This post is an interpretation of a video from TEDx Talks by Manu Kumar Jain, who brought Mi to India and Now Mi is the number one brand for smartphones in India. I’ve made it a way so that it can help you in your business or career. Basically, this post is for and by Indian people and businesses.
In this blog post, I’m going to talk about something which is fascinated me over the last three years which is how can you build a brand without real advertising.
Historically, people have thought that marketing is equaled to advertising. The most convenient way of building a brand or setting up a business is to basically, launch a product, do a lot of traditional TV ads and then assume that people will come and buy it.
But, is it the only way to build a brand or setting up a business? This is what I’m trying to question today.
Let’s talk about 80s
Starting from the beginning. In the 80s, the single TV channel named ‘Doordarshan’ was the only way to consume media. After some time like in the early 90s or late 80s, one more channel launched, so people were starting to have a choice now. The first channel was DD and another was DD Metro. Now people could switch to any of the channels.
With this DD Metro (Another channel lauched after DD) coming in, a lots of new brands started showing their TV Ads. In fact, at that time, people used to consume the stuff that was shown on the TV Ads.
There were some places where people may connect and access to the Internet in the 90s, to name a few places, IITs, colleges, etc were the common places to access the Internet. The popular search engine of the 90s was Yahoo! And for most of the people (or they believe), computers were the only means to access the internet.
In actual, this blog post is about:
The Marketing Strategy of Mi Smartphones in India
by ‘Manu Kumar Jain’, including some case studies of popular brands.
Is Advertising necessary to build a brand? Hear it from Xiaomi India Head, Mr. Manu Kumar Jain.
About Manu Kumar Jain
Manu Kumar Jain is the Country Manager and India Head for Xiaomi, which holds the Guinness Record for the “most number of products sold on a single online platform in 24 hours”. He has been responsible for putting the Chinese company in India’s top five-selling smartphone brands, in record time. He features prominently among Fortune India’s 40 under 40 (2015 & 2016) and Business Today’s India’s top executives under 40 (2015). Jain also features among GQ’s 50 most influential young Indians (2015) and Economic Times’s 40 under 40 (2016).
If you’ve watched the video, you can skip a few next headings and if not, keep reading.
Many of you know about ‘Mi’, Mi is a brand makes smartphones and other electronic gadgets. But you are less likely to know about ‘Manu Kumar Jain’, he is the guy who brought Mi to India and did marketing this brand. Today, they are the number 1 smartphone brand in India.
Let me share with you an interesting fact, Manu Kumar Jain didn’t know that the Internet can be accessed on a mobile phone until 2010. After that, his wife gifted him a phone and taught him ‘you can access the internet on smartphone’.
You were no longer to stick to the desktop or laptop, you can access the Internet while you’re traveling, anywhere on the go. This was the moment when the idea tossed up into the Manu’s mind, which defined him. He was like, ‘The world is changing, I can do something better, something much more exciting in my life‘.
Redefine the Distribution Network
Then they started Jabong, Jabong was a new way of selling products. You might know, Jabong sells clothes, shoes, and many other fashion products online. They were trying to redefine the distribution network.
They were wanting to sell the products online which are available offline. At that time, they thought they would fail. They were like, “Who will come online and buy shoes and clothes online!“. Eventually, they were wrong, a lot of people were coming and buying.
They came up with a new kind of distribution but the marketing was very traditional. When they started Jabong, they started with a lot of TV Ads, print Ads, Hoardings, etc. They were spending like other companies spent in the 90s. That’s how they were building a brand.
After a while, they thought, there is something wrong. Manu Kumar Jain starts to compare Jabong with other companies from the west like Google, Facebook, etc., he thought, these are the companies that are built without any TV ads.
The only question was, What did they (Team Jabong) doing wrong? At that time, they were not having an answer.
Journey of Xiaomi (Mi) in India
After 2-3 years of it, Manu Kumar Jain exited Jabong and started Xiaomi (Mi) Business in India. When he was starting his Xiaomi’s business in India, most of the people said, you’re going to fail, you’ll die in 3 months, blah blah blah…
The reason was, they were thinking to sell mobile phones online, only online. Moreover, they are not doing TV ads. If you’ll look at all the smartphone brands before Xiaomi launched in India. You’ll find, they have built their brand broadly on these two things:
- Building a huge distribution network across 1000s of shops
- Doing a lot of tradition Ads including TV Ads
People were saying to Manu Kumar Jain, if you’re not doing these two things, you’re gonna fail. Today, they are the #1 brand in the online segment. They became the #3 brand for online + offline in urban India. They have had great success in the past 2 years.
