Why Sarojini nagar business model works?👜

The insights that could help every consumer brand.

Apr 12, 2023

Welcome to the 140th edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 95,300+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more

H&M, Zara, Adidas exist 🙇🏻‍♂️
Sarojini : “Hold My Beer” 🍺
Here’s how Sarojini is winning ⬇️

Image : The nostalgic gate to Sarojini nagar market

Quick context 🗓
The construction of Sarojini Nagar started in 1955 by the Central government for its employees while the shops were allotted to refugees from Pakistan.

Fast forward 2023 ✨
The place attracts upto 35,000 daily buyers on weekends. This is by design. You can’t have “chance” bringing in daily traffic for over 68 years.

Why Sarojini business model works? ⬇️

1/ Faulty orders = cheaper sourcing cost ⚡️
The big manufactures in & around Delhi supply to some of the most leading brands like Gap, Mango, H&M, Adidas. To play safe, most manufacturers produce goods at a 3% surplus of the actual order - the good ones gets exported & the faulty ones land up at Sarojini.

2/ The right ideal customer Vs pricing 🎯
Sarojini market then targets the fast fashion crowd who want to buy brand but can’t/won’t spend a bomb - especially urban women. Feel of a brand & pricing of a roadside shop makes it the perfect product <> customer fit.

3/ The Chakravyuh strategy ⚔️
While every brand strives for differentiation, Sarojini thrives by selling the same goods. Since most shops in Sarojini sell export surplus or rejected items from top brands, they've the same vendor resulting in a 60-70% similar-looking inventory at all stores. It creates an illusion that these products are in demand and that’s why every store has it.

4/ Illusion of steal deal ☁
Famous for extensive bargaining, the market is a pioneer in making its customers feel like they've earned something simply by letting them bargain for it. Go speak to your Delhi friend, they’ll tell you more.

5/ Category expansion done right 💳
Fast fashion solves for buying frequency. But, what really solved the average bill per visit was adding categories from bags to sunglasses, you name it - Sarojini has it. Plus, it caters to every freaking person in the family.

6/ The selling strategy ❤️
I dare you to go to Sarojini & not buy anything. Most shop owners will try to show you how the item looks on you before purchase. Really hard to not buy something that’s looking k*ller, right?