NEW YORK – Marketing Capital Company, a direct marketing consultancy firm, opened a second office in India this spring in order to target the nation’s 2.5 million credit card holders with DM inserts.
So far the company’s new enterprise, which operates out of Bombay as Regency Direct Mail (India) Private Ltd. (RDMIPL), has signed up two banks and two US mail order companies, which Mehul Desai, the company’s director, wouldn’t identify.
RDMIPL has completed two tests for the banks. An
insert advertising health products was mailed out in 25,000 credit card statements in the first test; a second plugging videos went to 28,000 card holders.
Purchasers were given the option to return goods for a full refund within 30 days.
“Sending the inserts together with a credit card statement guarantees they will be opened and that the individual has a good credit record,” Desai said.
Response rates ranged between 2.5 and 3 percent, which Desai said was very good. She is currently negotiating with four other banks to conduct similar mailings.
“We are also forming joint ventures with American and international companies who are interested in launching full-fledged sales campaigns in India,” she added.
Mail order is catching on in India, and is becoming more and more popular with the growing middle class, which she put at 250 million. (That’s more than double the generally accepted figure.)
“Middle class people have less and less time to go to the malls and shop. We’ve had a very favorable reaction to direct marketing which Indians take seriously.
“We’ve had examples of customers sending their chauffeurs to pick up their goods. Others have had their goods delivered by courier at their own expense.”
High import duties are a major problem for India’s mail order market and have led many companies to manufacture products locally in order to avoid the crippling taxes. (Only periodicals and books bought via mail order are exempt from these taxes).
The postal system is cheap but slow and prone to strikes. There are also several local private postal services which are inexpensive to use.
“Fedex in India is much cheaper than it is in other developing countries,” Desai noted.
The telecommunications industry is opening up, with the more widespread availability of modern equipment. Phone penetration countrywide is miniscule but much higher in cities like Delhi and Bombay.
Steady improvement in telecom and banking services are expected to boost credit card spending significantly.
It now accounts for about $1.5 billion in annual sales with about 100,000 vendors nationwide accepting various credit cards. Their number, too, is expected to rise rapidly in coming years.
Desai noted that catalog and other direct marketing sales are still in their infancy but said that their growing popularity provides direct marketers worldwide with “a tremendous opportunity.”
Marketing Capital Company also has another division in India, Marketing Capital Company India, which was opened at the end of last year.
Offering direct marketing consultancy, the company serves larger firms, including India’s hotel industry.
