Big Spending Small India versus Small Spending Big India

A recent Founding Fuel story beautifully articulates how India as we know it today, is actually made up of three countries: India 1, India 2 and India 3. India 1, according to the article is made up of the highly affluent section of Indians and accounts for 15% of the total population. This population flaunts the latest smartphones, consumes data packs at whim and is always eager to try new apps, whether they are for E-commerce, gaming, ordering food online or hailing a cab.

Next comes India 2 and India 3 which account for 30% and 55% of India’s total population. India 2 works hard, saves money and does not have the disposable income that India 1 boasts of. India 3, although the largest section of the population, does not even make a dent to the economy and seldom is a part of it.

All this while digital businesses have only been focusing only on India 1. The first wave of growth for digital companies came from this India 1. However, if these businesses want to stay relevant or gain scale, they would now need to focus on India 2 and India 3. This is because today, it is India 2 and India 3 that will drive the major bulk of growth, with 80% of users coming from these markets.

However, extracting revenue out of this massive India 2 and India 3 user base will be the real challenge and the next unicorn will be a company that can successfully tackle India 2 and India 3. Let’s say you are a mobile app or site publisher looking to expand your user base in the country. Although India 2 and India 3 is the opportunity you were looking for, how do you monetize users from the lower income groups from India 2 and India 3 at scale?

Don’t get overwhelmed and take the easy route by pushing this opportunity to monetize India 2 and India 3 to tomorrow. The mobile industry moves too quickly for you to play catch up and so, the only right time to make the most of it is today.

Let me give you the example of telecom operators to help drive the point home. A few years ago, telecom operators went through a similar journey trying to capture the massive volume of growing audience from India 2 and India 3. Drawing inspiration from the FMCG sector’s sachet-based approach, telcos engaged this audience with different tariff plans for different users and right-sized SKUs. The result was that they could drive a collectively higher volume of revenue from these low ARPU users.

At Vserv, we have solved this challenge for mobile app or site publishers by enabling them to sell Utility product offers that would have mass appeal, to India 2 and India 3 users. With our Segmented Recharge Offers, we’ve added a flavor of uniqueness to these offers through our direct partnerships with Telcos, which enables us to have them push segmented offers, exclusive and unique to the publishers’ users.

Today, what we have is a friction-free way of generating revenue from the India 2 and India 3 users on your apps and sites, and you can do this at scale. Many of our publisher partners are already reaping the benefits of our Segmented Recharge Offers.

Here’s how it works for you. With India 1 you could make Rs. 50 per user, per month, but you can do this with only 10% of your users. The remaining 90% of users is where you can make Rs. 5 per user per month, which offers a massive advantage of economies of scale.

Given the rapid growth pace of India 2 and India 3 audience means if you put this model in action today, you can build on it to reap the benefits not just with the next 300 million users, but potentially the next 1.2 billion Indian users. Adopt this model and instead of trying to find a needle in a haystack, you can monetize the entire haystack.