Business Is Booming; Be Scared
Covid-19 has forced almost everyone into re-planning. However, for a ‘lucky’ few companies, business is booming. If you work in the marketing departments of such firms, you should be worried.
There is going to be a drop-off.
Zoom went from 10 million DAU in December 2019 to 200 million MAU in 141 countries as of March 2020. In USA alone, sales for hand sanitiser producer Purell jumped 313% between February 22 and February 29. $4.50 dollar bottles of Purell were being re-sold for over $50 online in early March.
In India, there have been similar jumps. Unsurprisingly, medical and pharmaceutical company stocks are soaring. Customer-facing delivery companies like Swiggy, Amazon and Dunzo all saw a bump in orders when the lockdown was announced.
But, how do you market an inability to scale to the problem, and an insecurity about what happens after the crisis?
The Problems of Success
Some of the firms that have seen booming demand has been those providing work-from-home aid services. Zoom, Microsoft Teams, Google Hangouts, Flock.
Among these, the CEO of Slack recently put out a twitter thread explaining how it has been hard for the company to provide value in what many would consider ideal conditions.
Scaling their operations has been a challenge. For Slack, their major problem had been pivoting from enterprise-first UI/UX to a user interface that could be used by anyone, regardless of tech expertise.
Meanwhile, they also had to worry about maintaining team size, not bloating the sales department to deal with these incoming leads, and social distancing measures to keep employees safe — all while working harder than they ever have!
Similarly, Indian firms have also seen scaling issues during the lockdown. Delivery firms were inundated with orders in the first week, and were unable to keep up. Additionally, caring for the safety of the delivery executives — from both the virus and the police who are cracking down on those seen outside — is proving to be challenge.
In reality, despite the initial bump in orders, many delivery companies have seen declining orders. An inability to fulfill initial orders, fear of delivery executives as disease-carriers, and a cost-burden of paying the delivery executives even though orders have dropped off has left these companies in a bind.
A marketing executive at Zomato told me that all marketing budgets had been suspended during the lockdown for two simple reasons; government uncertainty, and long-term uncertainty.
He did not know which regions would continue to allow deliveries and for how long, and he did know how to advertise the company with regards to its long term market position.
Similarly, medical companies are under pressure to not just build supplies for battling the coronavirus, but also for aiding governmental public relations. With a tug of war over the malaria medicine hydroxychloroquine (HCQ) between the American and Indian governments, producers of the drug have been forced to build enough supply for both countries.
HCQ has yet to be proven to cure coronavirus, and there has been no significant increase in malarial diseases to justify the increased spend and pivot towards HCQ production. What happens to those excess supplies, production and supply capabilities after this crisis blows over?
The Invisible Hand
In 1776, British economist Adam Smith wrote The Wealth of Nations. In it, he describes a now common phenomenon in capitalism known as the invisible hand. He states that this invisible hand will correct all markets towards resource-efficiency and price-efficiency over time.
This theory, in one form or another, is keeping most of the world’s businesses comfortable during this crisis. If you can survive the next few months, business will eventually stabilise. As we are seeing in Wuhan where the pandemic originated, public spaces such as malls and restaurants are opening up again.
However, for all those businesses that are growing right now, that is a prediction of doom. This boom is a bubble, and the permanent future only guarantees business contraction.
However, if your customers are based in regional India, there is an opportunity to be exploited. This is a chance to prove your brand to market and to build new habits that will survive the shift back to normality.
Build Your Brand, Not Your Business
Ogilvy recently put out a list of actions brands can take to boost their profile on social media. As recipients of my newsletter yesterday will remember, it talks a lot about using this time to build a brand connection digitally.
However, these principles can also be used in regional India. Swiggy and Zomato can provide deep discounts (as they are doing) and use blanket marketing in Tier-III and Tier-IV towns. They have traditionally struggled there as people still don’t trust online services. If they can prove their worth and build trust, there is no reason their number of users needs to decline once the lockdown is lifted.
Similarly, soap and hand sanitiser companies in India have an opportunity to build cleanliness habits among regional users. As the famous book Freakonomics records, Listerine was able to create a habit of using mouthwash by linking bad breath to marriage prospects in the 1920s.
Today, the soap industry has the chance to effectively create a habit of soap usage in regional India today. The industry was able to do so in urban India after liberalisation, as soap became a part of Tier-I citizens’ healthcare routine. As Sudhir Sitapati states in his book The CEO Factory, in the 1980s even government ministers believed in olive oil rubdowns over soap-based bathing!
In ten years, we could be making similar comparisons in rural India, if everyone takes their lead from Dettol. As I mentioned in last week’s newsletter, their new ad is an inventive take on how to create a habit, and subtly link it to a brand.
Are you unsure of how to use the lockdown to build a brand connection with new users in regional India? Please reach out to me at tarutr@getlokalapp.com, or at malhotratarutr@gmail.com.
If you are uncomfortable talking to me over email, you can DM me on my LinkedIn page or my Twitter profile. I would love to talk to each and every one of you personally!
If you liked this article, please do consider subscribing to my weekly email newsletter. It provides a brief and links for all three weekly articles, as well as some interesting little tidbits for subscribers only!
