InvestBae: How Nippon India MF is talking to Gen Z about investing
Nippon India Mutual Fund, unlike its bigger rivals, does not have a sprawling bank network that keeps reminding customers of its brand identity. But Nippon India invests in ‘passive advertising’, says chief marketing officer Kaiyomurz Daver.
Mumbai: From opening your first fixed deposit to starting your first SIP (systematic investment plan), the idea of investing has changed dramatically in India in the last decade or so. So has the fate of Nippon India Mutual Fund, the fourth largest in India, managing assets worth over ₹6.54 trillion for more than 20 million investors. But building brand recall in a highly regulated industry dominated by bigger financial firms is no easy task. Kaiyomurz Daver, Nippon’s chief marketing officer, says the trick is to become part of an investor’s daily life. Edited excerpts:
Consumer brands are really pushing boundaries on how they communicate. How do you go about brand-building in such a regulated market?
We have a tough challenge of building a brand. As the fourth largest, we compete with bank-sponsored mutual fund brands that have decades of customer familiarity and visibility behind them. As a child, you may have visited their branches; your first salary account may have been with them. You see their ATMs, you may have taken their life insurance—you’ve grown up being exposed to those brands in multiple ways. But we are a standalone non-bank sponsored mutual fund house. How do we compete with that level of recall and presence? As a strategy, we have focused on something we call passive advertising.
So what does that involve?
We have done laptop branding on news networks like Times (Group channels) and Republic. I am in a metro, with a branded Worli Naka station on Mumbai’s Aqua Line. I also have to find inroads into your daily life. People only buy from people they like. If they like your brand and have an affinity to it, they will come and buy.
What is the interest in branding a metro station? Many of your peers in the BFSI (banking, financial services and insurance) sector also seem to favour this marketing channel.
I have to compete with the larger ones and do all kinds of passive advertising because I need to be seen. If I have 200 branches, I compete with 20,000 touchpoints of my competitor. Actively, I can make campaigns, but those are done in bursts. That is not going to build long-term salience and trust for the brand.
So, my objective, being on laptops or in the metro—I need to be seen when you watch the news or commute. Right now, in my brand journey, I believe passive advertising takes precedence in my thinking.
We thought of the largest metro line in the city, cutting through the business districts and affluent markets, going right up to Dharavi, which made it attractive. We went out and sourced the opportunity. There were some calculations into deciding on the Worli Naka station. The purpose was to try and be omnipresent.
How do you appeal to impatient investors, those who began investing in the post-covid bull run?
Look at the stockbroking industry. After all the efforts at the industry level, we are at about 6 crore (60 million) investors. Broking is about 10-12 crore. Broking is a product for HNIs (high-net-worth individuals) and ultra-HNIs, who have a huge amount of money. This is not a vehicle for wealth creation. To get wealthy, it is a slow and steady process.
As an AMC (asset management company), we realized that we have got a lot of investors who have come in post-2020 and are seeing stagnation in the last 1-1.5 years. We upped our direct communication to them. We started showing them empirical evidence of long-term investing, and what happens when you stay [invested] through volatility.
How do you communicate better when retail investors are caught up in the excitement of IPOs (initial public offerings) and cashing in on listing gains?
As a fund house, in the last two years, we have done the least number of new fund offers (NFOs). We believe that if you are in a well-diversified fund across market caps, you are well taken care of. Unless there is a really niche segment and a very good proposition, we don’t launch NFOs. We have launched no new active funds, for example, and only launched a few passive funds. We don’t market it much, it is there for a set of users who know about the category and invest in it.
What about Gen Z and younger audiences? How do you manage that in an industry that tends to be conservative in its communication?
We are the only AMC that has a dedicated social media property for Gen Z. We have an Instagram account called InvestBae—Invest Before Anyone Else. Some of my toughest meetings are when I discuss marketing plans with my team for Gen Z. Once or twice, I have to stop and search for the term they are pitching to me—such as “What is Bae?" [laughs]. Then I found out Bae stands for Before Anyone Else, and then I was sold on the idea of ‘InvestBae.’ It is so interesting, and I keep learning.
So we catch Gen Z customers young, and we are talking to them in their language. Our research shows that they want to spend on experiences, too, such as concerts. We tell them that you do that, but think about investing too.
Have these strategies been effective though, for you and the industry? A lot of the noise in investing continues to be around stocks, IPOs, derivatives and other flashier instruments.
In spite of being a non-bank, we are the fastest-growing mutual fund house in the country. Outside of EPFO (Employee Provident Fund Organisation) investments, we have the largest user base of retail investors in the country.
The mutual funds industry is relatively young. LIC (Life Insurance Corporation of India) has been around for 100 years. The banking system is 300-400 years old. People have built that trust. The first (mutual fund) scheme came in 1964. Then there were troubles in the middle. So really, the industry started with the privatization in 1991-92, about 30-35 years (ago). It takes time to build trust.
For instance, my parents told me to open a recurring deposit account. Now the parent will tell their child to open an SIP account. So that generation change is happening and now our parents can also see that there is money to be made in mutual funds.
The markets have been flat over the year. But the industry SIP book is at ₹29,000 crore every month. Even six months ago, it was ₹25,000-26,000 crore. And nothing has happened in the past one year, the markets have been largely flat. When we started AMFI’s (Association of Mutual Funds in India) ‘Mutual Funds Sahi Hai,’ the industry SIP book was probably ₹3,000-4,000 crore. People have now seen evidence that if you stay through cycles, through volatile times, you do create wealth.
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