The last mile is where the money is

Ninety nine percent of those receiving private remittances from overseas were aware of Western Union Money Transfer (WUMT), according to a study by the company in 2010. Sustained efforts at building category awareness, the brand, and distribution, over the last 17 years, had paid off.

But the Indian opportunity was too large, the market too heterogeneous, and the environment too dynamic, to allow hubris to set in. A fact acknowledged by the 150-year old American giant by its festive season campaign announced end-September, among other ongoing marketing efforts. Eid and Diwali are big months for India, which receives the largest amount of personal remittances – US $ 55 billion in 2010 according to a World Bank estimate.

Western Union’s million dollar multi-media campaign celebrating the spirit and sacrifices of Indians working abroad, in partnership with the Shahrukh Khan-starrer Ra.One, will target India and the Diaspora markets. The synergies are obvious. And like Ra.One, for Western Union too, the campaign is but one - albeit important - stroke on a large canvas. The brand has explored the Bollywood route in the past through sponsorship of established properties like IIFA (India International Film Academy) and Apsara Awards.

Distribution is God

Where is this high level of awareness coming from? Western Union boasts of a network of over 80,000 locations in India (across 7,000 towns and cities), and 470,000 across the world. Consumers can pick up cash from any of these locations, when money is remitted from abroad through the service.

In India, this network has been built through a model of 10 master agents (including State Bank of India, India Post, HDFC Bank and Reliance Money), who in turn appoint sub-agents. Among the sub-agents could be other banks and institutions - for example, Reliance Money has Syndicate Bank as a sub-agent. Travel agents are in the network, and so are some retail establishments.

Recruitment of sub-agents is an ongoing affair, but the process is as much through pull today thanks to the brand’s growth, explains Kiran Shetty, Regional Vice-President – India, Western Union Financial Services.

“When we started, we were going to districts and asking for locations (retail points). As the brand picked up, the demand started coming to us, which we then distributed to our agents. Right now, it’s both ways – we continue to approach the market, but we see people approaching us,” he says.

The brand has looked at distribution points available in the country and got them all together – whether it’s the banks or India Post or a retail location.

“We offer the convenience of each of these distribution points. India Post enjoys huge trust. In rural India, retail locations operate extended hours. And consumers have great affinity with banks,” says Shetty.

Western Union’s biggest asset is its distribution points outside India, in 200 countries, he explains. This complements Indian banks, which have their strength in India.

“The synergies work for the consumer, and the banks can also look at cross selling some of their products to these consumers,” he adds.

Rural Inferno

If everyone knows the brand and what it offers, what’s the role of brand building today? The two-fold answer lies in the brand’s communication efforts.

It’s understandable that 60 to 70 per cent of the brand’s marketing spends are in rural India. The spokesperson outlines that 60 per cent of WUMT’s volume comes from rural India. Besides the usual States where one would expect high remittances (by volume), Uttar Pradesh, Rajasthan, Bihar, interiors of Maharashtra and West Bengal have emerged as strong remittance markets. The top five States are Tamil Nadu, Kerala, Andhra Pradesh, Punjab and Uttar Pradesh, for WUMT.

Western Union speaks in 30 languages, and has a State-centric team and agency to drive the on-ground communication. It claims to have touched 10,000 villages identified as remittance pockets (tracking postal and courier deliveries, couriers delivered, passports issues, etc.) with grass root programs, including community leader programs. These identified pockets, and the requests coming in from prospective sub-agents, lead to avenues for retail expansion. The cycle continues. The brand claims to have covered more than a million sq. feet of walls in rural India with its messaging.

“We would continue to penetrate deeper, into areas where people wouldn’t have heard of money transfer. We gain market share by educating customers,” offers Shetty.

The pull is not just for sub-agents looking to do business – including jewellers, money lenders, pawn brokers and gold loan entities. For the un-banked segment, especially, the grass root programs have worked well, claims Shetty.

“The recipients in the villages do tell the senders that they have heard of Western Union, that they believe it’s a very safe way of getting money, that they have it next door, and they have seen in at the State Bank of India, India Post and other establishments. That’s driving growth,” he explains.

Evolving Market

At the other end of the spectrum is the more evolved set of customers. Even here, it is necessary for the brand, feel custodians, to reiterate the messaging; more so, during the peak festive months.

“It’s an evolving market. You need to constantly keep educating customers - and also keep reinforcing that we are there… that there is an option available by which you can get your money in minutes,” he adds.

In 2005, the brand’s proposition was ‘Money in minutes’. Now, it is ‘Moving money for better’. Ahead of this Diwali, a consumer promotion is under way in Kerala, Uttar Pradesh and Bihar. The integrated Diwali campaign builds on the current brand line. And when Brand Line met Shetty in early September, Western Union was tying up the loose ends of its association with Ra.One for the joint campaign.

“Normally, you would see us doing ad campaigns around Diwali. That’s one of the big gifting or ‘urgent sending’ months in the Indian context. During gifting seasons, it’s important to being our message out,” says Shetty.

The creative itself, we are informed, is rooted in celebrating the senders, often people who live abroad without their families.

Shetty surmised, “Our customers – a majority of them – are very special. They are not living with their families. They work eight to 12 hours in a day or more; six to seven days in a week. They sacrifice 10 to 15 years of their lives to build futures. In our campaign for Diwali, you will see all that coming through.”

Even as the brand touches on an emotional chord, it continues its retail expansion. The last mile is where the money is, in this category. For State Bank of India’s customers, the last mile will be their bank accounts when receiving money through Western Union, before the end of the year. But that’s another story.

Who’s Sending?

North America continues to be the largest source market for remittances into India, followed by the Middle East, through the Western Union service. The company is witnessing larger volumes from the Asia Pacific regions, informs Shetty. This includes Australia, New Zealand, Malaysia and Singapore. “In the Indian context, I would think these are emerging corridors,” he adds.