By Shivaji Dasgupta
Trust the Ambanis to break the convenient cohabitation of Coke and Pepsi. Campa Cola, relaunched with aggressive pricing, is evoking panic reactions from the leaders.Dramatic price cuts, dealer margin swings and fairly soon, ‘budget’ sub brands.
Here lies a lesson for categories beyond colas,under the customer-unfriendly jurisdiction of ‘creator’ cartels. Due to technical entry restrictions, erstwhile nationalisation, distribution momentum, regulatory barricades or simply being out of the radar. Campa Cola’s disruptive stance may lead to the abdication of status quo in comparable playgrounds.
The Indian floriculture market is projected to reach `714.6 billion by 2032, with retail profit margins hovering between 50% and 70%. The Indian shaving care market is projected to grow to $2.66 billion by 2030, with leader Gillette reputedly enjoying 40%-50% margins. Prescription glasses can potentially enjoy profits in multiples while contact lens solutions may deliver about 50%.
Children’s products and decorative items, bakeries and catering services rarely assign more than 30%-40% to costs. Legal services, medical expertise, event management, fashion designing and a whole host of structured advisory services still operate on an irrational acquisition logic.
In heritage delivery structures, extraordinary early mover profiteering was sustainable. Unlike the asset-light, tech-enabled, hybrid commerce, outsourced manufacturing regime of the day, fuelled by rigorous digital search. Thus fuelling a brand new customer-centric balance of power.
According to a 2022 BCG report, rural areas will be responsible for 54% of online shoppers and 24% of online spending by 2030. A clear casualty of such rampant scalability will be ‘legacy’ profit margins. With around 80 million ‘affluent’ households by 2030, premium experiences are already growing faster than mass. Modern upgrading consumers, however, seek logical justification for the wallet splurge, from colas to condominiums.
Savvy entrepreneurs, from personal grooming to cloud kitchens, are equally ready to deliver quality at volumes, aided by device-to-door access. Medplus has already disrupted Retail Pharma with factory-plus pricing for authentic medicines.There is no room for cartels exploiting both user and trade,as exemplified by the current dislocation of Coke and Pepsi.
Technology has successfully enabled the next wave of liberalisation, instigated by consumer culture and not policy licences. Thriving on thoughtful choice and not lured by provocative imagery. Where only defensible value wins and everybody is welcome to play.
The author is an autonomous brand consultant and writer.