Pricing plays a vital role in building relationships between the startups and customers. The business’ goal is to get a greater profit, while customers want to get value for money services. The pricing needs to be optimized in a way that business and customers both get benefitted.
Here are the strategies shared by entrepreneurs of SaaS startups on pricing their Saas Products. Read to learn their SaaS pricing strategies.
Shayak Mazumder, Co-founder, Eunimart
Most subscription products need to be priced at a point that it doesn’t make it difficult for the users to continue using the platform. This means that SaaS pricing shouldn’t be more than 10% of the value that the user generates from the platform. So, if a user generates $1mn in GMV, their actual margins or revenues will be $150K approximately. As such, SaaS pricing cannot exceed $10K.
Robin Das, CEO of Brandintelle
Robin Das – CEO of Brandintelle
Here are certain things you could look at when it comes to pricing of your SaaS product-
Analyze your products value addition in terms of efficiency increases for your customer. This is one of the main metrics via which you can demand a certain price.
Your pricing should not only be a function of your costs, but also a function of your value contribution. A good mix of these two is what you should target for.
Study your competitors. This can be a great benchmark. Note that your competitor’s need not be other SaaS tools. They could also just be more manual ways of doing the same thing your product does in a better way.
Pramod Gummaraj, CEO, Aprecomm
We considered 3 main factors during Product pricing:
ROI (return on investment) the product generates – This comes from the market study and talking to customers and understanding how much a product like ours can save time & money and propel business expansion.
Competitive pricing – Our product was innovative in the industry and hence competition comparison was not available
Need – Whether our product is Good to Have or Must Have. We found the customers and markets where Aprecomm’s product is a must have and hence we could draw premium pricing.
Arjun Gupta, Founder, Courseplay
This is tough and it’s still very hard. For us it ultimately came down to value. We asked ourselves what customers would be willing to pay for our product and tweaked it every quarter based on customer feedback. We still revise Courseplay’s pricing each quarter for new customers and once a client is closed at a certain price point, that pricing is locked in for them.
Shreyan Gandhi – Director and Co-founder, Comket Solutions
Shreyan Gandhi – Director and Co-founder, Comket Solutions
We want tap1ce not to be a lifestyle product, not something only a niche audience can use. We’ve priced our product solely on the basis of the cost it takes to keep your links safe and encrypted. We’re only charging our consumers for the service we provide.
The SaaS products are requirement based products. However, the price bracket is curated encompassing several factors like the features, the quality of the technology, thorough market research, services required by the client, and lastly the RoI that the product offers in the end.
Understanding customers is the key to selling your product in market. Gaining an understanding about your customers’ interest in your product gives you an idea of getting success in the market. A minimum viable product (MVP) is a minimal version of a product for early customers. It helps in validating a product idea in the early stage of product development. An MVP should have enough features to be usable by early customers which can help in learning about customers and the market.
Here are insights shared by entrepreneurs on how to decide the features for MVP to get to the market fast.
Shayak Mazumder, Co-founder, Eunimart
Shayak Mazumder, Co-founder, Eunimart
Studying the customer profile will tell us the intersection between what are the biggest problems, the most in-demand solutions, and our USP. This intersection set is the prioritized list of features needed to go to market early.
Robin Das, CEO of Brandintelle
Robin Das – CEO of Brandintelle
Here are certain ways you can decide what to keep in MVP-
Groom your backlog using good product prioritisation techniques.
Make sure your do not spend too much time in building complex features and focus more on quick releases.
Pramod Gummaraj, CEO, Aprecomm
Pramod Gummaraj – CEO, Aprecomm
Aprecomm is solving everyday problem faced by the general Internet customers. Domain Expertise and firsthand experiences faced by our teams helped us to select the MVP. As technologists, we tend to focus on overly sophisticated features and think that would be the key differentiating factor, but they may not be the need of the hour to the customer. This is where we must think very differently. Reach out to customers and talk to them. Mostly, it would be 3 out of 10 features that you have planned that are what the customers’ needs. At Aprecomm, we have focussed on these features as our MVP to hit the markets faster.
