Consumer Trends in India

In June, I traveled to India for about 3 weeks. These are some observations I made during the trip.

1.) Smartphones are everywhere. Now data is a lot cheaper.

No matter where you go, you see smartphone shops. Sometimes you see the same company stores across from each other on the street. India is still experiencing double digit growth in terms of smartphone adoption.

The main difference you see from past years is how cheap data has become. With the introduction of Jio, prices for data have really gone down — now you can get 1GB of data per day for around 2 dollars a month. This is really going to open up usage of apps here.

The only limitation I see is that the phones are so varied here so lots of people have slower performing / devices with smaller storage capabilities etc…

2.) Retail is evolving fast — especially in the offline sector.

Flipkart and Amazon India have taken online retail by storm and people use these services for electronic products, appliances, and clothing. But there are some really interesting things happening in offline retail as well.

Traditionally, the primary way that people get their daily need products, is through small businesses called “Kirana” stores. But there has been a rapid rise in national discount retail chains of late which include D-Mart and Big Bazaar.

These stores offer a wide selection at low prices and they have become highly successful. You can think of them as mini-Walmarts. They have expanded their footprint to even small cities throughout the country.

3.) Localization is the key tactic to win against global brands.

Other than in social networks and messaging, India has a set of homegrown companies / services that are competing with global brands in terms of entertainment, finance, transportation, and restaurant services.

Entertainment

Obvious players here are Netflix, Amazon Prime Video, and of course Youtube. But the one that stood out while I was here was Hotstar — which is owned by Star India (part of 21st Century Fox).

Not only do they have a wide selection of localized content in terms of TV shows and movies, they also carry IPL matches. They benefit from being able to get distribution via traditional TV since their parent company has a set of channels that are available.

Finance

The most interesting company in India in terms of finance is Paytm. They started off as an app to top up mobile payment plans. But now they have become a one-stop shop for transportation, offline entertainment (movies / concerts), and even what you would find at a mall.

They are also a force in real world transactions — you can use your Paytm balance to pay for food or goods and even get discounts when you do. Overall, Paytm really focused on the local customer needs and were able to get into the market through a pain point which was mobile phone bill payment and now have expanded to all types of transactions that involve transferring money.

Transportation

The two main ride sharing services are Uber and Ola. Both offer the ability to get cars within a city to get from one point to another with different offerings in terms of the type of vehicle.

But there are a couple of things that Ola does that is localized to the needs of customers in India. The first is the option to rent cars for periods of time as opposed to set destinations. In this case, you will still have a driver come along with you but you are able to get a car for several hours. This is especially useful if you need to make multiple stops. It’s kind of like Zipcar but with a driver basically.

Another feature that Ola introduced is the idea of a outstation visit. These are one way or round trip bookings in which you are able to go outside the city to a destination. This is especially useful for weekend trips or if you need to be transported to another location for a period of time. This replaces buses that are often used for these trips currently.

Restaurant Services

Most people are familiar with Yelp / Foursquare as places to find restaurant reviews and apps such as Uber Eats / Caviar for delivery, but the most popular app for both in India is Zomato.

Zomato has user reviews similar to other apps in this space. But the one thing they do in India (and other markets they operate in) that is different is actually have people on the ground that collect menu information, photos of food, and also information about the decor itself. Taking this approach has jump started their service and enabled them to really scale the supply side.

They have also recently gotten into the delivery part of the market and employ people to provide that service to restaurants that are featured on the site.