Six things performance marketers need to know about India

Set to become the world’s most populated country in 2023, India has a growing middle class and strong smartphone and CTV adoption. Read PMW’s bluffer’s guide to the region from our experts inside the country.

India represents a huge opportunity for brands and performance marketers looking to tap into new tech-savvy and increasingly affluent audiences. But as its rapid expansion continues, India’s first world ambitions are still blighted by some third world problems. 

As part of PMW’s Global Spotlight series, we delve into the popular channels, biggest challenges and recent success stories to help performance marketers optimise their investments and plan future growth in the region. 

Market overview: bigger than China with a growing middle class 

According to United Nations, India is projected to surpass China as the world’s most populous country in 2023. India's population currently stands at 1.39 billion, while China's is 1.41 billion. But with higher birth rates, 86,000 babies born in India every day, compared to 49,400 in China, India is on course to take the lead in 2023 to hit 1.65 billion people by 2060.

Not only will India boast the world's biggest population, but it's poised to become the world's third-largest consumer market by 2030, trailing only the US and China. Rapid economic expansion in the nation is improving employment and business prospects, which in turn is raising disposable incomes.

A growing number of people are moving  from the economically weaker class to join the middle class as the benefits of growth spread. As a result of its expanding size and rising wages, the middle class is overtaking all other market segments in the country. In fact, by 2025, there will be 580 million people in India's middle class, up from as many as 80 million today.

E-commerce is expanding quickly, so online retailers are lured to the Indian markets, which are expected to grow rapidly over the next few years. In India, there were around 120 million online shoppers in 2018, and by 2025, that number is predicted to rise to 220 million.

According to Ernst & Young, India’s consumer digital economy is expected to be a US$800 billion market in 2030, around 10x growth on 2020. 

Media channels: Android heavy audience embracing streaming services

The smartphone has become the highway for Indians for entertainment, e-commerce and livelihood. India has over 1.2 billion mobile phone users and 600 million smartphone users.

"While all other mediums co-exist, smartphone trumps all channels in engagement and time spent," says Suraja Kishore, CEO of BBDO India.

The penetration rate of smartphones in India is estimated to reach 96% by 2040, from 54% in 2020 and 23% in 2016. When it comes to Android vs iOS, most users can be reached on Android – we’re speaking of 95% in comparison to a 3 to 5% of users on iOS. The leading categories on mobile are social media, short-form video formats and gaming – this is where marketers should focus their attention.

"Looking at the fast penetration of smartphone devices in India, it comes as no surprise that mobile remains the most popular media channel in the country and the most profitable one for advertisers," says Partha Sharma, Associate Director of Growth at M&C Saatchi Performance. 

Meanwhile, connected TV (CTV) is another hugely popular media channel in India.

"We’re noticing a growing CTV trend which presents key opportunities for brands to connect with hard-to-reach TV audiences, engage people across streaming services, and lift brand performance to grow bottom lines," says Sharma. ”Leading brands in India such as Livspace, Swiggy, and Mamaearth have all used CTV advertising to reach relevant audiences and drive results."

Adspend trends: TV still dominates with gaming and e-sports growing fast

India's largest advertising segment is  TV and video  with a market volume expected to reach US$4.74bn in 2023. 

Meanwhile, e-commerce companies lead the pack when it comes to adspend, but spend in the fintech and D2C sectors is rising.

"While in 2022, Indian adspend was affected by global macroeconomic factors like increasing lending rates, falling stock prices, war conflicts and more, this year digital adspend in the country is set to grow at 15% and reach a market value of US$10.83bn," says Sharma. 

Most growth is driven by digital – around two thirds – but there's enough headroom for more. 

"The pandemic fuelled many consumer trends that accelerated digital consumption," says Joono Simon, CEO and Chief Creative Officer at Brave New World. "On the back of rising interest in interactivity, gaming and esports were one of the few immediate beneficiaries. With easy access to content from multiple languages and genres, people are now watching a lot more multilingual content. This is showing exponential growth in regional content – both quantitatively and qualitatively."

Attitudes towards consumer data privacy: new legislation receives broad support

The conversation around data privacy in India is picking up with The Digital Personal Data Protection Bill, 2022 further strengthening the adoption of measures in the country. 

A Cisco study found that Indian consumers are “privacy active”, meaning they care about privacy and are willing to act to protect it. In the survey, 80% of respondents from India said they were strongly in support for National Privacy Laws.

But [processes to ensure] data privacy are still very much in their infancy.

"India is a country with a first world ambition but third world problems, therefore digital solutions for us is a breakthrough," says Kishore. "The excitement to participate in e-commerce, the lure of content that’s not censored by family or institutions and having an individual space within a collective is driving the adoption of digital at the cost of data privacy currently."

Regulations and barriers to marketers: consent still a grey area as e-commerce booms

But there is the Digital Personal Data Protection Bill, 2022. The main principles of the bill are individual consent, notification of data breach, transparency (privacy policies and prior notices outlining data processing practices), purpose-based processing, technical security, and the rights of people who provide sensitive personal data, like a social security number, or personal data with a high level of sensitivity, like a name and email address.

"After much deliberation, India recently introduced a data protection bill that has relaxed rules on cross-border data flows that could relieve big tech companies," says Simon. "Consent continues to be the primary ground for processing data, and there is still a considerable amount of ambiguities for big tech and, most critically, for India’s booming e-commerce sector."

Top 3 social networks, shopping platforms and apps

Social networks: Instagram, Facebook and Snapchat "It’s interesting to note that the growth of LinkedIn in India is remarkable after the pandemic," says Simon. "A Hindi version of LinkedIn has been launched to target Hindi speakers making India the second biggests market for LinkedIn after the US."

E-commerce: Amazon, Flipkart and Myntra

"Amazon, Flipkart, and Myntra would be the big three, closely followed by Snapdeal, Ajio and Nyyka,” says Simon. “The rise of social commerce platforms like Meesho has undoubtedly set the cat among the pigeons."

Apps: WhatsApp, Instagram and Facebook

Success story: Bliss Club has strong social game

#Unsponsored by Bliss Club was a strong paid media push on IG and YouTube+ ads, led by real women and influencers. The brand experience is well-rounded for a customer once they land in its universe.

“We have seen very promising results on local social media channels and short-form video apps such as Moj and Moj Lite. Additionally, by leveraging in-app gaming inventories such as Unity ads, Applovin, we’ve been delivering consistent results when it comes to performance campaigns," says Sharmae.

"We use multiple demand side platforms based on the campaign requirements to drive performance. The benefit of a programmatic channel is multifold, right from capturing the audience at different points of their purchase journey and, through data, flowing them through the funnel to a purchase."

By Matthew Keegan


Performance Marketing World