WINNING AT RURAL

T2 & T3 Marketing Strategy by Brand Marketing Team

04.10.2019
AGENDA

• The Objective
• The Age of the Millennials
• Shifting Sands – Focus on Rural India
• Customer Key Trends- Lifestyle & Digital
• Case Studies
• Challenges
• What do we Learn?
• What we Propose?
THE OBJECTIVE
Why Rural Markets Have Become a Primary
Focus
 TIER WISE CLIENT ACQUISITION INDUSTRY TREND

Client acquisition CAGR growth • With increase technology penetration

and Digital India Movement, the equity
Tier Districts FY17 FY18 FY19 Tier 3 Yr 2 Yr 1 Yr broking industry has seen significant
movement primarily in T2 & T3 Cities
1 6 4.2 6.2 5.4 1 17% 15% -12%
2 97 8.7 13.2 12.7 2 26% 21% -4% • T3 cities have seen a spike in the
3 513 5.7 9.6 10.6 3 34% 37% 11% number of Demat Accounts opening.

All 616 18.5 29.0 28.8 All 27% 25% -1%

COUNT IN Lakhs

Relative distribution Absolute growth OUR OBJECTIVE

To understand the Customer
Tier FY17 FY18 FY19 FY17 FY18 FY19 Behaviour, Trends of T2 & T3 Cities
1 22% 21% 19% 2.0 1.3 -0.8 in order to create a Winning
2 47% 46% 44% 6.4 4.0 -0.5
Marketing Strategy using our key
learnings from the exercise.
3 31% 33% 37% 6.2 5.0 1.0
All 100% 100% 100% 14.6 10.3 -0.2

Note: CDSL data is district wise. Cities are mapped to corresponding districts.
As a result there is an approximation built in the study due low granularity of data
THE AGE OF THE MILLENIALS
The Tectonic Shift That is Moving the Global Markets
 INCREASING DOMINANCE GLOBALLY
• Millennials form the largest population group globally
• At more than 27% of the total global population, millennials
form the largest demographic group in the world
• In India, millennials constitute nearly 34% to the country’s
total population
• With a median age of nearly 28 years, India is one of the
youngest major economies globally

Millennial Population (in millions) as a % of country's total population

With the largest millennial

population globally, India offers a
tremendous growth potential for
consumer markets and retailers.
34% 33% 31%
26%
14%

India Brazil China USA UK

Source: Deloitte Database (Thomson One) and Analysis
INDIAN MILLENIALS V/S MILLENNIALS AROUND THE WORLD

Share in working age population (by age group)

The Indian millennials stand out from the rest in many ways:
9% 8% • They are better educated, as compared to their
predecessors or prior generations
• They are better connected to information and to the
15-17 world
• They are the chief wage earners accounting for
43% approximately 71% of total household incomes
47%
18-35
Millennials account for nearly half of the working
age population. Their share in the working
population is expected to remain highest in the
36-49 30% next decade and even further.
28%

50-64 16% 19%

2017 2027F
Source: Deloitte Database (Thomson One) and Analysis
INDIAN MILLENNIALS - MOVING TOWARDS CONSUMERISM

• Millennials in India - characterized by high levels of disposable incomes & are digitally connected brand conscious
individuals

• Differ from their previous generations on account of their lifestyle, consumption pattern and convenience based
preferences

The spending pattern of millennials have been represented below:

Monthly Expenses 4% Expenses from Incremental Income

Entertainment Including Eating
7% Monthly Necessities Out
Apparels & Accessories 7%
11% Education
29% Mobile & Computer 11%
Utilities 33%
11% Home Appliances
Personal Grooming 5%
Vehicle Ownership
Discretionary/Lifestyle
12% Leisure Travel 8%
17% Savings
Savings
11% 21%
13% Property Rent/EMI
Property

Savings as a category accounts for 11%

Source: Deloitte Database (Thomson One) and Analysis
 3G/4G PENETRATION IN INDIA

83.80%

45.40%

Millennials constitute the largest

group having access to the
16.50% internet (3G/4G)

India (Overall) Internet users (Overall India) Millennials (Having Internet

Connection)
Source: Deloitte Database (Thomson One) and Analysis
 MILLENNIALS - THE NEW AGE CONSUMERS
Changing purchase patterns
Increasing internet Importance to Experiential Buying
penetration has led to rapid While there are multiple options
growth of online buyers. In from where a product or a service
addition, online banks, can be bought, experience is
payment wallets & apps have becoming the key differentiator
made online purchases easier amongst channels.

