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Challenges for Commonwealth states to transform to post-COVID marketing. Case study: Sri Lanka
‘Digital Transformation is the way forward’
By Dr. Nicholas Ruwan Dias, PhD (Malaya) & Niresh Eliatamby, MBA (UK)
This article examines the challenges to business practices in Commonwealth countries from COVID-19, which is forcing a revolution of ‘People + Process + Technology’. The most important factor will be ‘People’ rather than Technology, since the Technology already exists.
They say “necessity is the mother of invention” and COVID-19 forced many around the world to rethink their daily lives. It has become a matter of utmost urgency to digitally transform our workplace. Companies that are able to use technology well to rethink their business models for the future by fast-tracking digital transformation will be the ones best positioned to survive and stay ahead of their competition.
Commonwealth states can be classed into two categories: One in which modern technology is already prevalent and can therefore easily transform to post-COVID realities; and the second in which technology and modern processes are still in a nascent stage and would need to make a considerable effort to transform.
States in the first category would include the UK, Canada, Australia, New Zealand, Singapore and Malaysia, among others. However, the majority of the Commonwealth’s 54 states would fall into the second category. Sri Lanka is taken as a case study for the second category. It needs to adopt technology, transform its business processes, and adapt to drastic changes in its macro and micro environment.
Our research is based on the methodology of the World Digital Competitiveness Ranking (WDC ranking) which defines digital competitiveness into three main factors:
- Knowledge: knowledge is determined by talent, training and education and scientific concentration.
- Technology: regulatory framework, capital, technological framework.
- Future readiness: following adaptive attitudes, business agility and IT integration.
Global Competitiveness: Where is each country ranked?
In order to attract investment in an uncertain post-COVID world, it has never been more vital for countries to focus on where they are ranked in global competitiveness. Based on the Global Competitiveness Report, the Competitiveness Index in Sri Lanka averaged 16.21 Points from 2007 until 2019, reaching an all time high of 57.11 Points in 2019 and a record low of 3.84 Points in 2007. The variables are organized into twelve pillars, with each pillar representing an area considered as an important determinant of competitiveness. Sri Lanka is the 84th most competitive nation in the world out of 140 countries ranked in the 2018 edition of the Global Competitiveness Report published by the World Economic Forum.
Global competitiveness index 4.0 2019 edition
Let’s talk statistics – Sri Lanka in 2020 January
| Total population | Mobile subscriptions | Internet users | Active social media users |
| 21.37 Million | 31.80 Million | 10.10 Million | 6.4 Million |
| Urbanisation | vs. Population | Penetration | Penetration |
| 18% | 149% | 47% | 30% |
Sri Lanka poses significant challenges to digital marketers due to the relatively low level of ICT penetration. Although mobile usage far exceeds the population numbers, only 47% of Sri Lanka’s population is active online. Only 30% is active on social media.
Development of 3G and 4G connections is also vital in any country. The Sri Lankan Mobile Ecosystem, which is based on a competitive mobile network market, is robust and well established.
Enabling ICT environment
The overall literacy rate in Sri Lanka was 92% in 2019. However, Sri Lanka’s overall computer literacy reported for 2019 was 30.1%, while the urban sector showed the highest computer literacy rate of 41.5% among residential sectors. Computer literacy rate for Rural and Estate sectors are 28.6 percent and 13.7 percent respectively, according to an annual bulletin on Computer Literacy Statistics – 2019, published by Department of Census and Statistics Sri Lanka.
Indeed, Sri Lanka presents a tremendous challenge for the adaptation of ICT in general, and the modernization of education using ICT in particular. In view of these limitations, it is not feasible to provide computer laboratories in schools. There is also an issue over access to broadband internet throughout the country. There are few rural teachers of ICT, other than a few professionals who regularly use a computer in rural Sri Lanka.
Internet connectivity
A key factor that Sri Lanka’s online marketers need to keep in mind is that 98% of those who are on the Internet do so through a mobile phone. In other words, the use of laptops, desk tops and tabs is extraordinarily rare. Thus it is imperative that online marketing be geared towards getting messages across on mobile phones, which raises multiple challenges as opposed to larger instruments.
| Total number of internet users on any device | Internet users as a percentage of total population | Annual growth in the number of internet users | Mobile internet reference share of social media users accessing via mobile phones |
| 10.10 Million | 47% | +4.1% +399,000 | 98% |
Reasons for the low penetration of non-mobile-phone instruments include high cost and less convenience in carrying around. Keep in mind that the vast majority of Sri Lankans travel by motorcycle, 3-wheeler or public transport, rather than cars and vans. Carrying a laptop can be cumbersome. Another reason is force of habit: Sri Lankan teenagers are purchasing mobiles for social purposes, mainly using texting. Most are on prepaid cards. Some of them may graduate to smartphones as they grow older. But once they have spent a significant sum on a smartphone, they are not likely to spend even more on a laptop or tab if their requirements are met by a smartphone or other type of mobile phone.