Arjun Gupta, Founder, Courseplay
Arjun Gupta, Founder, Courseplay
This brings me back to my first answer – talk to your customers. They will tell you which features are nice-to-have and which features are must-haves. Cut out all the nice-to-haves (and half of the must-haves) and you’ve got yourself an MVP. When we first launched Courseplay we only had the bare minimum learning features on the web. Our employee experience suite for coaching, mentorship, individual development plans, behavioral scorecards, mobile apps, chatbots all came later on. You will be surprised by how little you need to launch the MVP. Stay minimal and stay agile.
Shreyan Gandhi – Director and Co-founder, Comket Solutions
Shreyan Gandhi – Director and Co-founder, Comket Solutions
Because building the software product is always an ongoing process, it makes sense to start with features available at the moment. We’ve adapted the same philosophy in our release timelines. Currently the card allows you to share all sorts of links, but other integrations such as loyalty reward points, multi-brand store to redeem points and other products are to be launched in the 2nd phase. The iOS and android applications too have been scheduled in phase 2 since, our web based platform allows for a dynamic experience without them.
The features which are of utmost necessity to launch the product and get the execution in the process are the ones to keep in MVP. The refinement and addition of features and the evolution of the product is a never-ending process. And if we plan on launching the product only once all the features are live, then the product will never be launched at the right time to capture the market.
Attracting and gaining customers and making them loyal to our brand so that they remain our customers- is the greatest goal of any business. Loyal customers are more profitable for business. They provide positive feedback and help in marketing your brand. Through loyal customers, businesses can gain new customers through referrals. So, increasing customer retention rate becomes fundamental for all businesses.
Some of the entrepreneurs from SaaS industry shared their point of view on increasing customer retention rate. Read to get insights on increasing customer retention rate for saas startups.
Here are certain things you could do to increase customer retention rate-
Invest in research and build the product experience best suited for your target audience. If your audience is CXO’s or millennials, the entire experience from no of clicks to the colour themes matter more than you can imagine.
Hear from your customer. Build continuous feedback channels via chats, NPS surveys and user interviews and let your customers speak.
Be clear on your products core value proposition (CVP). If the CVP resonates with the customer then the likelihood of the retention is high.
Each customer is unique. As Aprecomm is a B2B Player, Account based Strategy has produced incredibly superior results. Engage your Customer Support Team and Post Sales Teams to have regular interaction with the customers. Try to get some testimonials and feedback from the customers at regular intervals. This feedback should drive part of your product innovation and requirements. Aprecomm believes in delivering high quality products and have built a strong customer support team to enable high customer retention.
Arjun Gupta, Founder, Courseplay
Arjun Gupta – Founder, Courseplay
Identify your core metric and protect it at all costs. As a B2B SaaS platform, the adoption rate, i.e. the percentage of the number of users online in the month against the total user count, is the single most important number for Courseplay and we are in a battle of life and death trying to get it to 100%. This metric is the single biggest factor to decide if the customer is going to come back or not. There will be other factors also, but since you asked for only one tip, if users are using the platform, the client will not be able to point any fingers at you. So find ways to get users to log in every day to keep reaping those sweet B2B SaaS bucks.
Shreyan Gandhi – Director and Co-founder, Comket Solutions
Shreyan Gandhi – Director and Co-founder, Comket Solutions
The most effective way that works for us is constant innovation, we’ve found that providing them with additional services results in a high retention rate, because then the consumer gets something they weren’t expecting and they also have something to look forward to. Along with our Tap1ce card we provide our consumers with sharable QR codes&Links that will enable them to share their profiles over long distances. They can also use our QR generator to generate QR codes for other links as well. And we’re going to keep adding features that will help us achieve a greater retention rate.
Customer retention relies on two very important factors which include:-
The quality of the product/service you are offering.
The relationship you maintain with them.
In the absence of either of the two, customer retention becomes a big challenge. The product/service relies on the hand of the development team. But if the product is good and still the client isn’t retained then it could be due to a communication gap, which is a grave issue. In which case, it is imperative to have a strong communication channel in place that covers all their queries 24×7, collects their timely feedback and improves upon them. These two when sustained would help maintain a healthy relationship with the clients and boost the customer retention rate.
