The year made news with big consolidation of Uber Eats within Zomato. Why should this acquisition of Uber Eats (where Uber took in 10% of Zomato in exchange – at $3.5 billion overall value) matter to us?

Some say it was because we are a discount-driven market. Is this a fair assessment? Companies like Amazon, Flipkart, even Reliance Jio are burning money to gain a significant hold on the market. It’s all or nothing. The old marketing and consumer behavior logic dictate that we create demand through sweepstakes, push out the competition with discounts or service standards, etc. It’s all about making and remaking the market.

There are three factors to this so-called ‘discount-driven market’.

1. Scale and depth – India has become the ‘Golden bird – Sone ki Chidiya’ once again. First it was the spices. Now it’s the youth. We were the suppliers then. We are the consumers now. Companies view this as an untapped zone with millions of potential new customers being added every month or week.

451 million monthly active Internet users (March 2019)  – that’s India, in second position, after China. The internet and smartphone user penetration has opened up opportunities in retail, food delivery, home services, and all types of entertainment.

Its unyielding growth has bought global companies put up billions in India. The consumption patterns are consistent and healthy. They keep moving or extending across demographics, in terms of age, gender, etc. The bell-curve is spreading and rising.

The icing is growing and successful middle-class achievers. This adds an inherent or intrinsic aspiration value and disposable income.

2. Competition – Since the market is ripe for the taking, companies come-up with layered and structured solutions. Either they pack their offerings with assets and values, or they strip it down to make it worth more – ‘for each paise on the rupee’. Companies like Amazon went the first way. Companies like Reliance Jio (and all others in the broadband wars) went the second way.

At the end of the day, it’s an equation. You put in x amount for y months to reach a point where the results move over the lovely ‘inflection point’. Let’s call this estimated market share value to be z. So as long is xy

3. Replicability – India is unique marketplace. It’s a compliment in terms of our unity and culture. Even though we seem diverse and (sometimes) at odds with each other. At a base level, we are quite similar. Religion or language, we share similar values and drives.

This helps companies and marketers to ride on or capture common needs quickly. Even a seemingly niche need could be potential scaled-up to a generic level (with the right placement). That’s why an average Indian smartphone has at least one app for every basic and niche need. The consumption, and its replicability, is almost universal.

So if it’s such a ripe market, where do companies like Uber Eats go wrong? Here are some Myths some of us readily accept.

1. Myth – India is a discount-driven economy



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Everyone loves discounts. It’s a time-tested tactic. However, if a multi-billion dollar valued company pins all their hopes on this single aspect, then they can’t blame the target audience.

India is ‘not’ an exclusively discount-driven economy. We are terribly loyal to brands, just look at craze of some of our films. We have value-driven and not discount-driven. It’s just the marketers (especially social-media) that tend to take the short-cut for higher engagement with discounts.

It’s not the market’s fault that it became so desirable for anyone and everyone in the world. Since the Indian market is spoilt for choice, and since the backlog of competition keeps piling up, the companies get in a hyper-FOMO. It’s pure and basic game theory.

Indians are just making hay till the sun shines. Give us good and consistent value, we would respond.

2. Myth – India is emotion-driven, not intelligence-driven



[image error]Taj Mahal and the ‘Great Indian Stereotype’

It’s totally wrong and extremely irresponsible to extrapolate ‘sensitive’ to emotions to ‘ driven’ by emotions. Not by a long shot. India, right now, is far more adaptable in terms of technology, concepts and experiences than any other (top market) nations.

The learning curve is short, almost non-existent. It doesn’t matter which demographic you are targeting. Whatever you throw at them, they’ll turn around and say, you got more? Or in Captain America’s words – ‘I can do this all day’.

[image error]Captain America – Civil War

This is the core problem which makes an ‘Uber Eats’ throw in their towel. Remember elusive, ‘Inflection point’. In a graph this is the point where the slope of the curve substantially changes, ideally from a convex to concave moving upwards.

[image error]Take-off at ‘inflection point – Image source – Marketing Insider

As per the aforementioned equation, xy

This means that the ‘advantage’ or ‘edge’ you thought you had wouldn’t last for more than a few months. Pretty soon, the market would make it the new norm and you would be at the same point you started from (in terms of market share). You need to move fast, building on your work continuously.

For example, mega-e-commerce sales were a novelty once, a long time back. Now they are so normal, people take it as a fact of state and life.

3. Myth – India decides and buys as the world buys

This is something that not many would accept. The phrase goes, think global act local. However, it doesn’t show in the actions of anyone. What’s the point of an Alexa in Indian life? Companies consider India as an extended market to the United States of America. It’s not.

If a company can’t understand the basic decision patterns of the Indian market, they shouldn’t complain if they lose on it. In recent memory, the only company that successfully cracked it was awarded likewise. Paytm. The company solved a very basic problem, without the fanfare of the world, and the market gulped it up.

Don’t bring in global products and try to fool us to buy them. We would buy them, but you won’t make much of a difference. Come here and develop solutions to the local problems.

The other major drawback is that very few companies understand how a household spends money. That’s why a DMart is successful where other stationary retailers fall by the wayside. Indians diligently plan their monthly budget. They are more than one decision partners. They give a brand some breathing space, as a trial, before they switch to another. It’s a very empirical process. Almost like business to business (b2b) procurement. Value-driven and smart.

Where did Uber Eats fail? Not in many places.



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They had a good plan with good focus on value. They became unintended victims of an unforgiving market. The ‘inflection point’ kept moving ahead till a point where they (food delivery companies) have burned more $3 billion to sustain or capture a decent share. The point, however keeps moving due to fast and insatiable adoption rates. Zomato and Swiggy are stagnating in valuation with investors keeping their burned hands safe. Ola dipped in the food delivery, twice, market to fail.

In a way it’s good as Uber faced heavy losses in the past year. It’s important for them to not cut corners within their primary business.

What’s the takeaway?

The Indian market is a siren song. It’s sweet and enticing. But only the brave and fast dare move close. At its core –  it’s very tough.

If a company, Indian or global wants to win here, then India should be awarded a complete entity in terms of marketing, business development, and most importantly, product development. Don’t, simply, have your CEOs visit us once a year. If it’s not your focus, it would stop you dead in your tracks. 

References for stats:

LivemintYourStoryEconomic TimesBizEnglish (cover image)