How 10th Graders Are Outwitting Growth Teams of India’s Largest Internet Companies!
An army of what we call digital dalals are ripping all of us — every minute
Disclaimer: This article was prepared by the author in his personal capacity. The opinions expressed in this article are the author’s own and do not necessarily reflect the views of Fynd. Fynd or the author does not hold any copyright/trademark of the logo and brand name (except Fynd) used in the story.
Indian Internet Startups
Most of Indian internet startups are less than 10 years of age. Almost all of them are trying to get the biggest pie of the customers for their products and services. I am also a part of one such startup, Fynd. At Fynd, we are an offline to online fashion platform which is helping brands connect their offline retail stores to online consumer demand. With more than 5 million users in less than 20 months of time, we, and all other internet startups try to move fast and follow a simple principle of:
“Be quick or be dead”
All of us have borrowed a lot of user acquisition and retention strategies from the west and started applying them to India. But unfortunately, digital marketing in India is a lot more complex as compared to any of these developed countries. The customer behavior is not as straight forward as defined in any of Kotler’s or Nir Eyal’s books. Moreover, customers in India are smart and are always looking for loopholes in your marketing strategies.
Customers in-fact might not be an appropriate word for many of these people who make purchases on eCommerce platforms. These are the people who are vigilant and keep a tab on a plethora of internet companies and their marketing/re-marketing activities (and offers) and start exploiting it as soon as they find any loophole. I call these people as dalals of the digital world or simply “Digital Dalals”. Sit back and learn through the below examples, Who are Digital Dalals, Why are they Dalals and how do they work.
Who is a Digital Dalal?
‘Digital Dalal’ is the new generation of a dalal who keeps a tab on almost all internet companies, their activation and re-activation strategies, and exploit the loopholes in the same. They might not be educated enough (most of them are hardly 10th pass) and are not from strong economic backgrounds, but are super active in this business and mint more money than most of the people reading this article!
The questions which might pop in your head are:
What kind of loopholes?
Is this causing any harm to me?
I think my digital marketing strategy is doing great and my programs are unaffected by any such phenomenon.
The next few examples might help you understand things better. I have been following a lot of groups on Facebook and WhatsApp where these people collaborate their efforts and share information. Here are a few examples of how they exploited the activation ideas of a few companies.
Droom — Helmet Giveaway
Droom - an online marketplace to buy/sell second hand vehicles recently did a helmet giveaway. The prime purpose of the activity was to create brand awareness and get a lot of new users to know about Droom.
What happened instead, was a lot of people bulk ordered these helmets for free and are now selling it closer to its original price.
Surprise: Many of these people don’t even own a bike!
So, did this activation actually solve the brand’s purpose? Was the brand trying to activate this segment of customers or were looking for a more sophisticated set of users and potential customers?
Future Pay — Rs. 100/- Cashback
The same thing happened with Future Pay wallet as well. When they decided to give away Rs.100 to each new account, people ended up creating multiple accounts to make more money.
What that means in the above case is, when Future Group thought they got additional 100 customers, it was actually just one!
Okay, may be mobile no. check and OTP based log-in can save me?
This definitely adds an additional layer of security to your system, but then these digital dalals have managed to loophole this authentication as well. There are a lot of OTP (One Time Password) vendors in the market who specialize in just one thing and that is providing OTPs. They have 100s of SIMs each and provide OTP for as low as Rs. 3/-.
And yes, they do maintain all these SIM cards (thanks to free life-time validity and free SIM cards provided by mobile operators). Here is a small chat with one such OTP seller.
At this point you might be thinking that one can add multiple levels of security to this as well (device fingerprint, timestamp, APK hash match, etc.), but then, at the end of the day, you also have to keep in mind that your on-boarding process doesn’t become too difficult for genuine people to join your platform. So you need to take a call, and might have to purposefully leave some loopholes so that your genuine customers are not troubled.
While the above examples were specifically related to dalals’ targeting awareness part of your customer journey, we all definitely do a lot of activities in customer retention and loyalty as well. And yes, most of them are currently being exploited by these people.
Redmi Phones — Amazon Exclusive
Redmi phones are Amazon Exclusive. Due to it’s power packed features at low cost it has a great demand in offline market as well. And where there is demand, somebody has to supply. Therefore, there are a large number of dalals who have expertise in purchasing these phones online and then supply it to the local vendors, who then sell it at a higher cost (than MRP) in the local market. As soon as the online sale starts, they try to buy out as much stock as possible and a genuine customer is not able to get the phone online. Customers therefore have no option but to pay a higher cost in offline markets to these dalals as they couldn’t buy it online.
Cross Promotion Deals Might Be a Better Idea?
A lot of companies think that cross promotion deals might be a better idea. A Flipkart will give a MakeMyTrip voucher to its customers. MakeMyTrip will think that they are getting new customers via this activity. But what they get instead is people selling these vouchers online to customers who are looking to book a ticket via MakeMyTrip. And mind you, these are not new customers, these are dalals who are selling tickets to their customers by booking it on their MMT account (thereby garnering loyalty rewards instead).
Somebody who wants to book a hotel simply goes to one of these dalals and then they help him get the best deal via one of your customer retention program.
You might have tagged their accounts as loyalist, but are they?
And in case you are thinking they are not targeting your premium customers, just have a look at the above screenshot again. The hotel customer is looking for aCountry Inn which easily costs somewhere between Rs.5000–8000 per night for the cheapest of rooms.
All this definitely makes me say:
They literally laugh at our loyalty programs!
Why ‘our’? We at Fynd have also been a victim of these people. We recently ran a campaign called Redeem Shower to incentivize our loyal customers. But then, as soon as the campaign started, Fynd accounts started getting sold on these platforms.
They have eyes on marketplace pricing errors as well
Everybody in an online marketplace is trying to understand the tools and the way pricing is done. In such a case, if a marketplace or individual seller on a marketplace wrongly prices their product or run a wrong coupon, it hardly takes minutes for these dalals to exploit it to the maximum.
Have a look at this Paytm cashback coupon error, due to which the guy got all the oil packets shown in the screenshot at effectively Re.0. Yes, ZERO!
Similarly, Fynd is not spared as well.
How much Money do they make?
According to my recent conversations with a few of them, even if someone spends 4–5 hours/day on such activities, one can easily make around Rs.500–700 per day. This counts to almost Rs.21,000 per month and that’s an average. The bigger players easily make around Rs.70–90k per month and in a good month they can make around Rs.1.5 Lakh!
Rethinking about your job? 🤔
You might call them a digital dalal, ripper, troll or use any other such term, but the truth is they have understood the digital game well and sometimes you do get to learn from their approach.
We got introduced to a lot of safety techniques just because they tried to rip us. Great learning indeed!
Special mention to Ankur Chandra, Ronak Modi and Kavish Vora who managed to fix these loopholes quickly without affecting the genuine customer’s journey.
This article introduces you to frauds happening at different levels without getting deep into the mechanics of each. If you are interested in knowing more, drop in a mail at growth[at]gofynd.com.
#HappyFynding