Designing a website for your business and creating an appealing & attractive online presence can bring you numerous website visitors, who are your potential clients. Converting those potential customers into loyal paying customers needs a proper strategy. A visitor takes micro-moments on your website to decide upon your brand, capturing those moments strategically can create sales for your business. A good conversion strategy helps you boost your business exponentially.
Here are some tips shared by entrepreneurs from SaaS industry, about how to convert more leads into sales
Shayak Mazumder, Co-founder, Eunimart
Identifying the ICP (ideal customer profile) and buyer personas lead to very pointed GTM (go-to-market) strategies. In our case, we studied the market and realized the exact definition of our customers and what kind of roles in those companies were driving the sales. Based on that, we defined the biggest problem statements they had, the solutions they needed, and our competitive edge. This customized approach led to clarity among the end-users. This led to targeted messaging per customer. This is the secret sauce to converting more leads.
Robin Das, CEO of Brandintelle
Here are certain things you could do convert more leads-
Define your ICP or ideal customer profile.
Make sure your MVP is best suited for your ICP including all your marketing communications and positioning.
Pramod Gummaraj, CEO, Aprecomm
Always understands the customer and his pain points. Do not rush to sell something to the customers without understanding them. Understand their problems and the priority of those, their budget constraints, and then try to see if there is something our product can solve. Be flexible with product features to appeal to the customers.
Stay in touch! I tell this to my sales team at Courseplay all the time. The easiest thing to avoid if you have reached out to the customer at the wrong time is that you forget about them and, even worse, they forget about you. Regular follow-ups and connecting with different people at different levels of the organization would help ensure you are there when they need you.
Shreyan Gandhi – Director and Co-founder, Comket Solutions
Shreyan Gandhi – Director and Co-founder, Comket Solutions
Based on the product we’ve built, the best approach to conversions are demonstrations. Being a product that has a ‘wow’ factor that sells itself, we only have to make sure demos happen frequently and through all channels possible.
If the lead gets qualified, i.e. the person is interested in taking your products/services, then the one tip to convert that lead into sales is rigorous follow-up. The consumer memory is very weak and fickle. If we do not approach them on time and take regular follow-ups, they tend to forget their enquiries as well as get dicey about the need of the same. Also, in a competitive market like today’s the one who approaches first and repetitively, is the one who gets the conversion. Thus the tip is “timely communication”
Every business wants to get a diverse range of growth opportunities. Expanding overseas and seeking international growth is always a temptation for businesses. Ambitious entrepreneurs are always keen to grow globally. International expansion is a huge opportunity for SaaS businesses. Thus, getting foreign clients becomes the need of businesses for this important stage of business growth.
Here are insights shared by entrepreneurs in SaaS business on how they grabbed their foreign clients. Read to know more.
Shayak Mazumder, Co-founder, Eunimart
Most people would advise performance marketing to break into foreign markets. I believe that going for a catch-all GTM model is a sure-shot recipe for disaster. What’s important is to identify the type of users who will find value in the platform. In our case, we realized that our users are b2b businesses, and this is a very concentrated cohort. Performance marketing would mean 92% junk leads. As such, we opted for a mix of content, product-led growth, and channel partnerships. These channels have proved to be extremely effective for us and have led to our growth exponentially.
Robin Das, CEO of Brandintelle
Robin Das – CEO of Brandintelle
Here are certain things you should try to grab foreign clients
Aprecomm products are B2B. Our target customers are Wi-Fi OEMs (original equipment manufacturers) and Internet Service Providers. Conferences like Wi-Fi Now and WBA were extremely useful to grab the attention of Wi-Fi OEMs and ISPs (Internet Service Providers). Press Releases using these channels are also quite effective. And there is no better marketing tool than Word of Mouth Marketing. The CXO of the Business we work with highly appreciated our product and they have in turn helped us to gain more customers.
Arjun Gupta, Founder, Courseplay
Word of mouth worked the best for us at Courseplay. We would ask our existing clients if they could refer any business to us and that worked the best to close international clients while we were a much smaller company.
