Why chat apps are the next big thing for brand communication in India

Last year Life OK!, a Hindi entertainment channel, launched the Bachelorette Chat Buddy on chat app Nimbuzz for the show The Bachelorette, a dating reality show featuring Mallika Sherawat. The chat buddy reached out to over 25 million users in India on their mobile phones giving the makers an opportunity to initiate a dialogue with users.

The ecosystem already exists for chat Apps

The IM is clear on this one, chat apps are the next big thing for brands using mobile communications in India. The ecosystem for this has been developing rapidly from a matrix of cheap handset and falling data package rates. Currently India has 51 million smart phone users which make up 17 % of all mobile users in urban India, even the figures for non-metro India stands at 13 percent. 

Damandeep Singh Soni, Head of India Business Development, LINE, points out that Deloitte forecasts that in 2014, instant messaging services will deliver some 50 billion messages a day globally, as against 21 billion SMS messages. Dhamandeep feels that: “User numbers have climbed quickly for a crop of these services, with Line having more than 370 million registered users. Brands now understand the importance of these platforms for interacting with current and potential customers.”

There is a rapid rise of mobile apps, especially market apps. And the marketers are going where the people are.

Shahnawaz Karim, Marketing Head, Nimbuzz feels that: “For India and most parts of the world, the next bunch of internet users is going to come from mobile. A careful look at the statistics in terms of device penetration show that it has reached households where even the traditional communication platforms like TV and desktops have not reached. In fact, as per the Census, more Indians have mobile phones than bathrooms!"

Shahnawaz adds: “There are several stakeholders that are playing their parts in developing the ecosystem. Manufacturers are breaking ground with really low cost smartphones, network providers are coming up with low rate internet access (with only 98 INR you could use 2G and less than 250 INR you could use 3G for one month), and businesses are providing utilitarian services like online recharge and bill payment through mobile. This is the real power of mobile and thus it becomes imperative for brands to be present and then to engage with users on mobile. Mobile also enables targeted and focused engagement with customers which is equally relevant for big and small brands. Hence the next wave for brands to get hooked to the target audience is through the mobile.”

How can brands use chat apps?

Rahul Razdan, CEO, Mango Games, who was previously the India head of Tencent’s WeChat says that: “Brands should be looking at mobile IM services who have the vision of creating a larger eco-system involving marketers, utility services, content, and social features under one flagship product. Mobile communication apps have grown from their initial value as free SMS replacements, and therefore are an important medium for brands, especially those targeting youth.”

While IM apps may be perceived as a private space it’s also the place where people spend a lot of time while on their mobile. Rahul advises that the best way to look at IM for brand communication is to make sure that there is a balance between when the brand’s communication adds value, and when it becomes spam. “Historically, email marketers have struggled with that balance. On the other hand, SMS got completely abused by brazen marketers. The IM platforms which have provided legitimate avenues for brands to talk to their consumers should aim to preserve that balance. I know at WeChat we had some strongly enforced platform policies on what brands could do, or not do, and these were intended to keep that balance in the ecosystem.“  

Shahnawaz says that Nimbuzz’s experience shows that users don’t mind these messages while it is not intrusive and is adding value to the user in terms of contest or even give aways. “Some industry reports also show that messaging app users are more likely to engage with brand messages than those of other category applications. Since Nimbuzz promotes brand engagement via chat buddies that are optional for users to subscribe/unsubscribe to, there is no issue with breach of privacy. We believe that if done strategically, it is possible to engage effectively with the user without disturbing their experience within the app.”

Examples of Brands using IM apps

Shahnawaz suggests that the most engaging route to take is when the customer has a choice and needs to opt-in to engage with the brand. He adds that: “If a brand develops a chat buddy on Nimbuzz, the user can choose to subscribe to it and then engage with the brand as they would with any contact in their friend list. For example, Perfetti wanted to interact with Nimbuzz users and created a chat buddy for their brand Mentos to generate a campaign named - ‘Khuni Kaun Hai’ which enabled users to solve a murder mystery for Mentos and win exciting prizes.”

Rahul says that: “On WeChat, we had some of the best consumer brands which used the WeChat Official Accounts platform to keep in touch with their audiences. PVR, Channel [V], Colors, 9XM, Fever 104 FM, Hungama Music, Big Bazaar, Café Coffee Day, Clear Shampoo have all used the WeChat Official Accounts platform. My personal favourite example is the PVR account, which reaches out to its followers every Thursday informing them about the next day’s release, getting a dip-stick feedback from them, and sharing some gratification in the form of discounts and tickets with the enthusiastic followers.”

“Internationally Nike, McDonalds, Starbucks, Domino’s, Burger King, and even the United Nations are using WeChat as a key part of their consumer engagement on mobile. Bollywood marketers have been among the earliest to understand the value of the platform, and have used it quite effectively. Matru Ki Bijlee Ka Mandola, Kai Po Che, Lootera, Shudh Desi Romance, R…Rajkumar, and Yaariyaan, all of which are very popular with the youth, benefitted from their use of WeChat as a platform for audience engagement.”

Damandeep says that: "LINE recently partnered with Groupon to offer LINE users to bag exclusive deals from Groupon. This new service entails exclusive ‘LINE only’ deals, weekly deals and a one-of-a-kind ‘Manic Monday’ deal where the users get a chance to take home freebies. “

LINE also offered brand stickers developed for movies like Dhoom3 and Krrish 3.

Privacy issues for brand usage of IM apps

As a huge amount of data passes through IM apps, brands need to be careful about privacy issues.

Rahul says that: “I do not think any of the mobile IM players are at this stage using that data. I also think it will run into ethical issues if the consumers’ information, even if anonymised, is passed on to marketers without the users’ knowledge and explicit consent. The best way to go about this is by having an opt-in system to start with, backed by a single opt-out facility.“

Shahnawaz agrees, saying: “We respect the privacy of our users and do not store user data or conversations on our servers. Yes there are a lot of data that is being transacted. But our users are here to enjoy free communication and we would like to stick to that without breaching their privacy.”

LINE users too have the choice to opt in to receive messages from brands.

The future of mobile brand communication

Damandeep says that in the future, there will be more communication services that add a twist to simple messaging, such as time-limited services, or themed services that make use of photos, location information, or feature Q&As.

Damandeep adds that: “In the short/medium term, we believe it will move from the simple IM options of the first generation to a second generation of multi-IM services. This trend will spread from developed countries to developing countries. We also believe there is a possibility in the short term for developing countries to create messaging apps that will function in poor network environments.”