As more and more companies rely on customer research to sell their products, the market research industry is regaining its significance. David Richardson, Managing Director, Ipsos Asia Pacific and Mick Gordon, Managing Director, Synovate tell Meghna Sharma that the merger between the two companies has only given them a distinctive edge in the area of research in India
Q] How do you plan to integrate the strengths of Synovate with Ipsos? How easy or difficult will the process be?
David Richardson: First, we’d like to tell you why Ipsos would buy a company like Synovate. Ipsos is a pure research company and we have only one business line – custom research. We want to expand and grow business in that area. We don’t want to go into promotion to go into the shoppers’ space.
But to do a good job in today’s world, we need to be global, we need to scale up, and invest in following what our clients want us to do. We need to be more present in Asia and India. Synovate is involved in many areas that we are targeting, as our clients want us to grow in those areas. The strengths that Synovate has complement us in the area of research. We are fortunate because Synovate was owned by a mediaholding company and they wanted to focus on their core business, which is not market research. At the same time, we want to expand in market research. So, it was a perfect situation where the two companies are pursuing their core strategies. It was a very easy merger because it was not a hostile takeover. Since people from Synovate are researchers, they are happy to be part of a research company. And we are happy to welcome them.
There have been a lot of mergers in the last decade but some of them have not gone well because of some or the other problem. But that has not been the case with us, because both parties want to join. Across 14 countries in the Asia- Pacific, we do not face any difficulties. In fact, one of the founders of Synovate in the Asia-Pacific said that he’s happy to become a research company and Ipsos is saving them.
Q] How will the integration of Synovate services help you?
David: Some of the things that Synovate brings to Ipsos make us stronger. In India, Synovate is established and has a strong presence. It is well-known for product testing, qualitative research, healthcare research and automotive research. These are the businesses we don’t have. We only have two clients in India which actually overlap out of 30 clients. But even for these two clients, we do something completely different. Another way we benefit is that Synovate has stakes in some businesses where they are very aggressive in terms of developing cuttingedge applications. One of the areas where Synovate has developed globally is on streamlining the processing systems. This is fundamental to a research company, which is all about gathering data, data processing and providing analysis to clients. Since Synovate has invested a lot in creating a platform which is able to provide global data-processing in a very fast and friendly way, we get a boost in terms of speed and the technicalities we bring to the market.
Q] How has research evolved over the years?
David: The industry has changed a lot. Globalization has been a really important part of it. Markets used to be separate and you would earlier have a small research company specializing in a certain area only, for example focus only 33 on Calcutta or on any country in Asia. But that’s not what a client needs today; they need to understand the consumer across the world. And the questions they ask are now very specific and sophisticated.
Q] What, according to you, are the key differentiators of the research industry in India as compared to other markets?
Mick: The global economy is right now on soft territory. The Western world isn’t doing well and everyone knows that MNCs need to develop their businesses in other countries. If you look at the countries of the world that are growing, India is one of the most important of them all. So, we would certainly expect that companies overall will focus more on India. Even Ipsos is focusing more on India… even before the acquisition in fact, Ipsos had identified India as a priority country. We have been aggressively hiring the best talent here and while combining the two companies, we have grown from 300 to 500 employees in the last 10 months. We are now the third largest research company in India.
All companies demand that their research becomes more actionable, that data quality is more reliable and that they work with experienced people whose recommendations won’t be questionable. Those are the big changes happening in India. Clients have now recognized that there has been under-investment in India for the last 10 years. We are now investing aggressively in India as we need to raise the bar.
Q] How big is the market research business in India and globally?
Mick: Its importance is going to grow significantly. A large part of the world does not see much growth in terms of industry. But in India, there is substantial growth in the research industry; it’s certainly double digit growth. Industry is growing here because the market is growing, so there is renewed interest among global brands wanting to do business in India. As other markets decline, there is a huge opportunity to grow here and it will be there for some time. It has a long way to go, but it is growing fast and has good reasons to grow further both in terms of local market and relative position in the global situation.
Q] What are the opportunities and challenges for market research agencies in India and globally?
Mick: India has an established research industry and is the oldest in Asia. India, Japan and Australia started around the same time, and very quickly India became a leader. However, in about 15 years or so, too many people from India left the country and went abroad for better opportunities. This started creating problems for the industry here. At the same time, markets didn’t keep up with the investments, and fees charged, so it became less and less important to look at market research as a serious career option. Now, it seems to be changing. I see clients recognizing the value that research provides. They want more insights and are ready to pay a higher price for detailed information. This in turn makes the industry more attractive for new people to join. So, it’s in a very nice stage right now. This is the second time that the research industry is developing and booming in India.
Q] As the boundaries of cities and villages blur, do you think a single survey works for urban and rural consumers?
David: It’s always different. The reality is that, when you do research in India, you have to do it according to the group of people you are going to address. There is a huge business opportunity in talking to the rural community, rather than just focus on Tier-I cities. There is a lot of demand in Tier-II and Tier-III cities as well. Three quarters of India’s wealth remains outside the cities. The population is massive out there, so the wealth is more distributed and hidden. This poses a big challenge for businesses. Research has to find out what people want here. That’s another reason for Synovate and Ipsos to come together because it gives us the scale, the buying strength to create the technical tools to carry out research. We have a pan-India network and we rely on interviewing the traditional way – face to face. However, there are sources to gather information as well – Internet, telephone, etc– from other parts of India.
Q] Will social media replace surveys as a research tool? Will the importance of surveys decline in another decade with the rise of social media?
David: We have got a very young population and it is actually getting younger, so there is very high takeup and very quick adoption of technology. It is easily available in handsets and the penetration of mobile phones is already large in India. There is a phenomenal wealth of information being delivered to millions of people in India on their handsets. That is a challenge that we have to understand and address. We have the technological ability to do it. Even clients have to understand how to utilize this. One of the major plan investments in Ipsos is not as big as Synovate’s in these areas. The whole market search industry has been challenged by this change. So, all research companies are waking up to it. We – Ipsos and Synovate – globally need to focus on developing our tools to not just leverage social media, but also address business opportunities created by the social media. We are focused on investing in the technology space as we see that as our future home. It’s also where our future competitors will come from.