Most Indian startups get their target persona wrong.
When you ask a startup founder about their target audience, they typically reply with something like "Young folks in their thirties residing in metro cities in India".
And this kind of classification is disastrous, to say the least.
I'm currently reading "Lilliput Land" by Rama Bijapurkar, and this book has thrashed my beliefs about how our country is structured in terms of consumption.
Get this - Companies that talk about “Tier 1 consumers” being their target audience, miss one big fact - That the richest 20% of Indians are scattered across the country, with 45% of them living in rural India.
In fact, 12% of these “richest 20% of Indians” live in under-developed rural areas!
So while income is a big criteria for startups to classify their users, most companies assume that high income = urban.
And this couldn’t be further from the truth.
Let’s see two more interesting points:
- 46% of India’s surplus income comes from rural India
- India’s top 63 towns (tier 1 and 2) address only 36% of India’s overall income, and less than half of the country’s surplus income.
So what’s the point I’m trying to make here?
Two things.
One - that we need a more granular way to define our ideal target audience. Tier 1/2/3 doesn’t make sense any more, unless it’s important from a geographic POV.
And two - that there’s a lot of money to be made in rural India too!
Sure, their surplus income is lesser than urban India, but it’s definitely significant!
To think that companies like Zepto and Blinkit are present in just 12 Indian cities, now feels like they’re just scratching the surface.
I’m eager to see what lies ahead in India’s growth story..Will keep sharing the learnings from what I read over the next few days :)
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PS: Highly recommend reading this one if you’re a startup founder building a consumer business, or are just generally interested in economics :)