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New Amazon Ads research explains why brand building is critical for digital-first brands in India
October 09, 2024 | By Shaunakraj Deshpande, Marketing Manager
In the ever-evolving and highly competitive Indian selling landscape, brands seek innovative ways to stand out and forge deeper connections with consumers. The sustained expansion of the Indian economy, growing at three times the pace of the EU and US1 , coupled with a surge in discretionary spending2 , has created immense opportunities for new consumer categories and brands to emerge and thrive.
A catalyst of this phenomenon has been the exponential growth of digital adoption across India. This has enabled a new class of agile, cost-effective digital-first brands (DFBs) to quickly reach and engage with consumers, leveraging online channels as a powerful launchpad. However, as these DFBs strive to sustain their growth trajectories and transition into mainstream brands, a critical element comes into sharp focus: the imperative of strategic brand building.
Defining and engaging: The two-stage approach to brand building for DFBs in India
According to new research from Amazon Ads India, brand building is essential for DFBs seeking to solidify their presence and cement long-lasting relationships with their audience. While the initial success of DFBs may have been driven by their ability to quickly capitalize on evolving consumer trends and preferences through digital platforms, the next phase of their growth requires a more holistic and strategic approach to brand development.
There are two key stages to effective brand building for DFBs in India:
- Define: DFBs need to define their reason to exist (brand purpose) and what customers hear about them (brand story). It is critical to establish the brand's purpose early on and stay true to it, while adapting with the evolution of the brand and customers' needs.
- Engage: The second stage is built on consistency of experience and communication. DFBs can choose between two distinct approaches when it comes to engage– “brand builds sales” or “sales build brand.”
The “brand builds sales” approach: Leveraging brand building to drive long-term success
Some DFBs in India opt for the “brand builds sales” path, using brand building to drive long-term success. In a crowded market, a strong brand can sway consumers, simply by being the most recognizable and trusted name. This can be achieved by following a balanced approach towards brand building and performance marketing early on.
For example, the jewelry brand Giva, since its inception in 2019, has focused on building its online presence and brand through digital video ads and celebrity endorsements. Later, in 2022, Giva expanded to offline stores and used out-of-home (OOH) advertising to reach regional audiences, driving significant footfall to its physical stores. The strategic choice of building an online brand first enabled Giva to expand its sales, making it an INR 200 crore company.
The “sales build brand” approach: Scaling up, then investing in brand building
In contrast, some DFBs in India have scaled up by increasing their sales rapidly first, and then investing in brand building. This strategy works well when a brand has a strong product which, when combined with performance marketing, enables it to achieve near to mid-term sales objectives. Here, winning each sales touchpoint is important to help build a brand over time.
The premium mattress brand, The Sleep Company, is an example of this approach. Established in 2019, the brand started with a parallel launch across online stores and Direct-to-Consumers (D2C), and eventually expanded to offline stores in 2022. A strong focus on performance marketing combined with sporadic brand building activities (with a focus on yielding sales), along with a concentrated effort on product differentiation, helped the brand achieve significant scale.
The four-stage approach to successful brand building
No two DFBs are the same, and neither is their path to growth. However, our study of DFBs show that at each stage, brands can connect and engage with audiences using different ad solutions and continue to scale.
- Product-market fit: In the beginning, the brand has to focus on building and iterating products to meet customer needs. At this stage, DFBs have to establish efficient online sales channels via online stores and engage in-category audiences. Sponsored Products is an efficient way to reach wide online store audiences by improving brand visibility and directly taking shoppers to the product details page.
- Sustainable niche: As DFBs scale up, they aim to build a strong connection with their loyal customer base. At this stage, they find their “hero product” and look to establish a successful niche. Using Sponsored Display, Sponsored Brands, Brand Store, and Brand Follow, DFBs are able to build a direct-to-consumer channel along with online stores by remarketing.
- Product innovator: This is when DFBs expand their addressable audience by understanding the customer needs and behavior. They ensure presence across digital sales touchpoints including display ads. Brands can reach relevant audiences with video advertising and brand ambassadors or influencers via Amazon Live.
- Mainstream brand: As DFBs become mainstream brands and category leaders, they focus on consistency and leadership across the product portfolio. Brands can make use of an omnichannel campaign. For instance, using device ads, product placements and brand integrations on miniTV, brands can build an emotional connection with online audiences. Similarly, innovative on-package ads can help connect with offline audiences. The brand can then explore global expansion as well.
By embracing the power of strategic brand building, digitally-native companies in India can build strong and sustainable competitive advantage in the consumer landscape and drive immediate sales. This can help position them for long-term growth and cement their place as leading players in their industry. Amazon Ads can act as a partner for DFBs aiming to build a brand among digital-savvy consumers.
1 IMF Report on Real GDP Growth 2024 & World Economic Outlook Database
2 https://www.bloomberg.com/news/articles/2024-02-25/india-s-household-spending-doubles-in-12-years-survey-shows