NEW AGE
Preference for CONSUMER
convenience CHARACTERISTICS Connected consumers
For today’s cash-rich and Consumers today are more
time-starved consumers, connected than ever. They are
convenience has become a empowered by technology to get
paramount consideration what they want at their convenience

The key characteristics to focus on are

convenience, digital availability, ease of buying
Source: Deloitte Database (Thomson One) and Analysis
and buying experience
 UPRISE OF SOCIAL MEDIA

No. of Social Media Users in India (in Millions) No. of Active Social Media Users on Mobile (in Millions)

Source: Stastica
 MILLENIALS & SOCIAL MEDIA CONNECT
• Millennials are more likely to share a product/service
feedback online
28% Millennials
purchase products • Greater engagement and the ability to offer great
owing to Social Media consumer experiences can lead to millennial
28% customer loyalty
Recommendation.

• Technology plays a pivotal role in making the

shopping journey more engaging for shoppers

63% Millennials
63% purchase products Social media platforms and online product/service
stay updated on reviews have a major influence on the millenials
brands through Social
purchase decisions.
Media.

Source: What works for today’s consumer: Online shopping or visiting physical store?, Franchise India, 29 November 2016; Indian Fashion Retail 2016, April 2016; Deloitte Database and Analysis
 MAJOR ATTRIBUTES OF MILLENIALS- DIGITAL
Millennials value brand &
authenticity
Authentic brands that showcase
sustainability. significantly
impact a millennial’s buying
decision along with the price.
Mobile: A one-stop solution
From maintaining a shopping list to
making payments and posting
product reviews on the internet,
mobile has become the 24X7
personal assistant
Source: Deloitte Analysis
Personalized marketing is the key
Millennials value experiences over
just owning things. The inclination
to purchase a product if promoted
through a personalized experiential
campaign is significantly higher
than generic campaigns
Content becomes social
Content including product reviews,
buying experience, customer service
experience, product images etc is
playing a crucial role in the lives of
millennials.
 FOCUS ON RURAL INDIA
The Changing Market Realities and Potential of T2 & T3 Markets in India
 TIER TOWN DEFINITION & DATA

Indian cities are classified purely on the basis of their population size

Cities with population of over 10,00,000 are classified as Metros

Cities with population of over 100,000 are classified as Tier I Cities

Cities where population ranges from 50,000 to 100,000 are classified as Tier II cities

Cities where population ranges from 20,000-50,000 are Tier III cities

Source: Wikipedia
 CITIES LISTING

Tier-I Cities:
Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kanpur, Kolkata, Mumbai, Pune

Tier-II Cities:
Agra, Ajmer, Aligarh, Amravati, Amritsar, Asansol, Aurangabad, Bareilly, Belgaum, Bhavnagar,
Bhiwandi, Bhopal, Bhubaneswar, Bikaner, Bokaro Steel City, Salem, Tiruchirappalli, Chandigarh,
Coimbatore, Cuttack, Dehradun, Dhanbad, Durg - Bhilainagar, Erode, Gwalior, Durgapur,
Faridabad, Firozabad, Ghaziabad, Gorakhpur, Gulbarga, Guntur, Gurgaon, Guwahati‚ Hubli,
Dharwad, Indore, Jabalpur, Jaipur, Jalandhar, Jammu, Jamnagar, Jamshedpur, Jhansi, Jodhpur,
Kannur, Kakinada, Kochi, Kottayam, Kolhapur, Kollam, Kota, Kozhikode, Kurnool, Lucknow,
Ludhiana, Madurai, Malappuram, Mathura, Goa, Mangalore, Meerut, Moradabad, Mysore, Nagpur,
Nanded, Nashik, Nellore, Noida, Palakkad, Patna, Pondicherry, Prayagraj, Raipur, Rajkot, Siliguri,
Rajahmundry, Ranchi, Rourkela, Sangli, Solapur, Srinagar, Thrissur, Tirunelveli, Tiruppur,
Tiruvannamalai, Ujjain, Bijapur, Vadodara, Varanasi, Vellore, Vijayawada, Visakhapatnam, Vasai-
Virar City, Warangal.

