Digital Marketing in the Developing World

The recent growth trajectory of India’s economy has created a huge middle class of over 500 million people with increasing levels of disposable income and created an ever-growing segment of small-and-medium enterprises (SMEs) that provide a range of services which did not exist even a decade ago. Needless to say, the competition is highly intense. However, firms are doing very little to differentiate their products and services from their competition and as a result price wars are a routine occurrence.

There is a huge opportunity in India (and in other developing countries) as a vast majority of the small and medium-sized firms in the developing world have limited to no digital marketing strategy. These firms still rely on archaic traditional marketing methods to acquire customers and the intensity of the competition is cutting deeply into the margins of such firms.

I spoke with a very savvy young entrepreneur who runs a chain of home goods stores in Chennai, a city of 12 million people in India. This business has revenues of around $3.5 million is considered to be a medium-size enterprise in India. He expects his sales volume to triple in the next three to four years. When I queried him about his marketing strategy, he said that his firm does not have a marketing strategy. Further, he revealed to me that he does not even have a website and that he does not see the need for one. But I pressed on and told him about Groupon, Gilt City and LivingSocial. He was fascinated by the business concept and began to see the potential of digital marketing. I also spoke with several other businesses of similar size which did not even have a website. This trend is not unique to India and several other firms that I have spoken to in other developing countries are in the same state.

My observations make be believe that that there is going to be a huge opportunity for digital marketing in the developing world in the near future.  These countries have a huge market place and millions of small entrepreneurs who fight hard for business. I feel that market forces would force SMEs in the developing world to adapt digital marketing as it is a strategy, which could prove to be an important source of differentiation for such firms and offer them a competitive edge in this highly fragmented business landscape.