Shreyan Gandhi – Director and Co-founder, Comket Solutions
Shreyan Gandhi – Director and Co-founder, Comket Solutions
To be honest, there isn’t one single channel that has performed the best, it was a culmination of efforts on various platforms that enabled us to expand to foreign clients. We used the LinkedIn search feature to look for prospects. Twitter & Quora are other platforms that helped us. Attending international webinars. Like I said there was no one channel that worked best.
We all know the most in-demand actor in the 80s to till now in Hollywood is Brad Pitt. He has been one of the recipients of multiple accolades such as the Primetime Emmy Award, Golden Global Awards and an Oscar winner for his great acting in “Once upon a time in Hollywood”.
Brad Pitt began his career back in 1987 as an intruded character and acknowledged his adroit as a cowboy hitchhiker- in the middle of the road in the flick “Thelma & Louise” as a supporting role.
Till 1991, he didn’t make that much money or fame to be remembered by the people but, serendipity occurred in his life, after becoming the lead male in the flick “Legends of the fall” as Tristan Ludlow, where he got nominated as the Best Actor category in Golden Globe Awards for the very first time. After that, he has gained international recognition by starring as a detective in the movie “Seven”.
Apart from being an actor in Hollywood, he also took part in various public events, campaigns and charitable works. That’s where he was persistent in his career and ultimately became a heartthrob in Hollywood.
He began to cast in various films along with endorsing in multiple brands such as Chanel, SoftBank, TAG Heuer, Honda etc. Just being a part of those brands, augmented the sales turnover in such brands because of Brad Pitt in it.
Brands that are Endorsed by the renowned International actor William Bradley Pitt:
Cadillac is a division of Henry Ford Company American-based premium opulent automobile manufacturer company, known for luxury carmakers. This company owns more than 34 auxiliary markets worldwide and sold 390458 vehicles as of 2019.
Cadillac operates in the United States, Mexico, Europe, the Middle East, South Korea, Japan, China and Canada. Besides, the company is among the first automotive brands in the world that tout luxury vehicles. The company has built 18 models of ostentatious cars till now such as Escalade, XT5, CT4, CT5, Cadillac CT6, etc.
In 2013, Brad Pitt partnered with Cadillac in marketing its new launch Chinese Cadillac XTS, which ramped 50% sales. He cast in an advertisement, that shows- he gets into the car and, meanwhile flexing its features and specification. He drives the car in a smooth way against a euphoric soundtrack in the background. And the Ad ends with a tagline “We don’t predict the future, we create it! Bringing the Future Forward”
Chanel
As you see, every celebrity sees Chanel as the Fashion paragon. Chanel is a fashion empire that vends Accessories, Clothes, Beauty- Skincare, eyewear, Fragrance, fine watches and high Jewellery. And of course, Chanel designs its products for celebrities that are unique as well as costs an arm and a leg to acquire. But people were enthralled to spend their very hardworking penny on the products of Chanel when Brad Pitt endorsed it.
He was advertised as the first new male face for the Chanel No 5 women perfume. On the other hand, this ad. Brad Pitt for Chanel No.5 perplexed watchers as ‘Brad standing all alone and people are inscrutable to analyze what Brad is thinking. And the ad is Brad was talking about a woman, but he talks about the redolent. Besides endorsing this Brand, people started to castigate Brad’s acting and ultimately became a flop.
Edwin Jeans is a Japanese company, which is known for its clothing denim brand, Brad Pitt made his endorsement in a Japanese ad on Edwin jeans. Basically, the advertisement tells us about ‘Brad Pitt driving a vintage car too fast, hanging the gear and nailed it. Later, he gets out of the car and walks towards the camera and pretentiously shows off his jeans 503 brands.
On the other hand, he also endorsed in another hand, where Brad simply sat on a campfire and dared the camera. So, this ad of Brad Pitt in Edwin Jeans marketing the product talks about the audacious and thrilling experience a person can have when they wear Edwin Jeans 503.
Honda Integra
Brad Pitt is quite popular in Japan because he has endorsed brands from many Japanese companies. He signed off the offer in 1996 and became the Integra spokesperson of Honda.
The advertisement is about Brad wearing a Honda Integra car printed picture on his shirt, whereas a kid approaches him and tries to scare Brad. But here, we see Brad was wearing a T-shirt Honda Integra scares even more and finishes off the ad with a tagline “Integra, Nottegra, HONDA!!”.
