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Before we deep dive into the subscription economy or recurring revenue in India, let’s talk about subscriptions in your everyday life. From newspaper you receive each day to OTT accounts you and your family binge-watch on, and milk coupons you redeem - chances are you have at least one of these. In fact, the traditional doodhwalas or milkmen used to operate in what is now known as the ‘subscription model’. The only difference is that these were offline.
Today, the Indian consumer is spoiled with choices. From big over-the-top media services to FMCG, insurance, assistance providing apps, hospitality and reservation apps along with banking, have realized the potential of the subscription economy and have made the much-needed shift. This has completely changed the way Indians live.
While it took a little time for the subscription model to gain a foothold in India; today, the Indian e-commerce market has seen a massive upward growth trajectory. And, if this continues, India will surpass the US and become the second largest e-commerce market in the world.
According to Zuora’s latest Subscription Economy Index™, the Subscription Economy has grown more than 400% over the last 8.5 years. So, you see, the subscription model has not just survived, but thrived in India. This is why many brands are trying to take a leap and jump the model. But to be successful in this business, you have to follow three key tenets:
If you are planning to launch a subscription model, make sure your focus is on customer-centricity. By targeting the needs of the customer, you will be able to build a platform that is new, unique and offers exactly what your customers are looking for. This will help your brand build equity faster than companies that compete on price & product superiority alone.
Shift your focus from selling units to generating recurring revenues. Think about all the OTT platforms; the common thread between them all is the ability to drive customer lifetime value.
First-party data is the information you collect directly from your audience or customers. This includes - data from behaviors, actions or interests demonstrated across your websites or apps. This will help you keep a check on the consumption pattern of your consumers and allow you to make changes, if and when required.
Now, let’s take a look at the major benefits of this model:
To conclude, business transformation has become critical for companies in India. With more and more consumers becoming comfortable using digital platforms, for their safety and convenience, it is imperative brands make a jump, if they want to reach the shore safely. Besides, with recurring revenues and higher profits, you’re bound to succeed.
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