Sunday, October 16, 2016

Reliance Jio - Can the Magic Sustain

Longer queues are not an unusual sight in India. But standing in queue to get a mobile sim card is something crazy. For the past few weeks people of India have gone crazy about one single brand/product Relaince Jio. The Mukesh Ambani owned telco Reliance Jio Infocomm commercially rolled out its 4G services last month with free voice along with data service. New product launches are not common to any market. But then why this hysteria? Even the queue was similar to what we can see during Apple iPhone launches.

To begin with, one must analyze consumer behaviour. Consumers tend to follow their peers when it comes to purchases. Hence when my friends buy, I will also buy. Another interesting fact is that India can't evade queues. In fact it is a part of our culture. In the same India, you can see people upright in queues in front of ration shops. What is common in both the cases is that the product is subsidized. Jio understood this consumer instinct and subsequently they sold all the sim cards for free. It can also be concluded based on past experiences that if some facility is enjoyed for some period, people are inclined to use it even if it is for a charge. A serious issue is that for a subsidized product quality is never a concern and hence consumer will easily switch brand when dissatisfied.

As a brand Jio had an initial success in differentiating their brand. By relating it with ‘Digital India’ they tried to position it as the most authentic player in the market. Despite the fact that they entered late, they operate as a challenger in the market. The pricing is indeed aggressive that enables them to penetrate into the market. The customer acquisition is in faster pace now. The segmentation is largely behavioural while psychographic is also used. 

So far the play went on as per the script, but can the brand sustain its mojo?


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