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Tracking the growth of social media in emerging markets
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Tracking the growth of social media in emerging markets

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  • 1. Tracking the Growth of Social Media in EmergingMarketsThe Marketer’s GoldmineEmerging markets, whichconstitute for approximately60% of the world‘spopulation, are rapidlytaking over social media.Although the primary reasonfor people in these marketsto join Facebook or Twitterwas to stay in touch withfriends, this is graduallychanging. Emerging marketconsumers are using socialmedia to share content andphotos, shop online,recommend products andpost reviews among otherthings. According to thenew GlobalWebIndex SocialNetworking Map 2011 study,people in emergingmarkets such as the Philippines and Indonesia were much more engaged in social networking when compared tothose in advanced markets. This, along with the fluctuating economy in developed markets such the USA, is drivingbrands to explore new markets which are brimming with opportunities. Despite the challenges that come withmarketing to foreign customers, our research showed that brands were more than willing to take their chances. Hereare some reasons why: Recent studies show that the BRIC markets (Brazil, Russia, India and China) will collectively have 2.577 billion mobile phone subscribers by 2014. Besides texting and calling, a large percentage of these users are expected to use their mobile devices for networking, blogging or making online purchases. For brands specifically looking to sell their products or offer their services abroad, social media marketing is the easiest and the most cost-effective way of entering new or emerging markets. According to research by TNS Digital Life (2010), online consumers in emerging, rapid growth markets are more engaged than those in mature markets. This means broader reach, more opportunities and a larger customer base for brands with ambitious growth plans. The study also showed that Egypt and China had comparatively higher levels of digital engagement than Japan, Denmark and Finland. Malaysians had the highest number of friends across various networking channels (233 on an average), followed by Brazilians (231). A 2011 study shows that Brazil, at 86%, has the highest level of social penetration. Even within developing markets, ethnic minorities visited social networking sites more frequently than non- Hispanic whites.The rapid increase in social network users in emerging markets has dispelled the myth that people in these countriesare slow to adapt to social media. A large chunk of Facebook users come from countries such as India, Brazil andMalaysia. In fact, Facebook use is growing faster in Africa than on any other continent, while the Asians simply love toshare photos over the internet. For advertisers and brands, these largely untapped markets look promising. Whileeach country has its fair share of quirks and challenges, we believe that emerging markets are a social mediamarketer‘s goldmine.© Position2, Inc. 1
  • 2. Marketing Beyond Borders Unlike earlier, when people in countries such as Russia or India had to wait for a product to be ‗imported‘ from developed nations, buying something today is just a click away. The growth of e-commerce has benefited both consumers as well as brands immensely. Today‘s marketers are no longer confined to advertising or selling a product within their home countries. Whether it is retail brands or FMCG companies, it is as simple as promoting their brands on the plethora of networking sites out there. What makes social media a lucrative platform for online marketers looking to discover emerging markets? More than the Big Three: Besides Facebook, Twitter and LinkedIn, there are other social networks in emerging markets that attract users too. For social media marketers, local platforms equal to higher possibility of reaching local users, in the language they are comfortable with and on the channels they are most likely to use. For example, QQ is China‘s largest social network; V Kontakte is the most popular in Russia; Orkut is strong in India and Brazil; Hi5 leads in Peru; and Maktoob is the most important in the Arab world. Also, in many countries, Western networking channels are blocked. This however, does not mean marketers should give up on online promotional activities in these nations. Our suggestion? Try the popular local equivalents. However, recent research by eMarketer indicates that consumers in D&E markets like Brazil are gradually opening up to Facebook and Twitter, challenging the dominance of Google‘s Orkut. Twitter was ranked #1 among the top ten social networks used by consumers in Brazil, closely followed by Facebook. Here’s a tip for brands entering emerging markets: do your homework and study what channels are popular in the country you wish to advertise. This way, your chances at successfully reaching the right audience are higher. Wallet-Friendly Marketing: Rewind a few years back when American and European brands hesitated from advertising in emerging markets because of the expense involved. Print and TV ads required huge investments, and did not always guarantee returns. A lot