Share of web traffic by device
Each device’s share of total web pages served to web browser in December 2019:
| Mobile Phone | Laptops & Desktop | Tablet computer | Other Devices |
| 62.1% Dec 2019 vs. Dec 2018 | 36.6% Dec 2019 vs. Dec 2018 | 1.3% Dec 2019 vs. Dec 2018 | N/A Dec 2019 vs. Dec 2018 |
| +3.1% | -4.5% | -9.6% | N/A |
Further evidence of the dominance of mobile phones can be seen from the above table, with 62.1% of web pages being accessed on mobiles, with less than 38% from all other types of devices. While usage of mobiles has increased, usage of other devices has actually decreased significantly. This is not the number of users, but the number of pages accessed by each type of device, with users of laptops, desktops and tabs being more likely to access more pages on each device due to the smaller screen size of mobile phones.
Social Media Overview
Based on the reported potential advertising reach of selected social media platforms
| Total number of active social media users | Social media users compared to total population | Change in social media user numbers (Apr 2019 to Jan 2020) | Percentage of active social media users accessing via mobile |
| 6.40 Million | 30% | +8.3% +491,000 | 98% |
It is clear that the number of social media users, although relatively low in comparison to more advanced economies, is increasing at a significant pace. It is also significant that 98% of social media users utilise mobile phones, a key factor for digital marketers to bear in mind. Or to put it in another way, digital marketing that targets the general populace of Sri Lanka needs to design messages that are designed for mobile devices.
Social Audience Overview
| Number of people that can be reached with adverts on social media | Reported advertising reach compared to total population aged 13+ | Quarter on quarter change in advertising reach | Percentage of its ad audience that reports is female | Percentage of its ad audience that reports is male | |
| 5.90 Million | 35% | +3.5% +200,000 | 32.8% | 67.2% | |
| 1.20 Million | 7.9% | 0% | 40.4% | 59.6% | |
| 990,000 | 5.8% | +7.6% | 32.7% | 67.3% | |
| 264.5 Thousand | 1.6% | +11% | 29.3% | 70.7% |
It can be seen that Facebook enjoys an enormous advantage in advertising reach over other forms of social media, with LinkedIn a distant 2nd followed by Instagram and an even less significant number on Twitter. The preponderance of the audience on each of these platforms is overwhelmingly male.
Facebook Access by device (Jan 2020)
The device that Facebook users use to access the platform
| Percentage of facebook accessing Via any kind of mobile phone | Percentage of facebook who only access via a laptop or desktop computer | Percentage of facebook users who access via both phone and computer | Percentage of facebook users who only access via a mobile phone |
| 98.3% | 1.7% | 10% | 88.3% |
Analysing the methods used to access Facebook, which is the dominant social media platform in use in Sri Lanka, it can be seen that 98.3% of users are doing so through mobile phones, and 88.3% are using solely mobile phones with a further 10% using mobiles and computers. Only a paltry 1.7% access Facebook solely through laptops and desktops.
E-commerce Maturity: Financial Inclusion Factors
| Has an account with a financial institution | Has a credit card | Has a mobile money account | Makes online purchases and /or pays bills online |
| 74% | 5.3% | 2.4% | 6.2% |
| Percentage of women with a credit card | Percentage of men with a credit card | Percentage of women making online transactions | Percentage of men making online transactions |
| 3.8% | 7.2% | 4.4% | 8.3% |
Sri Lanka faces a critical challenge in that the percentage of the populace with access to sufficient means of credit is quite low, with a mere 5.3% possessing a credit card. A further 2.4% rely on mobile money accounts. Meanwhile, access to debit cards is more widespread. However, the prerequisite to using a debit card is that one must have funds in one’s account and Sri Lankans do not have a high rate of savings. This situation is likely to be exacerbated by the general slowdown in economic activity due to COVID, which has led to a significant drop in income and in some cases the possible loss of employment, all of which means that the average person would have less disposable cash in their bank accounts.
The overall percentage of the population that makes online purchases and/or pays bills online is just 6.8%.
There is also a significant gender imbalance in online purchasing, with only 3.8% of women possessing credit cards as against 7.2% of men, with the number making online purchases through all methods being 8.3% for men and 4.4% for women.
