Last week, Montreal, Canada-based Aimia Inc extended their Nectar coalition loyalty brand into India with the launch of Nectar India, an e-commerce coalition programme, launched in partnership with Infosys, that provides Aimia with a (virtual) footprint in India and a chance to compete against American Express's Loyalty Partner subsidiary. India is certainly a large enough country to support multiple loyalty coalitions. But is the Indian consumer market developed enough to push another loyalty coalition to critical mass?
Coalition loyalty programmes traditionally have a classic structure, developed initially by the launch of the original UK Air Miles programme in 1988: an anchor grocery sponsor to capture everyday spend, a credit card partner to accelerate earning, one or two large anchor retailers, and perhaps a utility or telecom to increase household penetration. In developed markets such as Canada or the United Kingdom, the formula has been a runaway success. In other markets both mature and developing, however, replicating the formula has proven a challenge - which has forced coalition operators to get creative.
In the United States, for example, finding a grocery partner willing to anchor a loyalty coalition has proven to be a bridge too far - a reality which resulted in American Express launching Plenti without an anchor grocer. In India, Loyalty Partner has successfully launched Payback India with over 50 partners, including a mix of grocery retailers, which makes Payback India more of a traditional coalition. Coming in behind the market leader has forced Aimia to get creative, however - leading the company to debut its virtual coalition model in country.
And the Nectar model is creative; as Indian e-commerce publication DiGit puts it, Nectar India essential functions as a "rewarding shopping assistant," aggregating multiple online retailers to showcase their products and prices and then attaching a points-earning value to each purchase. According to DiGit, Aimia hopes to bring its analytical expertise to bear to make the Nectar India epxerience a rewarding one for its members. Money quote from Jan-Pieter Lips, President, International Coalitions, Aimia:
"We are putting loyalty at the heart of ecommerce in India and we are delighted to be launching Nectar here. Through our partnership with Infosys the Nectar site uses leading edge technology so that customers get relevant, personalised shopping information they need within seconds. We are excited to bring this useful and rewarding customer experience to consumers in India."
By crafting its Indian coalition play as an e-commerce platform, Aimia is essentially counterprogramming against the traditional bricks-and-mortar coalition model as embodied by Payback India. It's a smart play; with Indian consumers spending $20 billion annually in e-commerce, there's plenty of room to run.
Aimia's next task will be to provide a mobile platform for Nectar; India recently passed the United States to become the world's second-largest smartphone market behind China. With somewhere around 50% of India's population of Millennial age, the future of customer loyalty in India will lie not on the desktop or laptop, but on a frictionless mobile platform. We'll keep you posted on the coaliton's progress.
-Rick Ferguson
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