has changed since then. The advent of social media tools like Facebook, Groupon and Twitter opened up a world of marketing opportunities for Western brands. The biggest USP of social advertising in emerging markets? Low-cost investments with little worry about the returns. When American company Heinz launched its ketchup and other products in India, the company‘s biggest challenge was gaining visibility. Additionally, Heinz faced the risk of being overshadowed by Kissan, which was synonymous with ketchup in India. Instead of investing all its marketing dollars in putting up billboards and print ads, the company advertised on YouTube. The award-winning commercial, which required comparatively lesser investment, was a huge success and helped the brand test the market before rolling out offline campaigns.© Position2, Inc. 2
  • 3. Reaching Out to Economically Empowered Consumers: The incorrect perception that emerging nations are economically weak or unstable is gradually changing. The International Monetary Fund has predicted that the total GDP of emerging and developing economies will equal those of advanced economies by 2013-14. Some of the so called ‗emerging markets‘ are not just technologically advanced, but also boast consumers with solid disposable incomes. These consumers are willing to try out new products and are open to the idea of shopping via social networking sites. Simply put, consumers in these markets have the money and are willing to spend it; for Western brands dealing with slow domestic sales, it can‘t get better than this. Emerging Markets vs. Developed Markets: The Fundamental Differences in Marketing While people across the world join social media for common reasons such as connecting with their friends, blogging about their experiences and sharing information, brands need to keep in mind that social media marketing is not a one-size-fits-all endeavor. There are certain fundamental differences between marketing in developed markets versus emerging markets. Social networking behavior is largely dictated by cultural differences and economic disparities that exist in developed, as well as developing nations. This presents a challenge for brands designing universal social strategies and requires them to analyze and understand the varying social networking behavior across different markets. Low-Internet Penetration: While consumers in emerging countries are rapidly going ‘social‘, one of the biggest challenges online marketers are likely to face is low-internet penetration. Unlike advanced markets, some developing countries are still faced with this problem. However, getting around this problem is simply a matter of designing marketing messages that are easily viewable in mobile format. According to BCG‘s September 2010 report The Internet‘s New Billion, BRICI countries—Brazil, Russia, India, China, and Indonesia—will represent more than 1 billion internet users by 2015. Many of these users are expected to develop distinct internet usage patterns, including major reliance on mobile phones as their main access point. Overcoming the Language Barrier: Brands that are determined to establish a strong social media presence in these countries don‘t let language issues deter them from targeting their customers. According to Internet World Stats, English is still the most widely spoken language online. Yet, it only accounts for a quarter of all online usage, with simplified Chinese running a close second. Although bilingual users may look for important information in English, they are more likely to engage in social media in their own language. In our opinion, brands turning away from these markets because of language barriers are overlooking an important demographic. The answer lies in hiring native speaking translators who are also social© Position2, Inc. 3
  • 4. media experts. Although machine translators are comparatively inexpensive, they are not usually accurate and cannot understand informal linguistic terms that are usually used in social media. Comfort with Remote Payments: Much before the concept of online shopping caught on, the Americans were already comfortable with purchasing products remotely using catalogues, infomercials etc. With the emergence of e-commerce, they adapted faster to virtual forms of payment by using credit or debit cards, unlike their counterparts in emerging markets. People in emerging countries were slower to get accustomed to the idea of paying virtually and preferred to use cash and pay in person. Although this is gradually changing, for online marketers, the ‗mode-of-payment‘ is one of the biggest challenges they face. In order to overcome this hurdle, here‘s what we suggest: a) use virtual coupons (e.g.Groupon) or b) partner with a local agency to work out the cash-on-delivery system. Creating a Solid Online Marketing Plan While creating marketing messages and social media campaigns for audiences in emerging nations, brands need to keep in mind the cultural differences, economic situation of the region, and have a thorough knowledge of customers‘ online buying behavior. A solid online marketing strategy is vital for brands that are keen on succeeding in these markets. Here are some key points to be remembered while creating an online marketing plan for emerging