MUMBAI: The year 2017 was when brands were unwillingly thrown into a roller-coaster ride only to emerge dizzy and faint. The highs weren’t enough to ride out the lows.

2017 will be seen as a year of turmoil for brands. Just when the effects of last year's demonetisation were ebbing away, the government threw another spanner in the works in the form of the goods and services tax (GST).

Much before its implementation, marketers and consumers cheered on the GST to be a saviour for the industry, touted to solve multiple tax complications. But its launch timing, months after demonetisation, crippled the Indian economy even further primarily due to faulty implementation.

The year began with the economy regaining its composure after the ban on bills of Rs 500 and Rs 1000, which led to troubled times for businesses across the country, especially in the cash-dependent sectors. No one was spared from the effects, be it kirana stores, big FMCG players or media and advertising agencies. As physical money became dear, online payment apps were the saving grace. Paytm, Mobikwik, Zappr and the likes became a must-have app for a majority of Indians and their profits grew four fold by March 2017. 

In the months after GST was passed, sales crashed, margins dropped and marketers became extra cautious before investing in new products and advertisements. Brands steered away from marketing and advertising post August, which otherwise is considered as the ideal period for creating new campaigns as the festive season in India commences from September and goes up all the way till the new year.  

The crashing economy brought down infrastructure, including real estate, to its knees and crushed consumer demand with the implementation of the new Real Estate Regulation and Development Act (RERA) in May. Slow implementation of the new real estate regulation across the country as well as uncertainty over the impact of GST on home prices pulled down consumer sentiment this year. According to a report by the Centre for Monitoring Indian Economy (CMIE), home loan growth in April-October fell by 32.7 per cent from a year ago, one of the biggest declines in the last five years.

It was not only the FMCG and real estate sectors that had a nightmarish 2017. The USD35 billion liquor industry was subjected to one of the worst hangovers not only because of GST but also because of a Supreme Court ban on all alcohol sales within 500 meters of highways across India from 1 April 2017. Although the ban was implemented to curb drunken driving on highways, it dried up the hospitality industry, state government and liquor companies who ended up losing Rs 50,000 - Rs 70,000 crore. The market fell nearly 30 per cent in the immediate quarter after the highway ban and at least 1,500 retail outlets closed down.

After all the bad news, 2017 also saw some strong revenue figures and new entrants in the market. Patanjali recently became India’s most trusted FMCG brand as per The Brand Trust Report India Study 2017. Valued at over Rs 30 billion, Patanjali estimated its annual turnover of the year 2016-17 to be Rs 10,216 crore. In November this year, the company also signed a memorandum of understanding (MoU) of Rs 10,000 crore with the Government of India at the World Food India 2017. To buck up against the Baba Ramdev-led ayurvedic company, top FMCG players went the whole nine yards in their bids to recapture the markets they lost. While Hindustan Unilever Limited (HUL) launched its version of ayurvedic products under brand Ayush, homegrown FMCG major Dabur is in the process of modernising its ayurveda portfolio and introducing new products. The multimillion-dollar company also launched a traditional ayurvedic product Dashmularishta and menstrual pain relief tonic Ashokarishta. 

Lever Ayush, in its first campaign, took a potshot at Patanjali by pointing out the naive ways in which we categorise ayurvedic products like skincare creams, soaps and toothpaste. It went on to say that not every product with green packaging or leaves on the cover essentially fit ayurvedic ingredients. The company has managed to create its dominance in the southern market by aggressive marketing and advertising. 

According to a Nielsen Report, herbal segment in India accounts for 41 per cent of the Rs 45,000 crore personal care market. Hence, sectoral leader HUL has come out all guns blazing in a field so far ruled by Patanjali, while Colgate-Palmolive has placed its own natural products to take back its market in the toothpaste segment and Dabur India now has a major share in the honey segment as opposed to Patanjali. 

Television remained the strongest sector for advertisers this year despite depressed economic conditions while digital continued to ride on a high growth trajectory. Advancement in infrastructure, evolving audience measurement technology leading to better content and lowering data costs induced viewers to greater digital consumption. Television advertising is expected to grow at over 10.3 per cent with free to air channels gaining significance, localised content and high-definition experience boosting regional channels’ viewership and sporting leagues outside of cricket becoming increasingly popular.