Tier-III Cities:
All the other Cities

Source: Wikipedia
 ECONOMIC TRENDS IN T2 & T3 MARKETS
• 97% of millennials do not live in Tier I cities.: More than 450 million millennials come from Tier 2 and
Tier 3 cities. The digital connectivity in these markets has gone up due to increasing mobile
penetration and affordable access to high data speeds

• In recent years, tier 2 cities like Jaipur, Patna, Indore and Surat have recorded an economic growth rate
of over 40%, making them attractive options for larger firms. Tier 2 and Tier 3 cities also provide a vast
pool of untapped talent.

• Real estate investment in India is taking a new turn as realty investors are favouring Tier-2 and Tier-3
cities due to lower prices and improving infrastructure in such cities.

• Amazon had 3X new customers during their festive sale with majority customers coming from Tier 2 &
Tier 3 Cities.

Source: Internet
 FINANCE INDUSTRY PENETRATION & TRENDS
• PayTM Mall has 60 Million+ visitors from more than 100 cities other than metro cities

• Paypal is looking at strengthening its presence in India by turning to Tier II and III cities.

• Insurance company Cover fox which recently raised US$ 22 Mn in a Series C funding will use the
investment to expand insurance coverage into tier-2 and tier-3 cities.

• Discount Broker Upstox reported a three-fold growth in participation numbers over the last 15
months, and a remarkable 33% of its participation and revenues comes from Tier III cities and around
42% from Tier I cities.

Source: Internet
 THE CHANGING REALITIES OF RURAL INDIA
Rural consumers are changing—in terms of their attitudes, preferences and buying behavior.

What do rural consumers value? Who influences them the most?

71% buy brands and 59% see them as 1% said the key influencer for their last
trustworthy and reliable. big-ticket purchase was the village
head and 6% claimed it was the local
shopkeeper.

How much do TV ads and celebrity

When do they buy? endorsements influence them?
55% buy when the need arises, rather 7% claimed advertisements and celebrity
than waiting for special occasions. endorsements have an influence on their final
purchase decisions.

What sales channels do they use? Where do they plan to spend more?
83% travel to nearby cities to make 51% plan to increase their spend on
their bigger purchases. education and 49% plan to increase their
spend on healthcare.

Source: Accenture Database and Analysis

 DIMENSIONALISING RURAL CONSUMER BEHAVIOUR
Three broad dimensions characterizing rural consumer behavior change are:
Brand Savvy
Trading Up
ASPIRATIONAL
FOUR RURAL CONSUMER SEGMENTS
Traditionalist
Are the conservative relying on
conventional channels to
make their purchase.
Necessity drives purchase and
typically the cheapest offerings
available are purchased.
Source: Accenture Database and Analysis
Proactive
NETWORKED
Exploring
Steady Climber
Aspire for a more
comfortable lifestyle. Want
to enhance their social
standing among their
peers by buying branded
products and offerings.
Empowered
Connected
DISCERNING
Street-Smart
Young Enthusiasts
Aged 18-28, make extensive
use of digital technology to
buy branded products to
enhance their social image.
Influence the decisions of
other consumers segments.
Social
Value Seeking
The Elites
Progressive rural consumers,
boasting high education and
awareness levels. They desire
the best in product quality,
features and aesthetics.
KEY CUSTOMER TRENDS
LIFESTYLE & DIGITAL
The Primary Channels & Platforms For Maximum Reach
 THE EVOLVING DIGITAL IN RURAL

Source: Inmobi India Mobile Marketing Handbook

INDIA AN INTERNET ECONOMY (1/2)
 INDIA AN INTERNET ECONOMY (2/2)
• Rural India will continue to drive internet adoption in India & is expected to witness double digit growth for
the next few years.

