Contemplating the role of the mobile phone in market creation

I just came across this article titled “The Emerging Markets Cell Phone Index” from SeekingAlpha, an investor’s site. Here’s a longish snippet that encapsulates the basic message – track cellphone sales in emerging markets as an indicator of economic performance.

Cell phones represent the biggest breakthrough the new digital infrastructures of developing nations. At the micro level, individuals once completely isolated by cultural, geographical and economic limitations can suddenly participate in the global market.

At the macro level, new communications systems support an influx of industries — creating new jobs, new consumers and new opportunities. Research shows that greater cell-phone usage can stimulate economic growth in emerging economies.

Africa, China and India are now being thought of as the cash cows of the mobile phone industry. As penetration rates in many developed regions such as Europe approach 90% or higher, the cell-phone industry is looking to new, untapped markets.
Cell phones are a hidden indicator of emerging market performance. That’s because cell phones, and other communications technologies, open new markets by reducing distances.

My, we do sound a bit breathless, don’t we? Well, perhaps just to those of us who’ve done nothing but track the penetration and subsequent influence of mobile phones in the developing world. As an aside, if you’re interested in reading more on this topic, try Ken Banks, Jan Chipchase and for starters.

Lets take this musing a step further, in light of the discussions of the past few days. If we look at one of the key challenges of reaching out to the people at the bottom of the social and economic pyramid, such as creating awareness about some service or product or providing critical information, the wireless platform is a ready made gateway to reach out to vast swathes of people – and – its cheap.

Traditional avenues in advertising and marketing communications – I never thought I’d be using using the knowledge I’d left behind over a decade ago ;p – such as television advertising, banners and billboards etc are far too expensive for your average social entreprenuer or non profit. While there is public service advertising and sponsored awareness creation, these are not always available. We, in broadband nations, have the internet of course, as the fastest cheapest way to reach a global audience but the wide variance in media and communications across the developing world is it’s own stumbling block.

But, we do know that there are almost 3 billion mobile phone users out there, that’s almost one phone for every two people on the entire planet. Stepping away from the mobile platform or the mobile web as simply a tool for social and economic development – yes, it is and yes, its critical – lets look at this from the point of view of market creation.

Is that so ‘icky’ to contemplate? Would lessons from the corporate world of marketing and mass promotion or the advertising world be inappropriate when applied to the erstwhile ‘noble’ task of uplifting the poor? I don’t know, I simply ask because I received an email yesterday that asked me how the Emerging Futures Lab plans to interact with Corporates vs Socially minded organizations.

In India, its been the pundits of the ad industry who’ve taken the lead in figuring out the challenge of marketing to the BoP. Reaching out the millions of niche markets, myriads of languages and dialects, the sheer mass of heaving humanity across our crowded noisy nation has always been a challenge in the marcom and ad industries, regardless of whether we’re launching Coca Cola or Levi’s jeans. Ok, I’ll admit I had more fun with Levi’s because we got to, er, ‘oversee’ a rock show and a few dance competitions in nightclubs ;p but the point being that this challenge of effective marketing (or otherwise) communications has been always been a fact of life.

On a trip to India about three years ago, the then head of my former employer, Aditya Atri, said something to me that today, looking back, was probably the seed of the mobile obsession, he said the future of our business is the mobile. We’are already doing so much on it – more on what ‘we’ did at Result later – and its only going to increase. Look to the mobile. Thank you for your prescience, Atri, wherever you are. And from a post titled “New Delhi notes” written December 12th 2005,

The sweeper who has a mobile phone in a country where until about 5 or 6 years ago, most middle class families didn’t have landlines. Once the urban “poor” aspired to a bicycle, a radio and wristwatch, now they look to cellphones and DVD players.

well, one could add that a mobile phone is a “many-in-one” – I’m sure Neelakantan will add to the Indian preference for “two in ones” and “three in ones”. But the point here isn’t the sales of the mobile, something that’s quite obvious to us now, in 2008, its the ubiquity and the reach of the said device. I can already tell that I’m going to be writing a follow up post on ‘launching a new product in the Indian market aka what were the challenges in 1995 and what lessons can we draw from that’ but let me just finish this long blathering ramble with Atri’s thoughts as written up by me so long ago,

To get the real pulse of the paradigm shift in India go to the smaller towns, there is where you will see the unbridled optimism, the fire in the belly, the attitude shift that has taken place in India from our father’s generation to the current twenty somethings.

Where our generation, he said, (Gen X) figured we’d have to get extra qualifications or IT training to get a decent job, and our fathers were looking for the security of a civil service position with a lifelong pension, the twenty somethings today aren’t even worrying about getting a job, they *know* they will, they see it as their birthright, their approach is

“what can I do to take advantage of these opportunities and maximize my income in the fastest, most efficient way”

It’s an attitude shift in outlook and approach, he said, was the real difference – there’s none of the scarcity mentality that hobbled the populace who remembered The Partition, Independence, rebuilding the country or emerging as a global marketplace – there is a sense of being players in the world, of the real innovation in India.

When resources are scarce or constrained due to environmental variability, people become more resourceful, more creative, have more “jugaad” – “make it happen” mentality – and that, he said, was the root of Indian innovation. How do we make do, how do we make it happen, within our constraints, and take ourselves to that level we see in this interconnected world.

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