How Indian Companies Are Using Technology to Reach New Consumers

Harvard Business Review

A couple of years ago, I was standing on a platform in the New Delhi train station and noticed several
men watching a big Mumbai-Delhi cricket match on a crystal-clear video feed streaming from their smart phones. The service worked as well as any live stream I could pull up at home in Austin, Texas. Yet in some ways the scene was right out of the 19th century — the air was dusty and hot; there were far more passengers waiting than benches for them to sit on; and it was impossible to ignore all the aromas that waft through India’s public spaces.

This tension between 19th century challenges and 21st century opportunities creates interesting dynamics for the 86 percent of global consumers who live in developing countries and the businesses that serve them. The majority of Indians don’t have access to indoor plumbing or electricity; many rural citizens, in particular, don’t have access to high-quality health care and school — but digital technologies have the potential to address many of those challenges.

I was already thinking about this in 2017, when I saw the trailers for “Toilet, a Love Story.” Based loosely on a true story about an Indian woman who refused to move in with her new husband because he didn’t have an indoor toilet, the film resonated across India. Almost half of the country’s population still defecated in the open, according to UNICEF. So, to help improve sanitation and to reduce incidents of harassment against women, Prime Minister Narendra Modi pledged to build 100 million new toilets across the country as part of the Swachh Bharat Mission. Residents could use a mobile phone app to find the nearest toilet, following the advice of billboards that said: “When nature calls, use your phone!” And while stubborn habits and issues with the program’s administration remain, the government provided toilets to more than 600 million people in five years, according to Modi.

The most successful consumer goods companies in India use digital technologies to connect with millions of rural consumers, expand markets by improving economic opportunity, and improve the health and welfare outcomes. Consider the rise of Reliance Jio, the telecom company founded in 2016 by India’s richest citizen, Mukesh Ambani. By providing lower-cost phones and offering consumers free 4G data connections for the first seven months, Jio amassed a huge subscriber base in less than two years and set itself up to reshape all kinds of Indian marketplaces — so much so that Jio has been valued at $65 billion and multiple companies, including Facebook, have acquired a stake in it.

Consumer goods companies need to understand the opportunities — and challenges — this juxtaposition poses.

SMEs and entrepreneurs can reach new customers and markets

The success of IndiaMART, an e-commerce platform, illustrates how companies can expand their own market opportunities by connecting local businesses and consumers to the outside world. Digital technologies facilitate these interactions at macro and micro levels, providing an opportunity to tap both large groups and niche audiences. In some cases, they cater to urban, educated consumers: Prime Minister Norendra Modi loves the Gucci mushrooms that IndiaMART carries. But the site also helps rural consumers — during a visit to company headquarters, I observed dozens of people selling cow dung and urine for use in organic farming.

Facilitating new connections between sellers and buyers can foster prosperity and spending power for SMEs, but it’s good for IndiaMART, too, which has enjoyed exponential growth and recently launched an initial public offering.

And markets can be modernized

Digital technologies have allowed innovative companies to blend online and offline interactions in ways that allow them to reach consumers who are less affluent or live outside urban markets. To a great extent, Indian retail will skip the large shopping mall and big-box phase, leapfrogging instead to digital sales (though bricks-and-mortar and similar in-person interactions will persist).

Thanks to the rapid emergence of digital wallets and payment platforms, online marketplaces such as Flipkart, Grofers and now JioMart have flourished, with plenty of room to grow. According to the Wall Street Journal report, Forrester Research Inc. expects Indian e-commerce sales will more than double to $68.4 billion by 2022 from $26.9 billion in 2018. That’s not just an affluent, urban phenomenon; digital technologies are enhancing the welfare of rural and less-affluent consumers, as I observed in 2018 while conducting interviews in Gurgaon. I went from a conversation with Uber, where managers explained how rural workers were streaming into urban centers to make money as drivers; to an in-depth discussion with the co-founder of Eko Financial, who talked about how their platform allowed for a frictionless, nearly real-time option for those same drivers to transfer money back home to family; and then to a small shop in the DLF Phase 3 development in Gurgaon in suburban New Delhi, where a merchant attended to drivers, delivery-wallahs and others who regularly sent money back to their home villages over the Eko platform. Launched in 2007, Eko caters to urban migrants employed informally. As customers become more familiar with digital payments, they’ve also used Eko to make utility payments or to top off mobile phone credits. Prior to the pandemic, Eko alone was processing domestic remittances worth roughly $330 million a month.

