do I love them all? NO.
There are a handful of 12-15 songs which I really love…
And I have all these in a folder and usually listen to this particular folder.

There are a couple of songs which are fast-forwardable. Stuff which you wouldn’t listen to more than once. Now the thing is that out of the 12-15 songs which I love… 8-10 are global favourites. Stuff like Garaj Baras, Paimona, Aaj Latha Naiyo, Mirza Sahibaan etc… are loved by almost one and all. Daanah pe Daanah from Season 4 will be a recent addition to that list.

Comparisons?

Coke Studio @MTV is now just 10 songs old and people are drawing crazy comparisons and saying it sucks et al.
The psychological funda is simple…
Most are comparing the current tracks to their favourite tracks. Cos’ most Indians obviously most haven’t seen the Pakistan version of Coke Studio as a complete episode.

Which is pretty darn ridiculous! Why don’t you compare the first 10 songs of CS@MTV with the first 10 songs of CS? You’ll have the brilliance of Javed Bashir and that can be matched by Kailash Kher’s track. You’ll have Strings singing versions of their songs. Although great…their regular versions would be equally fine and those songs were already very popular.

Imagine if Shankar Mahadevan sang a couple of his already popular tracks? He’d have gotten lynched!

All the comparisons are such a farce! Its almost cool to not like CS@MTV. It’s a way of showing others - Oh I’m so sensitive…that I want you to know that a part of me loves Pakistan! They are the pioneers of Coke Studio! The Indian version just doesn’t touch my soul - Fuck your soul. Why don’t you just listen to the music instead? Or you’re seriously better off watching Roadies in your closet! And Coke Studio is a Coke owned property btw and not owned by the Musicians of Pakistan. The format hasn’t been copied here. Its been Coke’s decision to get it to India.

(This is not as an employee of MTV but as a general lover of music)

I’d written a post on this blog last August… - The Digital Switch (eCommerce) and that post got the most no. of pageviews for this blog in the last year or so.

In the mean time a lot of eCommerce startups have been founded and more than a couple have gotten funded. FashionAndYou, 99labels, ThePrivateSales et al have all raised a hell lot of money in the last few months.

The problem?
Luxury items are suddenly affordable to all! A Quiksilver tshirt which retails at approx Rs 2000 and makes you think twice before buying is now at Rs 500! Of course it sells like hot cakes. But does a brand like Quiksilver or Diesel aspire to sell more? They’ve built a brand over a couple of decades. They wouldn’t want to become massy…

And the next issue?
I’ve seen the same CK products on sale at FnY and The Private Sales.
So the future? All the dotcoms going to the same national and international exclusive brands and demanding for better and better offers.

I can only see CONS and very less PRO’s…

• All the sites competing in the same space. All of them asking the same brands for the same awesome deals.
  
  
• Brand dilution and loss of exclusivity.
  
  
• Loss of vanity and show-off factor.
  Earlier wearing a pair of Diesel denims was a statement. I can afford a pair which costs Rs 15K! But now…almost everyone can buy the same pair for Rs 7K!
  
  
• I’ve bought stuff at these sites and I’ve had a really pathetic experience when it comes to apparel at FashionAndYou. When you’re spending 3000 on a shirt and it doesn’t fit you well…you are definitely going to be pissed.
  General tshirts, accessories, perfumes etc will do well. But I still doubt someone will swipe their credit cards for a Rs 10,000 suit without bothering to check the fit. I know I’m contradicting myself to a certain degree to what I mentioned in the earlier post… But you’re not going to be running out to try and test everything you see.
  
  
• The offline guys will start matching the deals once they feel the pinch…
  Let me share a little story. 5 years back when I was working at PaGaLGuY.com, we cracked an idea. Each year thousands of students join a B-School. Each B-School student has to have or buy a laptop. And since PaGaLGuY was pretty much the hub of all business school aspirants, we thought why not make some money by selling laptops! So I went about researching and meeting a lot of companies. One particular chap at Acer said something which I still remember. Vijay Sales gets me 3000 sales a month in Maharashtra. If I give you a better offer than them…you’ll have to guarantee me that you are going to be selling more than 3000 laptops else I’ll be jeopardizing my dealings with Vijay Sales. Also he wanted a guarantee of 3001 sales + Significant amount of pre-payment + Wanted me to take delivery of all at the same time.
  
  From the above experience and drawing parallels with the current eCommerce scenario… Warehousing, up-front payment, delivery and customer service etc all become a headache. FashionAndYou can’t possibly guarantee a particular number of sales. They obviously don’t take prior delivery of all goods because they take more than a month to deliver what you’ve bought. For things to get fucked up someone just has to go and disrupt the system…
  i.e. Someone like a YepMe or BagItToday should guarantee a brand a particular no. of sales, take prior delivery and ensure next-day delivery to the customer! This will then be expected from all the sites and we’ll end up seeing the same product go on sale over and over again on the sites. Like we see the Marvel comic tshirts go up on sale every weekend at FnY.
  
  
• Are people really buying? So I was really intrigued when I saw a ‘Sold Out’ across a watch which cost 75,000! Did someone actually just pay so much?
  On asking a couple of friends in the industry I found out that this is a simple marketing trick.
  The company got 10 watches but they put up 16 on sale. 6 of them went up with a ‘Sold Out’ tag to impart the illusion that a few lucky people had managed to snag some really awesome deals. It also paid of psychologically…because if a prospective buyer sees a ‘Sold Out’ sign, he’ll at least think that there are others in this digital world who are also spending.
  The con? The buyers are going to get smarter.
  
  
• Niche sites are sprouting up too soon. Some might think that this is a good thing…but this will actually end up harming this fledgling line of business. Also when I visit these sites…I’m not really looking for something particular to buy. That’s the beauty of such sites. You suddenly chance upon a good deal and are forced into a dilemma of wanting that product.

