India an Economy of Discounts?

Why does a Business Discounts? What is the impact of discount on economy? Should it be Regulated?

The last decade has seen the rise of thousands of startups in multiple sectors. A big credit for this goes to the Indian Inc. In fact India has progressed a lot as far as it takes to develop a culture or an ecosystems for startup in a country. Lets imagine it like this: Imagine there is earth and people on earth need food. To fulfill the demand of people there exist few big companies. To boost economy government creates ecosystem for young companies to produce more food. Foreign and Native Investors see an opportunity to 2X or 10X their investments through this channel. A great setup where everyone gets what they need!

But is it? what happens if it's not regulated growth?

What happens if one of the Big or small company starts discounting or offers cash backs or wallet money to woo customers? It impacts other small companies P&L as financially no young company factors burning cash for no value add to its company. These are the companies which are not funded or do not have cash flows equivalent to hustle with competition or funded with no intentions to manipulate sales. Products start competing on price and not for value which they were developed or offered to the buyers.

To stay alive other companies may focus more on cutting cost than quality. Affordability should not lead to compromise in quality- A learning from China. Companies making awesome product may have far superior quality product, may have a fair working capital but may not be able to scale to its true potential or even be profitable if other companies start to burn cash to woo customers. Its a double edged sword. It impacts the companies themselves and it may have a severe long term impact on economy if discounting or otherwise called predatory pricing manipulations is not regulated.

Imagine an Economy of discounts where discounts and cash backs are a norm, where unit economics are always negative, how will we ever compete with china or other quality focused regulated markets where the business are actually 'Atama Nirbhar' Self-Reliant. One of the prime reason for startups to fail is lack of funds? It could be a reason but may not become a reason if Regulators regulate the economy proactively. As a customer, when we ask discount from a small business, we are discounting India's Growth by that percentage. As a Business if we have deeper pockets and we are offering cash backs, we are making the economy more dependent and less 'self-reliant'. Business run the economy and government regulates it. It's not the other way. It's time we adopt a mindset of entrepreneur and think of kind of India we want to make? How would you like your India to be? Its time we build a culture of respecting product over price. Lets start small but bring more quality to our small efforts. Lets VC form an Independent Body to assure that none of their investments will be utilised for cashbacks, discounts or offers?