India’s market dynamics are impacting digital business implementation: study

By 2017, 80 percent of consumer-facing companies will fail to realize ROI on investments in digital technologies due to country’s market dynamics and economic environment, according to Gartner study

  • Updated On Feb 10, 2016 at 11:51 AM IST
Bangalore: Digital business’ potential is highly dependent on the return on investment (ROI) and any failures in digital technologies used for customer experience will raise doubt among buyers and decision makers in India finds a new study.

Widespread failures in realizing ROI in digital technologies for customer experience could create a sense of distrust among buyers and decision makers in India about the potential for digital business, according to Gartner.

Gartner predicts that by 2017, 80 percent of consumer-facing companies will fail to realize ROI on investments in digital technologies focusing on customer experience because of the country’s market dynamics and economic environment.

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“India's consumer market, and economic dynamics, is completely different from the consumer dynamics observed in western markets,” said Arup Roy, Research Director - Gartner.

Unlike the consumer-facing companies in mature western markets that are driven by value-drivers for superior customer experience and product/service design, according to Roy, companies in India and other emerging markets as companies are driven by lower cost of product/service.

“Consumer-facing companies in India and other emerging markets, are driven by value drivers such as lower cost of product/service, being able to handle the problem of volumes, and being able to effectively reach the masses,” said Roy.

Companies that intend to implement complex customer experience technologies in India, such as beacons, in-building navigation, facial recognition-driven marketing and promotions will not yield the expected ROI because customers' basic needs, such as affordability, availability and ease of access, need to be fulfilled before they are able to appreciate the value of these technology-led experiences.

“Unfortunately, a significant proportion of consumer-facing companies are swayed by the shiny and successful examples of ‘customer experience’ initiatives of their western counterparts,” said Anshul Gupta, Research Director - Gartner.

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“They are making investments in front-end, customer-facing activities that leverage digital technologies and failing to invest in the back end necessities, such as enabling easier and faster process workflows, easier shopping and service experience and after sales,” added Gupta.

Gartner advises companies to leverage digital business to reinvent their business model so that it addresses the key issues affecting the Indian consumer industry - problems of plenty (volumes), cost sensitivity and the diversity and reach of consumers.

(Getty Images)
  • Published On Feb 10, 2016 at 11:48 AM IST
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