It is therefore clear that Sri Lanka needs the banking industry to take more concrete steps towards rapid enhancement of the percentage of Sri Lankans with the capacity to purchase online through credit. In marketing terms, social distancing would lead to a distinct lack of enthusiasm to travel to crowded shops in crowded public transport. It is therefore imperative to provide a larger segment of the population with the capacity to shop online.
Overview of E-Readiness Factors and Related Issues in Sri Lanka
- Connectivity and technology infrastructure: Measures access to basic fixed and mobile telephony, personal computers and the Internet for individuals and businesses. All the characteristics of the level of competition on the telecoms market include affordability, efficiency and reliability
- Political stability: How stable are the country’s Executive and Legislative branches of government? How efficient is the Judiciary?
- Consumer and digital adaptation: How prevalent in the country are ecommerce practices? What part of the online retail trade is carried out? How does the Internet use conventional business systems to be revamped and automated? How are businesses helped to develop logistics and electronic payment systems in this effort. Finance and government funding needed in IT?
- Legal & policy: The creation of e-commerce is based on the overall legal structure of a country and on specific legislation regulating internet use. How easy is a new business to register and how secure is privacy, in particular intellectual property, which can be easily the target of digital age piracy? Governments which promote the development of an internet-friendly legal environment are given high levels of policy and compliance.
- Social & cultural: To what degree is Sri Lankan society and culture accepting of the revolutionary transformations that will be required to traditional practices in the post-COVID world?
- Supporting services: Without intermediaries and auxiliary services, no organization or industry can operate efficiently. In e-business, consulting, IT, and back of solutions are included.
Golden Triangle
The golden triangle is equipped with three key components which are people, process technology. This is a holistic model for Process Improvement known and used for cross verticals (industries).
The three reasons why digital transformation is people, not technology
- It require a shift in mindset
When individuals within the enterprise are not interactive, introducing the new technology systems and technologies would accomplish very little. Organisation employees must be able to vary in their thought about how the business and its clients will achieve success. In addition to acknowledging the vision and positive impact of digital transformation on the workplace, every worker must also embrace the notion that digital technologies entail changes in the way they function.
- It requires behaviour change
Employees must adapt their approach to their careers, use data and use modern digital technologies in order for a digital transition to take place. There would be no permanent shift to merely implement new technology because people need the expertise and experience to integrate new technologies into new and already existing workflows. The belief that digital transformation can not have full impact without people using new technologies is also sponsored.
- It requires the support and drive of leaders
The first step in cultural change is understanding that it is people first, and that it is a leader’s job to find ways to involve and motivate their team.
Leaders must spot new trends and put together their thoughts in multiple perspectives. They should rapidly bring on board the digitally savvy talent of tomorrow. Leaders must establish collaboration among the team. It is about working relentlessly to break down silos and getting people working together to solve customers’ and the organization’s issues.
People
Most critical roles in Digital Transformation. The C5 Model:
● Catalyst: The spark within an institution behind the movement to install technology, adopt new processes, and persuade people to accept the new processes.
● Connector: Those who are attuned to what is happening, not only in IT but in other business areas as well. They know people and the work that is going on in the company.
● Contender: They are the ones who support us to ensure that we do our best. They think objectively about the way forward and do not fear facing the status quo. This is different from someone who still doubts and blocks things.
- Contortionist: Someone who can help an organisation to adapt to changes and unexpected turns.
- Co-pilot: The path and support that keeps the ship on the right track; remember where we seek to go and the road that we decided to take.
It is vital for organisations to develop a people transformation strategy that aligns to their business strategy (Organisation + Market), which places the employee function firmly at the center of creating the employee value proposition.
The implementation of technology and the transformation of work processes requires the most important ‘People’ factor to be already in place. It requires a change in traditional and antiquated mindsets to ones in which the above four types of persons would be given sufficient importance in order to implement changes to technology and work processes.
Process
Every shop, every office, every factory, they are work processes. The more modern the work processes, the more cost-effectiveness and efficient an organisation will become. The addition of technology will bear full results only if they are married with work processes that would fully utilise technology.
Technology
The technology exists in abundance for the requirements of post-COVID-19 operations in most industries. However, the ease of implementing such technology requires the ‘People’ element to be fully in tune with and aware of what technology is already available and what processes can be revolutionised by the implementation of new technology.
(Data for this analysis was compiled from Globalwebindex.com, Statista.com, and Datareportal.com.)
(Copyright Nicholas Ruwan Dias and Niresh Eliatamby)
