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The Collection Wed, 23 Apr 25 |
Multiple stories, multiple perspectives, one theme worth your time—every week. |
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100 million.
That’s the number of “affluent” Indians the country is expected to have by 2027.
For quite a few years now, India’s startups and businesses have lavished considerable attention on wooing and milking that segment. After all, that’s where the money is. In November 2023, my colleague Praveen Gopal Krishnan broke it all down in an incisive edition of his Saturday newsletter, The Nutgraf.
…Companies have realised that trying to make money from lower-income people in India is a losing proposition. It simply won’t work.
A much better strategy, they’ve discovered, is to make money from those higher up in the pyramid.
And they’re doing it through a simple strategy—by selling them products and services that feel premium and exclusive. And in most cases, they’re doing it by creating completely new levels that didn’t exist earlier.
Praveen’s piece does a lot to explain what’s going on in multiple sectors even now. It was a prescient look at what might happen when a mad rush of companies all vie to eke more and more out of the middle and top of the pyramid.
Fortune at the top of the pyramid
Why sleeper trains, Chai Point, car sales, and Big Billion Day all point to one inescapable truth
The fact that this desire to “premiumise” has only intensified since is entirely understandable. Just this February, a Blume Ventures report estimated that nearly 90% of Indians have little to no money to spend on discretionary items.
That leaves the top 10%. And sector after sector, company after company, India’s businesses have gone after it—creating ever more premium tiers of their products and services.
But not everywhere.
The biggest battles in India’s beverages sector, for instance, are being fought for the bottom of the pyramid. And the recent entry of OG mass-market disruption specialist Reliance—spearheaded by the revived oldie brand that it acquired in 2022, Campa Cola—is only likely to dial the competition up to a ten.
In this week’s edition of The Collection, we’ve curated for you a batch of stories that explore this counter-trend—from what it means for consumers and companies to how brands are creating space for ever-smaller price tags.
Campa is Reliance’s biggest bet in the space, but it’s hardly the firm’s only one. Recently, the conglomerate also acquired the India rights to Sun Crush—a premium fruit-flavoured drink brand owned by former Sri Lankan cricketer Muttiah Muralitharan—and also “co-created” an energy drink with the cricketer called Spinner, priced at just Rs 10.
It did the same with Campa by pricing 250 ml bottles at just Rs 10, half of what beverage giants Pepsico and Coca-Cola were charging at the time. It’s a tactic that’s already paying dividends, helping Campa cross the 10% market share mark in a few Indian states, and prompting Varun Beverages—Pepsi’s largest bottler in India—to increase the volume of cola it offers by 60% in some of its products.
What are Pepsico and Coca-Cola doing to stave off this pressure? We explored that in the story below.
Pepsi’s biggest bottler is pouring more cola to fight Reliance’s Campa
Pepsi and Coca-Cola had been the undisputed kings in India's aerated-drinks market. Until Reliance-backed Campa Cola re-entered with its palm-sized bottles at half the price
Of course, it’s not just Reliance attempting to break the triumvirate of Coca-Cola, Pepsi, and Parle Agro. Lahori Zeera, a seven-year-old brand, is now taking off in north India because of its sodas flavoured with jeera (cumin), priced at Rs 10 per bottle.
How Lahori broke Coke-Pepsi-Parle’s hold on beverages
Though this jeera-flavoured drink has established itself in the north, it’s facing headwinds in other parts of the country
But Pepsico shouldn’t be complaining too much, because doubling down on the lower end of the market is exactly how it succeeded with its own star energy drink—Sting.
Launched in 2017, Sting unseated market leader Red Bull and gained a 90% market share in just six years because it decided to release a Rs 20 PET bottle for the energy drink.
To understand how Sting single-handedly upended the segment (and even ended up on a “low-sugar” list in an investor presentation despite its high-sugar content), check out these stories from 2022 and 2024.
Pepsico’s Sting and the massification of energy drinks
For a long while, energy drinks remained a niche product. Not anymore
Red Bull is the energy drink of the world. How did Pepsico make Sting the energy drink of India?
The FMCG giant's energy drink is winning over e-rickshaw drivers, school-goers, and the 18–30-year-old crowd in India. And its bottler, Varun Beverages, is the biggest beneficiary
‘Healthy’ drinks make up half of Varun Beverages’ sales. Or do they?
Especially when its superstar product, Sting, is part of the mix
That’s a wrap for this week. Please write to [email protected] with your thoughts and suggestions.
You can find this week’s entire collection below.
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Rahul leads the promotion and distribution efforts for the journalism produced by The Ken. He works at the intersection of the publication's editorial and business operations.
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