Hinterlands have long-term growth prospects: Manasi Narasimhan, Mastercard
The VP, Marketing and Communications (South Asia), talks about the company's growth strategy, its focus areas, impact of demonetisation on consumer behaviour and much more
Earlier this year, Mastercard launched its latest campaign ‘Khul gayi life’ featuring actor Irrfan Khan to promote digital payment among consumers and merchants who use cash. The campaign was executed under the leadership of Manasi Narasimhan, Vice-President, Marketing & Communications (South Asia), who joined the company last November.
The marketing head, in an email interview with exchange4media, talks about Mastercard’s growth strategy, its focus areas, impact of demonetisation on consumer behaviour and how is the company trying to change it:
What are the tailwinds favouring the growth of Mastercard in India?
India’s share of the global Mastercard business is consistently growing and we see that continuing in the future with our efforts and partnership with the Indian government towards championing a less-cash economy. India is leading the world in the evolution of digital payment systems. Enablers such as Jan-Dhan, Aadhaar, mobile penetration and more recently demonetization have created favourable conditions for large-scale adoption of digital payment systems in India.
With over 90% of transactions being done in cash, the Indian economy has traditionally been cash-dependent. This shows that the market here is still highly untapped, especially tier 2 and tier 3 cities. There is massive potential for the growth of digital payment systems in India.
The country is already headed in the right direction, as demonetization and government incentives for adopting digital payment have enabled an all-time high awareness about such systems. Incentives such as zero Merchant Discount Rate for digital transactions below Rs 2,000 are giving a major thrust and impetus. Mastercard has been an advocate of ‘a world beyond cash’ for many years and we see great potential in this market.
Where do you see the maximum business growth coming from in the next few years?
With the advent of BharatQR, a large debit card base and emerging mobile payment options that are low-cost and secure, we can drive the next wave of growth in tier 2 and tier 3 cities. According to a December 2017 report by the Centre for Digital Financial Inclusion (CDFI), 63% of the Indian grocery store owners, especially in tier II and III markets and semi-urban areas, want to go cashless. Helping them come on-board will encourage more consumers use digital payment systems.
While on one hand we see long-term growth coming from hinterlands, on the other, we also see a lot of business coming from the affluent segment.
Transit is another area that would witness immense growth in the coming years. Mastercard has partnered with six leading transit metros and is powering the fastest payment infrastructure for Indian commuters for tolls, metros and buses.
Has demonetization changed consumer behaviour?
Demonetisation has proven to be a major game changer for the Indian economy. It opened the gates for consumers to realize the potential of digital payments. Once they experience the convenience, safety and security of digital payments, they want to become part of the journey to create a ‘world-beyond-cash’.
Where does India stand when it comes to embracing digital payments?
There is a noticeable growth in the number of Indian consumers transacting digitally to spend on discretionary items. According to RBI data, the number of point of sale (POS) machines increased to 3.1 million in March 2018, up 71% from 1.77 million in December 2016. Post demonetization, a large number of people from unorganised sectors have started using digital payment options because of its convenience. This marks a significant progress. India’s journey towards a cashless economy will pick further pace in the coming years.
How is Mastercard helping change consumer behaviour?
We believe that for a sustainable shift in consumer behaviour from cash to digital payments, all parties involved -- consumers, merchants and banks-- need to be educated and incentivized. Mastercard has always been at the forefront of developing a less-cash economy and has launched several merchant and consumer awareness programmes to drive the same.
Our #KhulGayiLife campaign featuring Irrfan Khan was aimed to educate consumers and merchants in tier-II and III cities about digital payments and eliminate prevalent fears around it.
We also successfully organised the ‘Digital Rath’ campaign in partnership with the Confederation of All India Traders (CAIT) in cities such as Delhi, Lucknow, Kanpur, Kolkata, Bhopal, Pune and Navi Mumbai to build awareness and drive prevalence and acceptance of digital payments among approximately 10 lakh merchants. As part of the campaign, Mastercard conducted 'Master Your Card' training workshops for merchants in the participating cities.
With CAIT, we also launched a WhatsApp-based educational campaign in Bhopal and Nagpur for all merchants under the CAIT network in these cities. The campaign portrays the benefits of digital payment in day-to-day situations and burst the most common myths around it. It has received a very positive response and we see this going pan-India.
How are you leveraging traditional and digital media to do this? How much of your revenue do you spend on marketing initiatives?
Mastercard uses an integrated approach that leverages digital as well as non-digital platforms to deliver one consistent message. This is done using a combination of content themes and formats, each best suited for a respective platform. We use mass media options such as TV and print to drive last-mile activations. We use Twitter to build thought leadership around our brand and Facebook to engage consumers. We are constantly looking at other ways to reach out and engage with our consumers around their moments of truth as they consider a purchase.
The allocation of marketing budgets depends on the marketing objectives we set out for Mastercard. We follow a two-pronged approach, one focused on brand building and the other on building the business. The media trends also play a crucial role in this. We utilize extensive data to map the consumer behaviour. We invest in understanding new media vehicles like mobile, etc.
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