Emerging trends in India
I am Aarihant Aaryan! Welcome to the Iron Sharpen Iron newsletter,
I share my weekly homework on building businesses, learning about human behaviour, and sometimes decoding industries and business models for fun.
I can’t control my curiosity :)
1. BMW yet to grow in India
BMW is the best luxury car across the globe, in fact they made close to $150 Billion in revenue in FY22
Interestingly their India business contributes only 0.5% of their overall revenue, but why are they failing in India?
See, what works in the West doesn't work in India BMW makes sense in first-world countries because more than 90% of households own a car
But India is a 2-wheeler market, close to 49% of households own a bike and only 8% of households own cars in India
less than 10,000 BMWs are sold in India every year, it's just because our per capita income is around $2000 and most Indians don't have the consumption mindset yet.
2. SUV India’s most favourite car category
The most-selling cars in India are no longer cars like Swift or Honda but SUVs how did the SUV category, that's 2 times more expensive than other categories gain market share?
As of today, the SUV category holds 50% of the 4-wheeler market, It's market share doubled in the last 5 years
See categories like sedan, hatchback are crafted for middle-class India, who don't commute much or have any aspirational desires
But the SUV category was always positioned as a premium category, that would not just help consumers to signal their status but also fit in the needs of the growing urban class in India
Adding to that craze for SUVs expanded as the waiting time is more than 10 months, it's because of the shortage of semiconductors which is making it hard to scale production and match the demand.
3. Kindle use case is for deep fiction
The biggest use-case of Kindle is to read adult and romance content
In 2023, Amazon sold close to 475M e-books, e-book hold 67% of the entire book market.
The biggest use-case of Kindle is to read romance and adult content, 46% of their global sales revenue came from adult fiction titles
The reason the adult category saw a rise in E-books is because of the convenience and privacy it added for consumers.
Consumers could just buy an e-book and read it on their devices, The previous experience was buying magazines, and books and struggling to find private places to read
4. Talking to opp sex in India, is still a shame
In India talking to the opposite sex is treated as a shame, yet dating apps like Tinder and Bumble make more money in India than in most Western countries.
In India, there's a huge social stigma around the interaction between the opposite sex, and the social stigma becomes stronger as you go to tier 2,3,4 cities in India.
In social dynamics like these, dating apps turn out to be a blessing for consumers as they crave to talk to the opposite gender but have been limited from doing it for a long time.
In Western countries, the opportunity is small because there's no social stigma around the interaction of opposite genders
These dating apps help consumers unlock that desire and discover people according to their likeness and connect with them.
They solve for communication, discovery and matchmaking which is everything the consumer wants
5. Sting trying to replace lunch for India-3
Sting founded by Pepsi, made close to 1000 crore in revenue in FY23.
They're the largest cold drink in India and they have gone ahead of Sprite and Thumsup by just executing this small insight
Pepsico is the master of beverages in the world, but they had a tough time beating Red Bull in India,
that's when they got the unique insight that not everyone can afford Red Bull
So they launched Sting at a 20rs price point as a non-premium drink, their promise was 1/4th the price of Red Bull and half caffeine.
Sting also launched funny ad campaigns with Akshay Kumar to increase awareness and they saw a massive uptake
Consumers started creating weird cases out of Sting, and daily wage workers found Sting affordable and started using it as a substitute for lunch.
Well that's what affordability does, once your product is affordable consumers create weird cases out of it
If you have any thoughts or questions share them in the comments :)
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