Do Indian consumers want everything cheap?

“Indian consumers want everything cheap, right? – no way to build a profitable consumer brand here” – said a founder friend at a startup mixer. I don’t think we understand the consumer game well, here’s why ⬇️

Country of 144 Cr people 🇮🇳
– 120 Cr Internet users (ET reports 80 Cr)
– 30 Cr unique UPI users
– 28 Cr food ordering users
– 09 Cr learnt online
– 08 Cr income tax filings
– 3.5 Cr mutual fund investors

If we understand income tax report it clearly shows that consumption is driven largely by the middle class as a pure percentage. Only 0.27 Cr Indians make ₹1Cr+ (grew 50% YoY) while 4.65 Cr Indians make ₹5L+ (grew 250% over 2 years).

4 biggest spends middle class does 💰
– Real estate
– Education
– Shopping
– Travel

So, a $100 mil revenue game in India is either —
Option A → Build $10,000 ARPU X 10,000 Indians
Option B → Build $10 ARPU X 1,00,00,000 Indians
Here, ARPU → Average Revenue Per User

Your product can’t be both, that’s where most consumer brands are stuck. They build a low ARPU offering and keep complaining about ‘depth of market’. There is no depth for low APRU, period.

Classic example is any $1000 ARPU product for masses, you can’t find 10 Cr Indians to pay $1000 – it’s pure math. Think of all $1000 ARPU brands.

So what’s the framework to think though? 🧠

1/ Build ‘value’ for the right audience.
Pick one, every consumer brand doesn’t need to be built for 10Cr Indians.

2/ ‘Communicate’ the product value.
Position it either on the lower or the extreme higher end. Ensure the target audience deeply understands what the product does, has enough trust and understands if it’s for them or not.

3/ Get them to “experience” the value.
Most products fail to do this before the first purchase. India’s trust deficiency requires you to really prove your product to a potential buyer.

4/ Capture the right amount of ‘value’.
If all the 3 are sorted – capturing becomes straightforward through pricing.

Who are you building for, really?
Ask this to your team – it’ll help.