This advertisement of Heineken hyped the sales turnover in the year Super Bowl 2005 commercial. Brad Pitt was swamped with his work and went straight to an empty refrigerator in his apartment to have a drink, whereas, on the other side of his huge apartment, paparazzi were all around- busy in capturing very movements of his.
So, he gets dressed, smoothly on his way to buy Heineken drinks from a departmental store, while the paparazzi ferreting him, and gets back to his apartment. Then, he phoned his friend, and said: “Can you pick me up?”. Brad Pitt did this endorsement after gaining a huge fan base. As a result, this endorsement of Brad Pitt in Heineken accelerated the sales thrice than the average sales.
SoftBank
Brad Pitt once again endorsed it in a Japanese ad. Regarding the cell phone company SoftBank. The commercial was pretty quip and well filmed, where he helps out everyone from eating croissants while talking to someone on the phone. As well, aiding a vehicle to start over, although carrying his cell phone in one hand.
Brad Pitt one of the finest endorsements is TAG Heuer, he wears a TAG Heuer Monaco with a blue dial and black strap in his promotional poster. This brand TAG Heuer is cast by many famous celebrities such as Uma Thurman, Shah Rukh Khan, Sushmita Sen, Leonardo DiCaprio and so on. The brand accomplished its heyday in 2006 after Brad Pitt addressed the new launch TAG Heuer Monaco in a promotional poster.
Brioni
Brioni is an Italian brand for luxury menswear. The brand house was founded in the year 1945 by Gaetano Savini and Nazareno Fonticoli. They specialize in handmade suits, apart from that, perfume, eyewear, shoes and everything fashionable are also in great demand. Recently, the CEO of Brioni is Mehdi Benabadji. Brioni roped in Brad Pitt as their brand ambassador in 2020. With his timeless charm, Brad Pitt is considered the perfect face for the Italian luxury brand. The summer and winter collection of 2021 featuring Brad Pitt was a great success.
De’Longhi
De’Longhi is one of the most popular brands that produce home appliances, the company was founded in the year 1902 by Giuseppe De’Longhi. The company is also famous for making coffee makers. De’Longhi created history by collaborating with a celebrity for the very first time in 2021. They made Brad Pitt, the Global star their official brand ambassador in 2021.
FAQs
What is the net worth of Brad Pitt?
The net worth of Brad Pitt is $300 Million.
What is Brad Pitts’s real name?
Brad Pitts’s real name is William Bradley Pitt.
What was Brad Pitt’s first movie?
The first movie of Brad Pitt was No Way Out in 1987.
While starting a business, a creator’s main focus is to develop a product for the consumers, when the main deed is done, another significant step comes up, which is to launch that product in front of your audience. Every creator has the dream of launching their product with huge pomp and show, in a way that will be able to gain the attention of their audience. For this, the prototype has taken shape; the long time spent in the R&D phase has borne fruit, but the major task is till and that is preparing for the product launch.
The big day is a make-or-break situation; propagating the right message could do wonders and the opposite can reduce an ingenious invention to shambles. To help with such kinds of scenarios, it’s essential to have a well-crafted, effective product launch marketing plan. In this article, we will talk about the marketing strategies that can be used while launching the new product of your business.
A business will only survive when the marketing is done correctly, it becomes more important while launching a product. A product launch has to be done right so that it can attract the attention of the audience. Below are some marketing strategies that one can follow, while a product launch.
SEO Should Be Perfect
As it says, ‘what’s best should be at the top’. The relevancy of the quote matters in the launching of your product in the market, as the product should have visibility when it comes to search engines. Aim for the first page when someone types the product’s name.
After all, it’s a well-known fact that users rarely go through the search results starting from the third page because no one has time to ponder over things. We search, and we click that first option, right away, so use the keywords that can convey the intended information concisely and something for the audience to remember, the website layout counts as well.
Make sure that the first few lines of the website pack the punch because sites like Google tend to ignore meta-descriptions when listing the website in the search results. For the purpose, you can use a trained SEO specialist.