Anyways…
This vertical will be nice to see and follow over the next couple of months. I’ll write about the deals business later this week. I’m still not convinced a model like GroupOn will benefit businesses in India. You can read what I’d written a year back on this model here - The future of group buying sites is still dicey in India.

I would say a safe estimate of the Indian Online Market would be around Rs 1,000 Cr. While some may argue that its Rs 850 Cr and not really 1K yet, some might even say its more.

Now one thing all of us have noticed in the last year is that the market has seen considerable growth. Hence if you are a Sales exec in an Online / Digital company your targets would have definitely been increased with the reasons being cited as - If the overall pie is growing our bite size should be bigger.

But its not simple.
Facebook is screwing a lot of people!

How?
Well earlier we could blindly assume that 50% of all online spends went to Search.

But now a certain ‘Facebook’ has entered the minds of the Marketing genre. Facebook is pretty much becoming the internet for a lot of people and if your brand is not present on Facebook…you’re doomed! (At least that’s how Social Media Gurus put it).

So now, apart from Google (which has also dived into Display ads and Youtube too has started featuring on every Planners excel sheet), there is Facebook which is taking up a huge chunk!

Not only are brands now paying for Facebook Ads but they are also spending their on ‘Social Media Agencies’ to run their page and some are also spending money to create content for their Facebook page!

So even though the overall market might be growing…
The amount you can get for your portal is reducing. Especially if you are planning on getting a client for a ‘branding’ campaign instead of a ‘CPL’ campaign.

So what can you do?
Well you don’t have to become yet another ‘Social Media Agency’ and update fan pages for brands. You don’t have to become a FB-Media buying agency and hope to take a commission on the spends of the Brand on Facebook…
But what you definitely have to do while pitching is…incorporate a sense of Facebook activity in all your pitches.

The current obsession of brands for blindly increasing their fans will soon pass. It will soon become…am I really benefiting from these 1 Million odd people I have on my page? How can I ‘engage’ them? How can I benefit from them? Why are they not buying my product?

And how is Facebook the ‘evil genius’?
They are making you spend on creating ads to run on Facebook.
They are making you spend to run ads on Facebook.
You are mainly running ads on Facebook and taking traffic to a page within Facebook.
Then they are making you spend to keep these fans engaged within Facebook!

That way, they own you when you make the ad, they own the traffic, and they own wherever the customer is going.

If you are working on a large online portal..
Ask your boss to reduce your targets :-)

Was seeing a segment on ET Now earlier today and they were covering ‘Group Buying’ sites in India and how 100’s of them are sprouting up all over.

Sandeep Murthy (from Sherpalo Ventures) mentioned in the show how such companies are adding value to users + services.

Kunal Bahl from SnapDeal said something very interesting, it was on the lines of:
A product purchase such as a pair of shoes or an electronic item is made once in 12-16 months, while a retail service like a restaurant or spa visit will happen far more often.

Interesting and valid point, but now lets think from the point-of-view from the Restaurant owner (service owner)…

Firstly, he’s giving a 50-70% off on a meal / spa treatment..
So assuming that this a new joint, this will come out from his marketing budget and get first-time consumers to his place.

Why is he doing this?
a) To get first time consumers.
b) More importantly - To convert those first time consumers into repeat consumers.

Point b) is something which will not happen. So while a user who makes the purchase on mydala / snapdeal / dealsandyou etc will keep going back to the site to get more deals like this, he is unlikely to go back to the same place and pay 70% more than what he did the first time.

Its basic human psychi. If I pay Rs 300 for a meal, I will not go back to the same place and pay Rs 1000. At 300 it was VFM, at 1000 even if its VFM - I know that I’ve had this at 300 and the brain will sub-consciously tell me that I’m making a loss.

How does a Restaurant become popular?
Good service and great food.

You won’t see word-of-mouth happening in the following ways:
“Dude, check out XYZ. Very cheap.”
it will always be…
“Dude check out XYZ. Awesome food, great ambiance and its not too expensive.”

Cheap will always be associated with an additional adjective. Be it convenience or quality.

Hence after a trip to XYZ on 70% off…
You’ll tell your friends…
“Dude, check out abc.com. I got 70% off at XYZ. Awesome stuff man.”

So at the end of the day, for a new joint - for a one time marketing effort, such a tool will be great. But definitely not for regular business. Cos’ at some time or the other, the restaurateur will want to make profits. Even if its a week-day buffet lunch.

Another thing which you might feel is not a real problem but is a ground reality is that always using such offers portrays you as - cheap.
College going students will love your site but as and when you offer spa treatments and packages which are usually life-style purchases, your target audience will change.

A working professional earning more than 6LPA will not mind spending an additional Rs 300 while at a fine-dining place on a dinner date than risk appearing cheap in front of his partner as he asks for the check. These are basic psychological reactions.

Anyways, local players in this space who don’t have too many over-head costs should continue to do decent business but I seriously doubt that advertisers/marketers/services will repeatedly use a service like this.

On the contrary this model will do well for products (apparel, mobiles etc), but will take a considerable amount of time to flourish. As you go into the nitty-gritty’s of such discount deals, you’ll realise the number of obstacles in the course. No company will give only you a great unique deal - because this will actually make him risk his current relationship with his other vendors. For providing 100 laptops at a 30% discount, you’ll often have to commit numbers and even pay before hand…
This will bring up issues like - capital for up front payment, warehousing/storage, courier/delivery/warranty related problems. Plus of course what if you can’t get 100 buyers.

Interesting times ahead in the social ecommerce space in India!

Also worth a read: The Digital Switch (eCommerce)