Part 2: The Engagement Conundrum: What to do in Emerging Markets?

This is the second installment in a two part series exploring the notion of consumer engagement: what it means, how it’s defined, and how it can be employed – particularly if you're operating in or entering into emerging markets.

In the last post, we examined what consumer engagement is, and how it can be a complex, often misconstrued metric to navigate. In this installment, we’re going to delve a little deeper and explore how engagement works, with a specific focus on emerging markets.

In the coming years, emerging markets will have a significantly larger addressable customer base than more mature, established markets. Combine that with growing middle classes who have increasing discretionary spending, and you have a massive number of potential new consumers.

Now, that’s all very well and good, but if you don’t understand how to engage consumers in developing economies, then that addressable customer base means nothing.

The general rules of engaging consumers – to understand what value means for your customer, and to let consumers choose how they interact with you – holds true for both mature and developing markets. However, the skills used to achieve successful consumer engagement in mature markets will not necessarily translate over to developing economies. As Khanna, Palepu and Sinha write in their HBR article:

“Successful companies develop strategies for doing business in emerging markets that are different from those they use at home and often find novel ways of implementing them, too”

This is because, quite simply, emerging markets operate in their own way.

For example, a McKinsey survey found 92% of Egyptians sought recommendations from friends or family before purchasing food or beverage products (this is opposed to only 29% in the UK). This is due to a higher mix of initial buyers who have little or no history with the brands, and therefore positive WOM can lead to rapid social and cultural validation.

And because people are more likely to recommend products they feel engaged with, those companies willing to invest early in engagement tools and solutions can expect to gain customers loyalty.

The most effective engagement recognizes that consumers drive the experience, by determining when, how and why they engage. Therefore, businesses have to evaluate their abilities to deliver on the engagement process. Particularly for companies operating in or entering emerging markets, importance lies in understanding the technological trends and capabilities for different regions.

Let's talk about the smartphone revolution occurring in developing countries. This year, the ten largest smartphone markets in the world (all of which are emerging markets) are set to see a combined growth of USD 10 billion, of which nearly half will come from India (USD 4.8 billion).

Over the last 12 months, there has been a 120% increase in web traffic driven from mobile devices to e-commerce sites – and this is only going to grow. In India alone, it’s anticipated that online purchasing is expected to increase to more than USD 30 billion – 16 times the current market – in the next six years.

So, how can your organization capitalize on this?

First and foremost, have a mobile first strategy. Consumers in developing economies have jumped right past desktop computers and straight to mobile. In short, your mobile strategy matters more in emerging markets. Avinash Kaushik differentiates the two types of engagement experiences organizations focused on mobile need to get right: Mobile Websites, and Mobile Applications. You can read his full post here, but the gist is simple: Mobile Websites are generally multi-purpose, whereas Mobile Apps are more focused and specific, so make sure you address this when building apps and websites.

Using mobile devices for social media is also going to play a significant role. A recent Accenture survey found that customers in emerging markets prefer to engage through social media, with one-fourth of consumers stating they’d prefer to do business with a company they can interact with on social media. Also, consumers want to see original content directly from companies. Organizations that don’t offer these options through mobile platforms could deprive themselves of valuable touch points.

But there are still challenges facing consumer engagement through mobile technology in emerging markets, with connectivity being a main issue. However, this too can be overcome by optimizing your mobile platform for the circumstances.

For example, when consumers in India started getting frustrated with Snapdeal’s buying process due to dropped connections and delays, the company shortened the process to three clicks. Purchases over the mobile platform grew from 5% to 60% over 14 months.

Because engaging consumers through a mobile platform is going to help define organizational success in emerging markets, getting your mobile strategy to be data cost proof is critical. We here at Mavin are working on even more ways to address this obstacle.

In short – if you want a business with serious growth potential then focus on engaging customers with a mobile first strategy, acknowledge the cost of data, and always make life easier for them with a good user experience and solid offerings designed specifically for mobile.