A lot of people don’t know Xiaomi because they have not done traditional Ads. Still, they have built a pretty solid business foundation.
This journey made Maku Kumar Jain start thinking, what they have done differently? How can they relate it to others? What other similar companies across the world have done? How they had built their brand without advertising? All these questions were important to Manu Kumar Jain.
In the subsequent blog post, I’m going to share with you the answer to all these questions. Answers to these questions can help you in your business. Before we get started, let’s have a look at:
Top 50 Smartest Companies in the World (2015)
Manu Kumar Jain start to analyse the top 50 smartest companies, the companies were:
He then shortlisted some companies which he used to believe are B2C companies to relate to. Companies that you’ve used or heard of before like Apple, Facebook, Uber, Tesla, Snapchat, Netflix, etc. (Marked with a Red Circle in the Image).
What all these companies are doing, are these companies spending money on advertising? The answer was, No!
Let’s take the example of Facebook. Facebook has over 1.7 Billion monthly active users, which means around 1/4 of the world’s population are coming to Facebook once every month and using it. The only question is, has Facebook ever done any kind of TV ads? No!
Taking another example from the east, Alibaba. Alibaba is the biggest e-commerce company in China and the world. They have a singles’ day, on every 11th of November, they celebrate the singles’ day. Last singles’ day (2018) On November 11, 2018, Chinese consumer spending on Alibaba’s e-commerce platforms amounted to 30.8 billion U.S. dollars. They all did it without TV advertising.
The first BIG question is:
What are all these great companies doing differently?
From here, I’ll give you the answer given by ‘Manu Kuma Jain’, the number one thing they did differently is:
They have a Great Product
If you’ll look out to most of the founders, they are paranoid about one thing, which is the product. Most of the founders and CEOs of these companies are the biggest product managers who are very consciously working on the product every single day.
If these companies are divided into two axes in which one axis indicates the ‘marketing spend‘ and another indicated the ‘product innovation‘. Then we obtained this:
Companies like Google, Facebook, WeChat, Tesla, etc. ranked high on innovation and spent zero on marketing. There, there comes Apple who has a great product and also spends money on marketing. After that, companies like Flipkart (Belongs to India) has also done innovation but spends a lot more money on marketing.
On the other hand, bunch of traditional companies spends a lot of money on marketing indicated with Blue circles in the graph.
The point that Manu Kumar Jain is trying to make was that the CEOs and founders of these great companies were so paranoid, they always remain focused on the product. To name a few, you can consider the example of Facebook, Mark Zuckerberg is only involved in the product. He has hired a separate person to take care of the company.
Mark Zuckerberg says, “Let me focus on the product, and you should handle the other stuff like revenue, marketing, shares, etc. in the company. I can focus on one single thing which matters most that is the product.“
Let’s take another example, Tesla. You may or may not know about Tesla because it has launched in some countries only. Tesla is redefining the way, the world will travel. They have not just launched electric cars but they have also launched cars which have a capability of self-driving. Which means, you can sit in the car, set the destination and it will drive on its own. You don’t even need to park the car, it’ll go and park itself.
This is something which we thought that it is possible only in Sci-Fi movies. I used to the thought that it’ll only happen after decades in the future. It’s beginning to happen now. The person who is involved in this daily is the CEO and Founder of the company himself ‘Elon Musk’.
They had made a sale for a product (Tesla 3) of 10+ Billion Dollars (pre-order) in just 2 days which was launching the next year from the day sales are made. The interesting thing is, they have not invested a single penny on advertising.
If you also do have a great product then sooner or later you’ll skyrocket your revenue. Remember, ‘great product‘. But Time is also a factor to consider, which I’ll address in some other blog post. Let’s jump to the second thing that made these companies to a level where these companies are today.
What these companies are doing? How they are building their products? The answer is innovation! These companies try to do something different.
Let’s take an example of Flipkart, the biggest startup in India. The innovative product/Service of Flipkart is ‘Cash on Delivery‘. I’d give a huge amount of credit to Flipkart for starting the entire e-commerce revolution in India.
Flipkart was not the first company to start e-commerce. They were the company like India Time Shopping, India Plaza, etc. which existed before Flipkart started. But, none of these companies were successful.
Flipkart started and they realized that “Consumers in India do not have a credit card or Internet banking. India is a cash economy, although time is changing. Most of the people in India so their business daily on cash. Why do force consumers to come online and use their credit card and Internet banking, even when they don’t have this facility”.
