Winning Through Localization
To be successful in emerging markets you need to adapt to local customs, habits, and beliefs.
There are many challenges in building businesses in emerging markets. One technique corporations use to succeed is to localize their products.
But localizing means more than just supporting regional languages. It’s about adapting business practices and products to the nuances associated with a particular region. Here are three companies in India that illustrate how localization can be used to gain a competitive market advantage.
Amazon
E-commerce is one of the fastest growing segments in India. Amazon entered into this market in 2013 and faces stiff competition from local incumbents such as Flipkart and Snapdeal.
One of the biggest challenges for Amazon is the “last mile” problem especially related to missed deliveries. Instead of building a vast network of Amazon lockers as done in the US, they rely on the existing vast network of neighborhood kirana stores. Now, customers can order a product from work and have it available for pickup at a local store on the way home.
By localizing their delivery options, Amazon India is able to meet the needs of its customers more effectively and contribute to the bottom-line of “mom and pop” stores.
Olacabs
Urban transportation is being transformed in India by companies such as Olacabs — a car booking service that lets you arrange rides from point-to-point locations electronically. Olacabs is innovating and trying to beat their competition by localizing to meet customer habits.
In India, credit card penetration is low and many people don’t trust giving out their debit cards for transactions. To adjust to these habits, Olacabs allows customers to pay via cash after a trip is finished.
Also, since most individuals still don’t have smartphones in India, Olacabs lets you book a trip through a website or by calling a telephone number.
Another localization technique Olacabs takes is to offer really low-cost transportation option called the “mini”, which is a small air-conditioned car, with the same starting rate as a autorickshaw. Overall, Olacabs has made it a point to adjusting to the purchase habits of the Indian consumer.
There are over 100 million Facebook users in India. It is projected that India will soon become Facebook’s largest userbase in terms of country. Most users in India access Facebook through their mobile phones. Specifically, phone users breakdown to 65% on feature phones to 35% on smartphones.
To enable a “call to action” on feature phone ads, Facebook takes advantage of a regular habit of Indian users — the missed call. The missed call behavior occurs because of the high cost of voice calls. People dial a number and hang up to informally signal to the recipient to call back. Facebook takes advantage of this behavior to send an SMS or a pre-recorded message to a user by an advertiser.
This localized call to action is familiar to the local customers, and since there are no added costs to incoming voice calls or SMS, a user can learn more about an offer or reward without incurring additional costs.
Localization is an important technique to employ in emerging markets. By adapting to the local practices of people in a country, a business can develop a sustained advantage. It’s one of the best tools to win in emerging markets.
If you like this article, follow me on Twitter — @thecleanmachine. I plan to write more articles about emerging markets.