Invite Some Spokespersons
Remember seeing your favourite celebrity talking about a specific product and how it has changed their lives? This is the old yet useful trick up on the sleeves by business professionals, that is hiring a spokesperson for their product who will talk to the audience directly and will promote the brand. This spokesperson has to be famous and influential enough to grab the attention of your potential customers.
Interacting with the media and industry specialists can tilt the results in the product owner’s favour. And that’s what spokespeople are best at. Hire the right person for the job, those who can relay the necessary information as and when required while maintaining the recommended standard. CEOs are the driving force behind this workforce so no compromise when it comes to choosing executives and industry experts. Also, you can invite some celebrities to your product launch.
Build a Database
Setting aside the target audience, the management behind the product launch should have a list of media persons, influencers and reporters, after careful analysis and comparison to ensure the message reaches the target audience and the market. The more it’s promoted and shared, the more it reaches the audience.
Identify the Target Audience
Attracting new customers to buy a product is just like an impossible wish coming true. There are two ways of marketing, one is you can launch an ad campaign without identifying your target and hoping for the best. Another is, you have to put time and effort to research your target audience. You can also use social media to engage with different communities where you can get to know about the current market demand.
So, it’s imperative to identify the product’s target audience to reach them with the right strategy. Also, once you launch the product, not everyone would have the ‘I’m going to buy it, immediately’ mindset. So, there’s a high chance that remarketing may be required, depending on the mental phase that the customer’s undergoing.
Share and Let Others Share
Word of mouth publicity has been there for ages and shall continue to be so but the medium has surely become modern. Ensure that the content about the product is shareable, through mediums such as Facebook, Twitter, and other social media platforms. This brings in a new audience that may not have been a part of your checklist earlier. Use social media as the new hotshot for amazing marketing.
Prepare Your FAQs
At the product release conference, not being bombarded by questions from inquisitive souls is a no-brainer. Prepare the FAQs well in advance, covering a range of possible questions that may arise. A few would be genuine while others would be sole to undermine the product. Be equipped to face them boldly and without any fear.
Customer Service Efficiency
The term ’24 hours, seven days a week’ exists for a reason: customers are relentless. They would go to any lengths to have their queries and complaints resolved. So, having a customer service cell, adequate in both quality and quantity, is more than a plus point; they are a necessity and the backbone that supports the product’s life-cycle after its launch. Also, make sure that you are not only listening to the problem but also doing your best to solve them, to satisfy your customers.
Prepare Creative Video Graphics
Visualizations play a major role in leaving a positive impression on the customer’s mind. Moreover, they help in making a unique identity for the product, just like a brand logo. For example, if one shows you the image of a tick mark, it takes less than a minute to guess the brand’s name. To build such kind of presence, the graphics have to be done using the best resources available to create a stunner.
A great video describing all the qualities of the product will straight up hit the people in their brain rather than some long slides show. So, do create an innovative, interesting and if possible funny video to engage your customers. You can either hire a freelancer to get this work done or you can also use tools to create it on your own.
Improve Your Website Speed
It is not only irritating but also unprofessional if your website takes a lot of time to load. A sharp and good website helps in building a better user experience which in return will create the image of your product as well as your business. Hire experts if you can who will use their coding knowledge to fix and improve your website.
Write a Great Press Release
We all know the press can make or break any deal. So, don’t hesitate to write an epic press release. The document should encompass the what, why, when, where and how’s of the product. Start with the most important details, followed by the descriptions and extended details. Share it with journalists, post it on social media and take the assistance of bloggers. Another tip is to get in touch with bloggers, make a repertoire of relevant blogs that can aid in marketing and publicity.
Don’t Forget to Add Discounts and Freebies
We all love when there’s something extra that we get as an offer at no additional cost. Offer freebies with the product, create special discounts exclusive to those who attend the launch day. This is much more than a marketing plan, it helps build that niche following that stays with the product’s life through thick and thin.
Indulge in Email Marketing
One of the professional ways to market your product is through Email Marketing. Create a proper Email list with the help of Email management tools and create a personalised message and convey to them what your product is all about.