Flipkart came up with the concept of ‘Cash on Delivery’ and today about 2/3 of the e-commerce is running on the same concept. The entire e-commerce market exploded when Flipkart started this single concept of Cash on Delivery.
Moving to the next, Let’s have a look at Snapchat from west.
Snapchat was not the first social media platform out there. Before Snapchat, there were tons of social media platforms including image sharing platforms.
What happens, when I send you an image, the image stored on your mobile, PC, or laptop. You can then access the images later anytime as long as you’ll not delete it permanently. But, what if I want to send a picture that I want you just to see but it shouldn’t be stored in your phone.
This is what Snapchat owner realized that they have to develop something where we can share the pictures in a way that the user can’t store the image. This is the innovation behind Snapchat, this made Snapchat bigger than Twitter within just 4 years Snapchat launched.
Here is an amazing stat that is worth to know about Snapchat:
What you can conclude from all these are, these companies are doing and did great because they were having a great product and there was some innovation, something different from their product. They understood what consumer wants and then accordingly they came out with something which satisfies the need of the consumers.
Now, look at this image below:
This is ‘4 Ps of Marketing’. Manu Kumar Jain believes that all these 4 Ps are not important. Even if they are, 1 P is important among all which is ‘Product’. He said, ‘Product is 100 times important than any other Ps‘.
Further, he says, “If your product is fundamentally great and you’re not considering other three things, you can live with it. If your product is shitty and you’re doing great things including these three other than product, you can not succeed”.
Let’s jump to the next questions:
What other things big companies do to build their brands without traditional ads?
They build a small group of users who are social influencers. Like, the traditional way of working was, a company will have a brand campaign or TV ad. Then they’ll hire some brand ambassador, it may be any famous actor/actress or some famous personality. Then, they will do a TV ad that will reach out to the millions of people.
But, some of the companies, they don’t have any campaign and TV ad with the ambassador. They have one thing called as brand influencers. They will go and work with a small number of people who genuinely believe in their product, who love their product and become a brand evangelist.
The Brand Evangelist are the persons who go to their family, friend, circle, colleagues, etc. and talk about the product and the brand.
Today, most of the shopping or any other thing is a social need. Like, if you decide to buy a phone, might be, you’ll go to a family member or a friend and will ask them, “Which phone should I buy? My budget is 10K“. Then, these family members or friends recommend some product. The person who is recommending your product to anyone is the brand influencer.
When a brand influencer recommends a product, it’s far more trustworthy than any other method. People believe in brand influencers rather than a big start saying this because more often you know if a big star is saying that, “I’m using this phone or XYZ product“, he is not using it.
When something is said by your social circle, then the amount is trust is comparatively higher. Mi itself do it a lot. Xiaomi has fan clubs in almost every single city and these fans have helped Manu Kumar Jain to build a great brand.
Advertising is not equal to Success. First, you need to have a great product and second, you need to have a network.
Here are two more examples that support the statement, “If your product is shitty and you’re spending on advertising and other stuff, you’ll end up dying your business. Or Advertising and Print Ads are not required to build a great brand.”
First is AskMeBazaar.com, they had a website. There was nothing special about their website, nothing special with the product, nothing special about the price and service. But they spent 100s of crores (million dollars) in their TV Ads. They were having brand ambassadors Kangana Ranawat, Ranbir Kapoor, and few other big stars. And yet, this company was shut down.
No great product but amazing advertising does not work.
Another example, Patanjali, Patanjali is compared with Dabur here.
Dabur was started 100-150 years back and Patanjali started just 15 years back. Today the revenue of Patanjali is more than Dabur.
Dabur spends 25% of its revenue on Marketing and Advertising. Patanjali also spends of Marketing and advertising but almost negligible. In just 10 years, they have done what Dabur did in 50 years.
Final Words to Conclude
Traditional marketing has some of its merits but it’s called lazy marketing. Doing lazy marketing and hoping that consumers will come and buy is not a good option.
The smarter and harder way of doing something great is building great products. Brands and companies will eventually realize that consumers will understand, “When I’m watching a TV ad and I’m buying a product, I’m not only paying for my TV ad that I’m watching. But I’m also paying for 1000s of other people watching the same ad and not buying.”
It is not a good proposition for a brand and not a good proposition for a user. This is a lazy way of working. In the future, a lot more new B2C tech companies will not use it.