Vijay Mahajan - Digital Leapfrogs: How technology is reshaping consumer markets in India

To my grandson, Kiyanfor bringing so much joy to our lives.

Contents

I wrote this book over the course of four years. It took longer than I anticipated and I encountered a number of unexpected turnsnone more profound than the coronavirus pandemic that changed life as we knew it, in March 2020. Whether here in Austin, Texas, or in small rural villages across India, Covid-19 left almost everyone in a similar situationlocked down and separated from the consistent physical interactions that provide so much meaning to our lives. Businesses and economies slowed to a snails pace, as we struggled to find ways to connect, transact and continue pursuing our passions and livelihoods. But billions of us also shared another commonality: a digital lifeline, which allowed us to continue to work, entertain ourselves and, most importantly, connect with the people we love.

The lockdown confirmed the power of digital technologies for me, and the seed of that idea eventually grew into the seven chapters that follow. Although pandemic-related health restrictions reduced physical interactions, and travel began to feel like more like a phenomenon of the nineteenth century, the heightened reliance on twenty-first century digital technologies offset some of the lost connections. We couldnt travel to meet friends and family in person, but we could interact with them any time of the day or night, via WhatsApp, FaceTime or Zoom. While we tried to stay isolated in the physical world, we made special efforts to connect in new and meaningful ways through these online platforms. I, for instance, couldnt fly to India to soak in the culture and eat home food, but I could stream all kinds of Bollywood movies, livestream my yoga classes, order groceries online from the HEB website and, thanks to Uber Eats, order foods from various ethnic restaurants that I couldnt visit in person. Even my co-authors and I regularly connected on Zoomone of them sitting just a few miles away and the other halfway around the world in India. We couldve been on different planets or right next doorthe technologies forged the connection we needed to collectively mould this manuscript.

My initial thinking on how digital technologies are transforming consumer market opportunities in developing countries began years before anyone had even heard of Covid-19. Ever since, during various trips to India while researching my four previous books on emerging markets, particularly in slums and rural areas, the innovative ways in which entrepreneurs, businesses and consumers developed and used digital technologies stood out. The clever usage of digital devices and applications had always made for great stories in previous books, as they clearly improved lives, boosted incomes and enhanced the welfare of the people who had access to them. Yet, only in recent years did it become clear to me that these technologies have become widespread enough, the infrastructure robust enough and their uses innovative enough to move beyond the sporadic or piecemeal effects Id seen in the past. They had started transforming entire economies and markets in developing countriesfrom education to communication, and from supply chains to entertainment.

The first inkling of this notion had started to coalesce in my mind in 2017. That year, I had seen the similar ways in which people used technologies during the monsoon in Mumbai and the hurricane in Houston, and Id also chanced upon the trailer of an Indian movie that depicted a newly-wed woman who was using her smartphone to tell her husband that she would move in with him only when he arranged for an indoor toilet (see Chapter 1). But the idea truly crystallized in my mind the following year, when Bill Gates carried a jar of human faeces on to the stage of the Reinvented Toilet Expo in Beijing. This event, which drew entrepreneurs, government officials and Non-Governmental Organizations (NGOs) from around the world, showcased the latest in sanitation technologies. Here was the billionaire founder of Microsoftone of the stars of the computer era as we know it todaygesturing to a jar of poop and wondering aloud about how new technologies might finally help solve one of the oldest of human problems. (Meanwhile, exhibitors at the Consumer Electronics Show in Las Vegas were showing off voice-controlled showers and smart toilets.) Thinking about this man synonymous with cutting-edge digital technologies, juxtaposed against this most stubborn challenge, I began to realize that consumers in India and other developing countries were navigating two different centuries simultaneously. I could see an India with one foot planted firmly in the digital future and the other stuck in the past. After years of casually observing the innovative ways in which consumer goods companies used digital technologies in developing countries, I now began to fully understand how this underlying blend of the old and new created a market dynamics unique to developing countries and the 86 per cent of global consumers who live, work, shop and play in them.

Digital leapfrogging, that is, taking the lack of existing infrastructure as an opportunity to adopt newer technologies, has been a reality in many emerging markets. The Covid-19 pandemic gave me more time to reflect on the influence of these digital leapfrogs and, in many ways, underscored just how significant an impact they can have. I thought back to my younger days as a chemical engineer, when computation was an integral part of my career. I began with log tables, moved on to slide rules and calculators, then to mainframes and, finally, to desktop and laptop computerswith each technological advancement reducing the burden of calculation and opening resources for more complex and creative engineering. My communications with family and friends similarly evolved. It used to take months to get responses to the handwritten letters I would send to my father. Even after landline phones came into place, I could not call Jammu because of the time difference, the cost and the hassle of going through four different operators. Now, with mobile phones and WhatsApp, I exchange jokes and reveries with my siblings every day.