• Bihar shows the highest growth in new Internet user addition, closely followed by Odisha

Source: Kantar IMRB ICUBE Report 2018

 DESIGNING THE M-COMMERCE EXPERIENCE

Source: Inmobi India Mobile Marketing Handbook

 TOP 5 REASONS TO SHOP

OFFLINE: ONLINE:

76% 63%
Physical experience of Product Convenience to Buy Anywhere /
Anytime

64% 60%
Outing with Family/Friends Access to Product / Services Not
Available Offline

63% 57%
Easier Decision Making Able to Make Frequent
Purchases

54% 56%
No Major Price Advantage Online Diverse Options Available

52% 53%
Plan Product Purchases Better Higher Discounts / Lesser Prices

Source: Deloitte Database (Thomson One) and Analysis

 THE USE OF DIGITAL IN RURAL

50% of the 38% of the respondents

respondents agreed getting explanations
expressed willingness on how to use digital
to use digital channels. channels could motivate
50% 38%
them to use it.

Digital channels have attained popularity due to cheaper

mobile handsets and 3G/4G penetration in India.

Source: Accenture Database & Analysis

 POPULAR APPS IN T2 & T3 MARKETS

The apps mentioned below are the most popular in their respective categories

COMMUNICATION VIDEO PLAYER SOCIAL ENTERTAINMENT

Source: Similar Web

 GOOGLE INSIGHTS ON T2 & T3 MARKETS

Source: Think with Google Search India 2018 & 2019 Reports
 VERNACULAR OUTLOOK (1/2)

Source: Inmobi India Mobile Marketing Handbook

 VERNACULAR OUTLOOK (2/2)

• Currently, there are an estimated 521 million Hindi language speakers and about 500 million Indian language
speakers in India. In contrast, number of English speakers stand at just 125 million.

• Paytm has even released its app in regional languages to facilitate transactions from smaller cities.

• Companies have started to realize the importance of Indian language users on digital platforms

Source: Inmobi India Mobile Marketing Handbook

THE CHALLENGE
What Hinders The Consumer Journey?
OLDER INVESTOR PREFER OFFLINE

Source: Google Digital Spending Report Data, Feb 2018.

OLDER AUDIENCES RESEARCH ONLINE /PURCHASE OFFLINE

Source: Google Digital Spending Report Data, Feb 2018.

Source: Google Digital Spending Report Data, Feb 2018.
 PRIMARY BARRIER ACROSS USER JOURNEY

ENABLED USER PURCHASE TRANSACTION &

NEW USER ENGAGEMENT CONSIDERATION RETENTION

• No touch and feel for

• Lack of awareness / products Top reason for
knowledge not making an online
purchase
• Lack of means (PC +
mobile) or affordability • Offline more reliable
• No perceived need and Convenient Top
• Not allowed Internet reason for not making an
access. Top concern for • Non-relevant content online purchase
(mostly women).
• Not sure of product/
• Lack of need or service quality (lack of
trust) Top reason for not
relevant content
making an online
purchase
• Not aware of return/
grievance redressal
Top reason for not making
a product or service
purchase
• Bad experience in
online ordering Main
concern for not continuing
online transactions beyond
first trial

Source: NUMBERS FROM RESEARCH ACROSS NCCS A/B/C.Consumer survey, February 2018 (n=3,442).
Note: Above barriers would also apply, in similar proportion, across the 710M NCC D/E population base
 CASE STUDIES
How Are Others Leveraging The Opportunity
WHAT DO WE LEARN?
Key Learnings & Strategy Recommendations
 BUILDING TRUST ALONG PURCHASE JOURNEY
ADVOCACY
• Nurture advocates to leverage
positive word of mouth
NEED RECOGNITION • Seek customer feedback
CONSIDERATION PURCHASE
• Develop a deep understanding of proactively
• Tailor value proposition to create • Enhance in-store experience
rural consumers
resonance • Support online channel through
• Shape the market by identifying
• Appeal to diversity offline intervention
and targeting the right consumers
• Demonstrate results to inspire • Offer improved financial access
SATISFIED
• Keep communication simple, CUSTOMER
consumer trust and payment flexibility
customised and engaging