Print media continued to witness a slowdown in 2017 where while English newspapers remained under pressure, regional language papers demonstrated strong growth.

The out of home (OOH) industry registered a slowdown in growth rate at seven per cent majorly due to adverse impact of demonetisation and GST but is projected to grow at a CAGR of 11.8 per cent primarily driven by development of regional airports, privatisation of railway stations, growth in smart cities, setting up of business and industrial centres, and growing focus on digital OOH.

The year also saw a rise in influencer marketing and brands sent out messaging by using ‘internet celebrities’ to put in a good word for the product on social media. According to Business Insider Affiliate Marketing Report, approximately 15 per cent of the digital media industry’s revenue is achieved through affiliate (influencer) marketing. A recent report suggested that 40 per cent consumers are sold on a product or idea if an influencer they followed were to recommend it. 

The turmoil in the Indian telecom industry can be attributed to several things. Smartphone penetration in the country increased this year by three folds and today India has over 300 million smartphone users which is projected to grow by more than 50 per cent in the next few years. According to Counterpoint research, 300 million people out of 650 million phone users own a smartphone, making India a big market for brands and telcos. Indian tycoon Mukesh Ambani sparked a price war in 2016 with the launch of Reliance Jio with other telecom giants scattering to acquire market share. Vodafone and Airtel lured customers with data at cheap prices and unlimited calls. But Reliance Jio clearly won that war. Within the first month of commercial operations, Jio announced that it had acquired 16 million subscribers. This was the fastest ramp-up by any mobile network operator anywhere in the world. Jio crossed the 50 million subscriber mark in 83 days since its launch subsequently crossing 100 million subscribers on 22 February 2017. By October 2017 it had about 130 million subscribers. 

On 21 July 2017, Jio introduced its first affordable 4G feature phone, powered by KaiOS, named as JioPhone. The price announced for it was Rs 0 with a security deposit of Rs 1500 which could be withdrawn back by the user by returning the JioPhone only after 3 years. This phone was released for beta users on 15 August 2017 and pre-booking for regular users started on 24 August 2017. 

In order to strengthen its presence in the ongoing battle of the telecom sector, Sunil Bharti Mittal-led Bharti Airtel launched Android powered 4G smartphones in partnership with Indian mobile company, Karbonn Mobiles. Airtel will partner with multiple mobile handset manufacturers to create an 'open ecosystem' of affordable 4G smartphones and bring them to market for virtually the price of a feature phone. It is also in talks with Intex mobiles for similar offerings. Domestic handset maker Micromax and Vodafone came together to offer a smartphone, effectively at a price of Rs 999 if the buyer retains the device for three years.

With data becoming much cheaper this year and mobile manufacturers selling handsets at throwaway prices, mobile handsets became much affordable and smartphone penetration increased three folds. A lot of this has to be credited to Chinese players who took the Indian smartphone market by storm. While Vivo and Oppo were aggressive in marketing their products, both invested heavily in OOH advertising in 2017. We saw a lot of hoardings and static banners with Deepika Padukone (Oppo), Ranveer Singh (Vivo) and Virat Kohli (Gionee) promoting their respective brands (as brand ambassadors). While Vivo came on board as the title sponsor for India’s premier cricketing league IPL, rival Oppo became team India’s official jersey sponsor for all its matches for five years. 

According to various reports, today Chinese brands such as Lenovo, Oppo, Vivo, Gionee and Xiaomi have captured over 50 per cent share of India’s smartphone market even as Apple and Samsung fought a tough battle to hold on to their reigns.

Amidst all this, the biggest highlight of the year in the space was the launch of Apple 8 and Apple X. The company launched its flagship phones in much fanfare in September this year on its 10th anniversary.

Still recouping from the setbacks of 2017, marketers are pinning hopes on 2018 that improved market sentiment will bring them back to a steady growth path. The prospects of good economic growth, coupled with a revival in demand and consumption, will help them overcome the hit they took in volumes and profits in 2017.