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All the points are prevalent other than the red tape. But it’s not clear at all that red tape has anything to do with the problems these companies are facing.

All the points are prevalent other than the red tape. But it’s not clear at all that red tape has anything to do with the problems these companies are facing. Considering that several of the companies mentioned in the article have corporate governance issue, arguably the problem is a lack of regulation. Or at least a lack of good regulation and/or implementation of the regulation, as opposed to red tape.

kamaal 2y ago
The biggest problem in India is thinking they can permanently buy customer loyalty by offering big discounts in the beginning. This is where the 'intense competition' is dangerous part comes from. After you have spent billions on subsidising prices for the customer, newer companies come, and do the same. The customers see no issues in now buying from the newer companies. The older companies find themselves in a hard position with no profits and big debts. In India customers are loyal to only one thing 'cheap prices'. Thats all there is to this story. Many times even if there is no real competition, you are often competing with the customers mindset itself.
- kelipso 2y ago
  Yeah profiting after getting network effect or monopoly or growth is a function of customer inertia in the face of rising prices. And India has way lower inertia to than US.
- MichaelZuo 2y ago
  How does this explain the phenomena of e.g. Repeat Mercedes-Benz buyers, even when other automakers offer the same luxury features at a lower price point (such ad Audi, BMW, etc...) ?
  - eig 2y ago
    There’s a big difference in customer psychology when you’re dealing with a luxury good vs tech products.
  - glimshe 2y ago
    Most of Indian consumers (or consumers anywhere) aren't Mercedes customers. The luxury market is notoriously price insensitive.
    - MichaelZuo 2y ago
      The same applies for Toyota customers in India, or so I've heard, viz. Nissan, Hyundai, etc...
bongoman42 2y ago
Consumer's limited spending power should not be discounted. I worked for an Indian startup and it was clear that India gives you the user numbers to show growth but you are never going to able to monetize it because you can't squeeze blood from a stone. The typical strategy is use India to build and test products, and market to first or second world countries. The _only_ startups that could turn a profit were the fantasy gaming and gambling ones. Ultra predatory business practices and powered by addiction and the fact that UPI enables zero transaction costs on small amounts so they can make a profit with individual sales as low as a few cents.

kamaal 2y ago

The biggest problem in India is thinking they can permanently buy customer loyalty by offering big discounts in the beginning. This is where the 'intense competition' is dangerous part comes from. After you have spent billions on subsidising prices for the customer, newer companies come, and do the same. The customers see no issues in now buying from the newer companies. The older companies find themselves in a hard position with no profits and big debts. In India customers are loyal to only one thing 'cheap prices'. Thats all there is to this story. Many times even if there is no real competition, you are often competing with the customers mindset itself.

kelipso 2y ago
Yeah profiting after getting network effect or monopoly or growth is a function of customer inertia in the face of rising prices. And India has way lower inertia to than US.
MichaelZuo 2y ago
How does this explain the phenomena of e.g. Repeat Mercedes-Benz buyers, even when other automakers offer the same luxury features at a lower price point (such ad Audi, BMW, etc...) ?
- eig 2y ago
  There’s a big difference in customer psychology when you’re dealing with a luxury good vs tech products.
- glimshe 2y ago
  Most of Indian consumers (or consumers anywhere) aren't Mercedes customers. The luxury market is notoriously price insensitive.
  - MichaelZuo 2y ago
    The same applies for Toyota customers in India, or so I've heard, viz. Nissan, Hyundai, etc...

bongoman42 2y ago

Consumer's limited spending power should not be discounted. I worked for an Indian startup and it was clear that India gives you the user numbers to show growth but you are never going to able to monetize it because you can't squeeze blood from a stone. The typical strategy is use India to build and test products, and market to first or second world countries. The _only_ startups that could turn a profit were the fantasy gaming and gambling ones. Ultra predatory business practices and powered by addiction and the fact that UPI enables zero transaction costs on small amounts so they can make a profit with individual sales as low as a few cents.