Why loose cigarette, sachet shampoo & prepaid recharge work for India? ✨
Welcome to the 121st edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 94,400+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more
Remember your childhood? 👶🏻
How often did you buy a shampoo sachet over a bottle?
The last run to paan shop? 🚬
How many walk-in smokers bought a whole cigarette packet?
Your first mobile sim-card? 📱
Did you even think of getting a postpaid card?
So why do we love this “sachet pricing” in India? ⬇️
Some of the mind blowing facts about how Indian consumer thinks.
First, the appetite to pay 💰
Take a look at the spending habits for "Bharat Janata". You'll quickly realize that most people still live from paycheck to paycheck and have little saved up. This means they have limited money coming in each week/month. It limits how much money customers can spend in a month.
Core reason why shampoo bottles are perceived a luxury vs sachets.
Second, low trust society 💔
Do you trust the brands you buy? Would you buy a lot of stuff from them? Probably not. We have been tricked a lot in the past → like with shocking phone bills in the 90s, fake products with bad quality and more. That's why we're careful shoppers and don't believe everything we hear.
Also the core reason why TATAs can sell salt & Indica but a new D2C brands will not be able to sell the same thing even at 20% lower price point.
Third, guilty purchases 👀
Indians don't like to make visible purchases that make them feel guilty. For example, smokers usually buy a packet of cigarettes instead of loose cigarettes. The desire to pay isn't the issue, but the "social taboo" is.
Core reason why every Indian smoker justifies loose cigarette purchase by saying “I’m not buying the whole packet”.
Fourth, we love long term control 🕹
With prepaid recharges, we don't want to be tied to a telecom operator for a long time. This goes back to the problem of low trust in society. But, it's bigger than that. Indians also want control over their recurring purchases.
Core reason why we see over 9.7 million mobile numbers ported in a month within prepaid mobile plan customers.
What can you learn from this? 🎯
Take few seconds to think about your customers.
1. Do the have appetite to pay?
2. How many of them look for the best value?
3. Are repeat purchases = repeat decisions?
4. Are we focusing on pricing, value, small packages?
Missed our coverage for January?
Binge read it now.
Jan 30th : How did Zoho get to ₹ 2700 Cr profits?
Jan 25th: Why Netflix wants you to watch web-series over movies? 🍿🎬
Jan 20th : Why are people buying a $2500 mattress? 🤯
Jan 17th: Why Jio plans to stream IPL for free? 🏏
Jan 9th : Why does Domino's send extra "Oregano packets"? 🍕
Jan 5th : How did Marlboro & Redbull build habits?🚬
Jan 2nd : How can Air India beat Indigo in 2023? ✈️
Over 100+ stories from archive click here.
Love Growth Shorts Newsletter? 💙
Share it with your WhatsApp groups, thank you.