Set Ambitious Goals
Moments like this don’t come often; aim big and work hard to achieve it. Be mentally prepared for the launch day, build the required hype and then leave things to unfurl naturally. Too much meddling for the sake of perfection can have undesired consequences. Make sure your presentations are great, you are filled with confidence and everything is on board. Then, you will have the perfect launch of your product, the way you want it to and the way you dream about it.
Conclusion
The launch of a new product has to be done carefully, the success of the product depends on it. Once you gain the attention of your potential customers through the launch of your product, it will be a step toward the success of the product.
FAQs
What are the 4 Ps of marketing?
The 4 Ps of marketing are, place, price , product and promotion.
What is product launch strategy?
A product launch strategy is a planning that is made to deliver a new product in front of audience
What makes a product launch successful?
The product launch can only be successful, if you are able to identify the right market, right way of marketing the product and at right time.
ABG Shipyard has been making news in recent days. The scam by this shipbuilding business has not only placed the Narendra Modi administration under scrutiny but has also thrown the opposition and the Modi government into a political fight. The ABG Shipyard Limited, a Gujarat-based shipbuilding enterprise, was accused of defrauding a consortium of 28 banks, including the State Bank of India (SBI), IDBI, and ICICI, for Rs 22,800 crores.
Without a doubt, ABG Shipyard is the largest private shipyard in India. The organisation has a large client base around the globe. They are the first to create all-aluminium jet-propelled watercraft that are powered by diesel-electric dynamic ships.
The company’s registered office and yard are both located in Surat, Gujarat. The company’s first ship was delivered in the year 1990. In the 15 years after its inception in 1991, the firm has grown to become India’s largest private sector shipbuilding yard, with a global client base of happy clients.
AGB Shipyard Fraud: How Did the Fraud Come to Light?
Based on a complaint from the State Bank of India, the Enforcement Directorate filed a money-laundering investigation against Gujarat-based ABG Shipyard, which has been described as being implicated in “India’s biggest bank scam in history.” The company’s chairman, Rishi Kamlesh Agarwal, has been questioned by the CBI for defaulting on loans of Rs 22,842 crore that ABG Shipyard obtained from 28 banks.
According to the CBI, a forensic audit conducted by Ernst & Young in 2019 indicated that funds were diverted to other linked firms, with loans reportedly being utilised for investments through offshore subsidiaries. According to the examining agency, these loans were not utilised for the intended purpose, thereby breaking the agreements.
AGB Shipyard Fraud: Actions Taken by SBI Against the company
On November 8, 2019, the SBI filed a complaint on a very serious note in order to get strong clarifications, and on March 12, 2020, the SBI requested explanations too. In August of that year, the bank filed a new case. The CBI moved on the complaint after “scrutinising” it for over a year and a half, registering the FIR on February 7 this year.
The SBI said in its lawsuit that the problem was caused by the global economic slump and the shipbuilding sector, according to the news agency Press Trust of India. It had “affected the shipping sector as a result of a drop in commodities demand and prices, as well as a drop in cargo demand.”
AGB Shipyard Fraud: Banks Involved in the Case
According to a case filed by the State Bank of India, AGB Shipyard owes the bank 2,925 crores, ICICI Bank 7,089 crore, IDBI Bank 3,634 crore, Bank of Baroda 1,614 crore, Punjab National Bank (PNB) 1,244 crore, and Indian Overseas Bank 1,228 crore (IOB).
According to CBI, the funds were utilised for reasons other than those for which they were given by banks. The Enforcement Directorate (ED) has opened a second money laundering inquiry into them.
AGB Shipyard Fraud: Why Is It Considered As India’s Biggest Bank Fraud?
Previous diamond merchant Nirav Modi and his uncle Mehul Choksi’s scams totalled about Rs 14,000 crore, while Vijay Mallya’s fraud was Rs 9,900 crore. The case of AGB Shipyard has crossed amounts of all the previous scams in history.
Former Chairman and MD of ABG Shipyard Limited Rishi Kamlesh Agarwal, former executive director Santhanam Muthaswamy, and directors Ashwini Kumar, Sushil Kumar Agarwal, and Ravi Vimal Nevatia have all been charged by the investigating agency and the officials. Meanwhile, searches have been carried out in 13 ABG Shipyard facilities.
