One of the biggest questions most startups and entrepreneurs have pertains to the working and monetisation of an app. Dippak Khurana, Co-founder and CEO, VMAX, at MobileSparks 2016, spoke about how the world of mobile is different in India. Dippak says,
“As an entrepreneur, I have met different kinds of entrepreneurs, startups and people, and over the past six months, I have started noticing a pattern of challenges that they seem to face. It is in understanding the core Indian consumer.”
The world of mobile and technology is changing so fast that what is present today will not exist two years from now. Dippak believes that it is important to understand India in order to understand its consumer.
He divides India into three segments -
- India 3 – 55 percent of India, 650 million people, income of Rs 1,500 p.m.
- India 2 – 30 percent of India, 450 million people, income of Rs 8,000 p.m.
- India 1 – 15 percent of India.
India is a low ARPU (Average Revenue Per User) market, essentially similar to an India 3 market; however, the vast majority of digital companies focus on the problems of the smaller India 1 market, and if you look at it, value added demand should equal ARPU enhancement. Dippak says,
“If you look at the FMCG segment, which was a massive chunk of the market, you'd see that they found bigger and better market sales when they started selling shampoo sachets, and when you take that to the mobile market, you realise that the ‘Chota Recharges’ that came out were rather popular. However, today, a vast majority of the digital companies and app developers are focused on India 1.
Breaking down the type of phones used by the Indian consumer, Dippak adds that 55 percent of India (India 3) uses smart feature phones. India 2 is the less than Rs 15,000 phones, forming 23 percent of the user base, and India 1, a considerable minority, sees the phones with price tags of more than Rs 15,000. And yet, most of the apps and the way they are built are focused on India 1.
Dippak believes that ‘unbundling mobile India’ means ‘unbundling our thinking’. Today, there are few companies that even look at or understand the market beyond India 1. Thus, Dippak says,
As entrepreneurs and app developers, we need to understand the large India 3 market, which we are rather unaware of. And the only way we can actually understand that market is by delving deep into it and being with the customer.