Mold your technology to the market, not the market to your technology

The key to success in this context is to customize the technology to the local market, rather than waiting for the market to adapt to the technology.

Maintaining an efficient supply chain can be especially difficult in developing countries. Companies need to modernize logistics, but in a way that adapts to on-the-ground realities. Consider, for example, the case of Rivigo, a trucking company headquartered in Gurgaon. Rivigo transformed how trucking and delivery can be done in India, adapting both digital systems and the physical construction of its trucks to improve efficiency and quality of life for its “pilots.” In the past, India’s disorganized market and challenging infrastructure meant that truck drivers had to leave home for long periods of time. Because the cabs and trailers of most trucks in the country were inseparable, drivers couldn’t leave a trailer behind at a warehouse and hitch up to a full load, nor could they drop a trailer for another driver to take across the next leg. Rivigo changed that, creating what it calls “relay as a service” trucking that allows drivers to relay trailers from hub to hub, allowing them to stay closer to home and spend more time with family — and allowing the company to keep its thousands of trucks on the move.

Already a hit with drivers, Rivigo became a hit with customers by heightening efficiency and slashing turnaround times. It did this by making each truck into a driving Internet of Things. The company covers trucks and trailers with an array of intelligent sensors that constantly interact with a real-time, responsive logistics network. For example, “smart” tires alert drivers to problems with tire pressure, vertical load, and temperature. Trucking and fleet companies can use the data to measure when repairs might be needed, retain their production and delivery records, and lower the amount of downtime for drivers. The drivers, meanwhile, have an app they can use to track trips, stay in touch with managers, and stay on schedule. All told, the company tracks almost 200 data points, all of which serve as performance measures for drivers. Rivigo slashed 50 to 70 percent off turnaround time and significantly cut costs for clients in the e-commerce, pharmaceutical, automotive, cold chain and FMCG sectors.

Empower your consumers

Imperfect infrastructure — as well as limited digital access and skills — have left emerging markets with shallower data pools than those in developed markets. Language and literacy can also be major obstacles on digital platforms, especially in India, where residents speak 22 “scheduled” languages, 99 other languages, and thousands of different dialects and pidgins.

Companies need to adapt to those realities — and the ones that do so can find ways to empower their customers. When it launched in 2012, SocialCops wanted to bring the Big Data revolution to challenges that affect the well being of billions of people who don’t have robust digital footprints.

One of SocialCops’ most remarkable programs is the Pradhan Mantri Ujjwala Yojana, an initiative started in May 2016 to replace chulhas — the traditional clay stoves that burn wood, coal, dung or other dirty fuels. The World Health Organization estimates that unclean cooking fuels lead to a half million deaths per year, mostly of women who inhale the equivalent of 400 cigarettes an hour when cooking at home. Nearly half of Indian households don’t have access to clean fuel, so the Ujjwala Yojana program — a partnership between SocialCops, the Ministry of Petroleum and Natural Gas, and the country’s three oil marketing companies — set out to provide free liquid petroleum gas (LPG) connections to households below the poverty line.

To make the program work, officials first needed to make sure more people could access an LPG distribution center. SocialCops analyzed more than 6 million data points to identify the best sites for 10,000 new centers. They analyzed clusters of villages to find the best locations, and then provided a visualization platform that allowed officials to make effective decisions. Next they set out to understand customer-application processes. More than 100 million applications generated a deep enough data pool to allow officials to track what worked and what didn’t. At one point, for example, the Ministry noticed that women were disproportionately rejected by distributors because they didn’t have bank accounts. So, they coordinated with another government initiative to expand access to financial services, virtually eliminating rejections based on lack of bank accounts — a step that, in itself, has empowered tens of thousands of Indian women over the past decade.

For government and company administrators, the SocialCops dashboard ensured greater transparency across six levels of hierarchy, from government offices in Delhi down to the citizens in small villages. Top government ministers could look at the village level and see where the program is available, how well it’s running and how to improve it. That unparalleled transparency and insight  helped link the program to more than 22 million women in the first year. In its second year, it reached 40 million women, so they upped their goal from 50 million to 80 million women. According to the SocialCops website, the program now includes more than 72 million connections.

With a little ingenuity, companies can facilitate big wins for disadvantaged consumers using digital technologies — and make a good living doing it.