DELIGHTED
CUSTOMER
1 2 3 4 5 6 7
OUT OF
AWARENESS THE LOOP
VALIDATION EXPERIENCE
• Customise marketing mix by
• Engage with relevant influencers • Differentiate through service;
product and geography UNSATISFIED
• Invest to transform retailers into initiate contact with customer
• Look beyond traditional media;
informed • Deliver on the brand promise to CUSTOMER
explore mobile
advisors win loyalty
marketing

To gain wallet share in India’s rural market, executives need to meet the new
imperatives at each milestone in the purchase journey. We call such
milestones “trustpoints” instead of “touchpoints,” as they constitute critical
Source: Accenture Database & Analysis
moments where companies can build trust with the customer—or destroy it.
WHAT WE PROPOSE?
Our Mantra For Winning At Rural
 CATEGORY SPECIFIC ACTIONABLE SUGGESTED

Source: Google Digital Spending Report Data, Feb 2018.

 HOW WE CAN OVERCOME BARRIERS?
ENABLED
NEW USER
• Creating Awareness through Digital channels
• Mobile Users to be major targeted audience with
preferred networks
• Handhold specific segments, especially rural aged
who research online but deal offline
• Low-cost solutions to attract audience
SUGGESTED INITIATIVES
• Rethinking the core TV Based Campaigns into more
Digital Based Campaigns
• Video & BLS Study Campaigns on YouTube, Tik-tok &
Other popular video based platforms targeting
mobile based audience
• Native & Video Campaigns on OTT based platforms
• Using WhatsApp as a educating and hand-holding
platform for aged as the frequency of them using
that as the platform is highest
• Flat Fee, No AMC & Zero Brokerage Offers to be
highlighted to showcase low-cost solution.
 HOW WE CAN OVERCOME BARRIERS?

USER SUGGESTED INITIATIVES

ENGAGEMENT

• Build locally relevant Content. Contextualised to local

languages and communities to drive adoption.
• Blogs, Google Ads, Web Pages & Article in local
languages giving importance to vernacular approach.
• Create Application relevant to T2 & T3 needs and
nuances using Local-centric approach to user
• App & Web in primary 8 Languages with ease of
interface/design as the basis of target segment
navigation
• Create simplified user interfaces, with intuitive
• Studying the DIY Journeys and creating quicker
structures & customise user support to local needs,
process with simplified user interface.
e.g., on call in multiple languages, more in-built
guides
 HOW WE CAN OVERCOME BARRIERS?

PURCHASE SUGGESTED INITIATIVES

CONSIDERATION

• Creating tech-enabled smart content for large local

language population with diverse needs

• Increasing Internet usage by tackling language

barriers in both content creation and consumption
• Apart from the initiatives suggested in user
• Creates interactive business websites with end-to- engagement we would suggest to create separate
end services—design, performance, discovery (SEO), app for Investor & Trader with primary 8 language
marketing (SEM), payment gateway and customer options
lead management & mobile operating platform
supporting various languages

• Built a digital ecosystem enabling improved access

to both investor & traders
 HOW WE CAN OVERCOME BARRIERS?
TRANSACTION &
RETENTION
• Build Omni channel presence
• Build consumer confidence by redefining policies
and brand messaging
• Targeted campaigns with a messaging around
quality, authenticity, pricing & support customer
can get
• Strengthen customer service and grievance
redressal mechanisms
SUGGESTED INITIATIVES
• Using the Brand Track study & Customer Research from T2 &
T3 to understand the customer, their needs & how they
perceive the brand
• Making Content the Hero of all Brand Based Campaign
• Using ‘World of Angel’ as the key tool & creating seamless user
experience using the same across
• Brand Tagline which resonates the way we want it to be
perceived
• Using marketing tool stack which handles:
- Customer relationship management software
- Video/web conferencing solution
- Email service provider
- Marketing automation platform
- Print materials and solutions
- Analytics and data visualizations solutions
- Content management system
• Complaint & response systems for client. ORM Channels can
play the key role for the same
• Targeted campaigns with specific messaging beta testing
what works best in which market & then adapting
communication to the same
DISCUSSION