markets: Educate your Customers: It would be incorrect to assume that your target audience has prior product knowledge and knows what your company does. As an online marketer entering a new market for the first time, educating customers about your products is a must. Targeting an audience that is unaware of the services offered or the products being marketed increases the possibility of your promotional messages getting ignored. The best approach would be to effectively communicate what your company does before launching a complete social advertising campaign. Understand the Culture and Behavior: Countries such as India, China, Russia, Malaysia etc are loosely grouped as ‗emerging markets‘. Yet, your marketing strategy for Indian customers, for instance, may not be as well received by those in Russia or vice versa. Our research shows the online buying behavior in these countries is largely dictated by the culture unique to that region. As a marketer aiming to engage with your customers via social media it is important to do some background research and understand what drives them. When American coffee giant Starbucks, decided to strengthen its footprint in China, the company wisely decided to go into location-based marketing via micro-blogging, Weibo. There were three things that worked for Starbucks 1) Weibo is China‘s third most-visited website, with vast user base and strong brand awareness. 2) Having done the required background research, Starbucks understood that the Chinese were not open to strangers and especially did not like the idea of Western networking sites. By leveraging on the popularity of Weibo, the coffee company managed to reach out and engage with their target customers. 3) The predominately tea-consuming population of China was trending towards coffee, especially the younger social media savvy demographic. The ‘Pay Less, Shop Often’ Formula: As discussed earlier, consumers in emerging markets are more financially empowered than ever before. However, the recent economic empowerment has had little effect on the ‗hunt for bargains‘ approach to both online as well as offline shopping. Most often than not, the bargain hunters are on the lookout for the ―less than $2″ offer on their local deal-of-the-day website. Online marketers targeting this demographic should understand that these consumers wouldn‘t mind shopping for the same product frequently…as long as it is marketed as ‗inexpensive‘.ConclusionEmerging markets are e-commerce magnets. What makes countries such as China, Brazil, Russia etc the marketer‘sgoldmine is the improving economic situation in these regions, as well as people‘s willingness to shop online.Marketing in emerging countries comes with its unique set of challenges. This, however, has not deterred popularWestern brands such as Nike, L‘Oreal and Starbucks to name a few, from successfully establishing a strong presence inthese countries via social media. While internet connectivity can be a hurdle in some countries, the rise of mobile© Position2, Inc. 4
  • 5. social networking can help brands connect with their customers. We expect to see a significant increase in mobilesocial media users in the years ahead.Earlier, brands that had otherwise established a solid social media presence in advanced countries, shied away fromemerging markets because of cultural differences and linguistic issues. For today‘s marketers these factors are hardlyperceived as barriers. While understanding the customer, studying their shopping behavior and cultural make-up doesrequire time and effort, many brands are willing to go that extra mile. This is because of the exponential increase inthe number of people engaging in foreign language social media channels. Also, the fact that social advertising inthese markets does not require huge budgets is an added advantage. That said, emerging markets are undoubtedly theworld‘s fastest growing consumer markets; for companies looking to give their sales charts a shot–in-the-arm, thesemarkets certainly look promising.© Position2, Inc. 5
  • 6. About Position2Position2 is a Search and Social Media Marketing firm that delivers continuous growth for our clients using ourproprietary ―Surround and Intent‖ Marketing Methodology, delivered by our products. Our proprietary methodology isa result of years of experience in working with diverse clients to deliver customer acquisition goals through searchengine optimization (SEO), social media marketing (SMM), and Pay Per Click (PPC) and online media advertising.Position2 was founded in 2006 with funding from Accel Venture Partners, and has offices in Palo Alto, Bangalore andMumbai. Position2 is a certified agency with Google, Yahoo, Bing and is also part of the Google Adwords advisorycouncil.Position2s flagship product is Position2 Brand MonitorTM, a platform that allows users to listen, discover and engagewith social media conversations in real time. With a team of over 100 professionals, Position2 also provides expertisein online marketing solutions: SEO, PPC, Media and Advertising.Position2 works with leading global brands:This article is also available on the Position2 Blog: http://blog.position2.com.For more information, visit http://brandmonitor.position2.com or email info@position2.com.© Position2, Inc. 6