“India is a very price sensitive market”- A predominant world perception. Every local and international brand has the same bias and is trying to invent an ideal pricing strategy that can be best implemented.
This is due to multiple factors: the country’s historical economic constraints and the general frugality observed among its consumers, diverse economic demographics, cultural thriftiness, saving mindset, and many more reasons why this label is tagged to the country.
Apart from the mentioned factor, the notion is backed with several live examples such as success stories of several campaigns.
e.g.
₹1-10 shampoo packs by FMCG,
Mc Aloo Tikki by Mc Donald’s
Earbuds that cost less than ₹1000-1500 range.
However, this does not validate the argument completely because, with the set of positives, there are a few negatives as well,
e.g.
Tata Nano – cheapest car yet failed
Chevy Spark – affordable car showed poor sales
Reebok cheap shoes- failed campaign.
Yet brands majorly emphasize pricing.
Price was a sensitive issue in the past, but now the current consumption pattern has shown a more value-conscious market. Some studies show a paradigm shift which signifies the increasing prioritization where consumer seeks balance between the cost and the overall value proposition where product quality, utility and accessibility, brand reputation, and a lot are considered.
The recent transformation in consumer behavior can be attributed to several factors. First rising disposable income, increasing middle class income level, driven by steady economic growth aspires for the consumers to spend on premium products and lifestyle.
Other than disposable income factors such as exposure to global brands, e-commerce proliferation, brand awareness, and customer satisfaction drive the changes. The ideal example could be Apple products, over the last few years, Apple has shown a notable increase in its market share in Indian metro cities. As per a few studies, the company’s market share in the premium smartphone segment grew from 35% in 2019 to over 48% by the end of 2023.
To substantiate the shift toward value conscious several statistical indicators can be considered A survey conducted by Deloitte in 2022 revealed that 58% of Indian consumers prioritize product quality over price when making purchasing decisions. This is a significant increase from 47% in 2018, indicating a clear trend towards value-based buying.
In the e-commerce sector, a study by RedSeer Consulting highlighted that approximately 70% of online shoppers in India are willing to pay a premium for products that offer better quality and features. This trend is particularly strong in categories such as electronics, fashion, and home appliances.
Thus, it is undeniable that the Indian market landscape is evolving from being price-conscious to a value-conscious market. This is driven by rising income, access to global products, changing consumer aspirations, and many more factors. They no more look for cheap products but seek a product that justifies their budget, needs, the best possible value proposition it can offer, and the overall experience.
For Businesses, this evolution brings both challenges and opportunities. Understanding the distinction and adapting to the changing mindset can make a business thrive. As the fastest-growing economy, India offers the best platform for all entrepreneurs looking to introduce new products.