They’re big. They’re scary. They’re different. Emerging markets are the fastest growing markets in the world, yet in most cases, they are geographically smaller than developed markets such as the United States. All of these elements make them particularly intimidating to app developers around the world—understandably so. If you’re thinking about replicating your U.S.-focused mobile strategy in India or China, think again. There is a lot to know and understand about these markets before diving in. But, if you put the time and effort into learning and preparing before venturing into them, the rewards could be huge.
Why are emerging markets a challenge?
From a logistical standpoint, the varying language, cultural, and geographical nuances of each market make them challenging to anyone used to doing business in developed markets.
Language. There are countless languages and dialects spoken, and although English is spoken by business communities, it’s rarely the language of choice.
Culture. Each country has its own cultural nuances. For instance, the handing out of business cards using two hands at the beginning of each meeting in Indonesia is a must, whether you’re meeting a client or a prospect. Here in the U.S., however, business cards are not used nearly as often. Preferred methods of business communication vary as well. Email is the primary tool for business communication in the U.S., but in Indonesia and China, WhatsApp or Path and WeChat or QQ are the platforms of choice.
Geography. Not only are these countries separated by country lines, but they are also separated by time zones, which frequently cause inconveniences and delays in doing business. 2:00 or 3:00 a.m. calls should be expected from time to time.
The challenges can be double for app developers, who not only have to understand the nuances of the country in general, but also the nuances of smartphone users who live there.
Credit card penetration. India’s low 1.7% credit card penetration makes monetization challenging for a developer used to the 71% credit card penetration rate in the U.S. This may require localization of an app to include more readily-used payment methods like cash on delivery.
Mobile costs. Mobile connections in some of these countries are unreliable and costly. 500 MB of data costs an average of 17 hours of minimum wage work in India. That same 500 MB in Brazil costs an average of 13 hours of work and a whopping 42 hours in Mexico! In comparison, our data plans in the U.S. are often unlimited or relatively cheap—we rarely think twice about how much data we’re using.
Logistics. For eCommerce apps in particular, shipping logistics are a major hurdle. The individual communities in markets like India, particularly in rural areas, are geographically fragmented. Indonesia has the biggest eCommerce challenge of all, 256m people living on 1,000+ different islands. Imagine the shipping delays they face. Unlike a lot of eCommerce players in other markets, some of the big brands operating in Indonesia, like Zalora and Blibli, have created their own shipping divisions to combat that exact problem.
Are emerging markets worth the time and effort?
Emerging markets are worth it simply because developed markets may no longer be. The U.S. and Australia have become extremely saturated and are increasingly expensive to operate in. Yet, countries like China and India are filled with financial opportunity. Both countries are within the top 20 by GDP growth and a Forbes article published a few months ago indicated that China’s economy will be larger than the U.S.’s by 2018.
Countries like China are also getting online at a rapid pace. China and India have the largest populations in the world, nearly 1.4b and 1.3b respectively. What’s most interesting about those numbers is that this means that these countries have the largest middle classes and the largest population of young people in the world, young people that are getting their first smartphones, are open to trying new things, and are itching to stay connected. These new connections also have government support. When India’s Prime Minister, Narendra Modi, was elected, he promised that every Indian would have a smartphone by 2020. Go Modi! Because of the fast adoption of smartphones—every second, three more Indians experience the internet for the first time—there are real advantages for those companies that move first in India.
Best practices for app developers
If you’re an app developer and you’re interested in capturing the attention of a smartphone user in these markets, there are a few things you should keep in mind.
Understand what users want and need. This is a best practice for any app developer in any country, but it’s particularly important when you’re marketing your app to users you may not fully understand. Consider hiring an in-market consultant that understands the mobile landscape, the potential government requirements, and has a solid network of relevant contacts. Many of my clients and prospects, both big and small, have offices in these markets. That’s no coincidence.
Believe in your ‘why.’ It’s not enough to just pick a market to venture into. You should have a good reason as to why. Does the decision fit your strategy? Your vision? Your mission statement? Be honest with yourself, because the last thing you want to do is to compromise your vision as a company.
Test, test, and test again. The beauty of testing in these markets is that you don’t have to break the bank to glean a few valuable lessons, since CPI costs are the lowest they will ever be. There is no cookie cutter approach in performance advertising. Test several channels to find out what works and what doesn’t. Play around with different creative and targeting options, and make sure you have an attribution or tracking system in place.
Exercise patience. Developers who invest now and take time to understand the markets will eventually reap huge dividends. Focus on building an awesome, localized app that users will love and be patient when testing. User engagement is the new user acquisition and that applies in emerging markets just as much as it does elsewhere. Monetization won’t be as high as in the markets you are used to, but the lifetime value of these users is only going to increase.
If you spend the time to understand these markets and their users, are willing to test different things out, and don’t expect overnight success, you will find success in emerging markets. I promise you that you’ll thank me soon enough. If you want to capture users’ attention in these markets, we can help. Contact us today to learn more.