Can Community-Based Social Networking Sites Encourage Brands

As one of the fast growing economies today, India has become a very attractive market for international brands. The country is expected to become one of the leading economies in the world within a few decades. So what elements make it so attractive? Well, no marketer can undermine the significance of the country's growing middle class and their increased disposable incomes and desire for better lifestyles.  Also, when looking specifically at the Indian consumer, their habits, tastes and needs are also evolving with the market. So with more and more consumers looking to spend their money, why wouldn't you want to get a slice of the pie?

Unfortunately for these international brands, marketing to the masses is not the easiest in India. Let's look at an example. At the end of last year, Taiwanese acoustic manufacturer Kingstate Electronics Corporation expressed its interest in expanding their business globally. Germany is Kingstate's core market but the company hoped to expand into India. During an interview with EFYTimes, the company stated that they felt entering India would be a big challenge for them. They believed it would be difficult to penetrate a market with so many varied tastes, languages and cultures. In a country with 28 states, each with their own language and various dialects, foods, customs and clothes, it could be real marketing nightmare.

In fact, Indians have seen their fair share of marketing blunders. A more comical mishap involved UK food manufacturer, Sharwoods. The company spent millions on a campaign to launch its new savory Indian sauces. The company was confident that their new Bundh sauces would be a hit. Unfortunately, what they overlooked was that in Punjabi, the Indian language spoken by Indians from the state of Punjab, the word “bundh” sounds very similar to the word for “arse”. With so many spoken Indian languages and dialects, a mistake of this nature has a good chance of occurring.

So what can be done to help international brands stay clear of such mistakes?  Could the introduction of community-based social networking sites in India help ease the marketing challenges faced in such a diverse country? I believe they could and the good news for marketers is that a community-based site, LocalCircles.com, was just introduced in Delhi/NCR. Luckily for us, I was able to ask the Chairman and Managing Director of LocalCircles, Sachin Taparia, a few questions about the site.

Mr. Taparia described the site as a being a one stop for local life allowing users to connect with people they have an association with, i.e. neighbors, colleagues, teachers, etc. The company aims to have every neighborhood, work place and school in India on LocalCircles. When I asked Mr. Taparia why Delhi/NCR was chosen as the first city to introduce the site, he explained that trust had a lot to do with it.

“We had to pick between United States and India as countries and we picked India because we can help transform it over time into a higher trust society. In developed markets, for the most part people do what they say and the trust deficit is less. Delhi/NCR is one of the largest metroplexes in the world with over +20M people.”

Since Facebook is the major player in social networking in India, I felt obliged to ask Taparia how he believed LocalCircles stacked up to the competition. He explained that if you have a medical emergency late at night, you don't want to go to Facebook. LocalCircles can help you know such things as what flu virus is going around in your neighborhood and get you advice from a doctor in your area. He further states that this is what is happening now in Delhi and the foundation of the site is having real people, real identities, real addresses and real phone numbers.

“ In India, daily life is tough and Facebook is a getaway for a lot of people. LocalCircles just wants to make their Daily Lives easier and happier.”

Taparia said one of the site's advantages is the understanding of daily life, the trust flow in society and how technology can make it better.  He also pointed out that the site will be building communities that are very hard to build. One main feature that differs from Facebook is the fact that users may only sign up by invitation only. The chairman explained that this is an important feature as it allows them to scale the platform effectively. He stated that through mail-outs they invite neighborhoods ensuring that the individual lives there. Similarly, in school and work, people will be invited by their HR/colleague, parents/school administration. This process is important to ensure that in interest circles people are comfortable talking about themselves and their families.

This focus on trust also helps the company to decide which local businesses to feature on their site. Taparia stated that they are only listing “the best of the best initially”. The site users are then adding their trusted businesses everyday and sharing their experiences with businesses that didn't deliver. The purpose of this is to raise visibility of the good businesses while driving accountability for the others. In the future, the company plans on setting up advertising partnerships with their trusted businesses.

The last question I asked Mr. Taparia was whether he shared my belief that such community-based sites would provide a great opportunity for international brands trying to create a presence in the Indian market. The chairman agreed with my views and stated that the platform can be used for targeted marketing campaigns at a very local level. Further good news for international brands is that there are plans to launch the site in 8 more cities this year and 40 cities by year 5.

What will be interesting now is watching which brands will be jumping for this opportunity.

Sources

• Mr. Sachin Taparia, Chairman and Managing Director of LocalCircles
• www.efytimes.com
• ondeviresearch.com
• www.guardian.co.uk
• www.groudreport.com

Images

• http://en.docsity.com/news/economics/macroeconomics/leap-leap-two-growing-economy/
• http://english.sina.com/business/2012/0914/506569.html
• www.localcircles.com