ABG Shipyard is the subject of a forensic audit that was organised and conducted by Ernst & Young LLP. Between April 2012 and July 2017, it uncovers evidence of fraud. According to the audit, fraud was committed through “finances diversion, theft, and criminal breach of trust, with the goal of gaining unlawfully at the expense of the bank’s funds.”
ABG Shipyard received loans from 28 institutions in the form of three distinct types of loans. The funds generated from these loans were subsequently funnelled through 98 sister concern firms for mostly personal benefit.
AGB Shipyard Fraud: Timeline of the events
1985: The ABG Group’s flagship enterprise, ABG Shipyard Ltd, was founded. It was run and operated by Rishi Kamlesh Agarwal and is in the shipbuilding and repair industry, with shipyards in Gujarat’s Dahesh and Surat cities. It is financed by a consortium of 28 banks, with ICICI being the principal bank.
2005-2008: Despite warnings of danger from the global financial crisis of 2008, banks continue to lend grandly to ABG Shipyards.
2008: The worldwide financial crisis, which was sparked by the housing bubble in the United States and the fall of Lehman Brothers, affected ABG Shipyards.
2014: Under corporate debt restructuring, or CDR, SBI tries to restructure debts to ABG Shipyard. The reorganisation failed terribly because ABG Shipyards was unable to pay the interest and instalments on time and with parity.
2019: SBI identified the fraud in January 2019.
2020: SBI filed a complaint in 2019 and then again a detailed complaint in 2020.
2022: ABG Shipyard and ABG International Private Ltd are both booked by CBI. According to the CBI’s FIR, ABG SL owes a total of Rs 22,842 crore.
The CBI has issued lookout notices for Rishi Agarwal, ABG executives Santhanam Muthuswamy and Ashwini Kumar, and founder Rishi Agarwal.
Meanwhile, the opposition, led by the Congress party, had accused the Narendra Modi administration of participating in “India’s biggest bank fraud” of Rs 22,842 crore, which is larger than Nirav Modi and Mehul Choksi’s PNB scandal of Rs 14,000 crore and breaks the history of scams. The BJP government at the Centre pointed out that the fraud occurred during the UPA administration, the Congress retaliated by questioning why it took the CBI and SBI nearly seven years to find the crime. Along with that, the banks are in a terrible position of attempting to recoup their losses.
FAQ
What happened to ABG Shipyard?
The CBI has filed a complaint against ABG Shipyard for cheating 28 banks of Rs 22,482 crores.
Who is the owner of ABG Shipyard?
Rishi Kamlesh Agarwal is the owner and chairman of ABG Shipyard.
The unified payments interface is the buzzword for the pandemic year. Ever since the pandemic hit, people became scared of touching any surface in the world. This was the time when the UPI came to the rescue. UPI or the unified payments interface is a method or gateway that is capable of transferring money from one bank to the other. This is a life saviour in a country like India. We are a country of more than a billion people and everyone has to do certain basic transactions everyday.
With so many transactions happening all over the country, it becomes hard and inconvenient. UPI eases just that thing. It lets you pay directly from your bank and you don’t have to carry notes and currency of small denominations and even larger denominations. In all its sense, UPI was a game-changer in India. It is fast, safe, easy and convenient.
There was however some issue over the UPI case in India. You cannot transfer money outside the borders of India. For that, you will have to follow some other method of transaction. In recent news, it was announced that Nepal (India’s neighbour) will accept the UPI payments from India. In fact, it will be the first country that will adopt the UPI system that India has inbuilt in itself. This step will be playing a pivotal role in transforming digital work all over the place, in India and as well as in Nepal. It was officially announced by the NPCI on Thursday, last week.
NPCI stands for National payments corporation of India. Here we will be discussing Nepal, which is India’s friend and all in all aspects. In this article, we will also discuss what will be the after-effects of this news. How will the fintech startups change, will this be a better move for them or will the move give them a hard time. Let us see first how the UPI works, and why it is so widely used.
A Small Brief About the Unified Payments Interface
We have invented so much, achieved so much and we are still in the process of innovating and adding value to the world. However, any amount of technology in the world is of no use, if it cannot ease the life of humans. Because what’s the matter if tech is useless? When the population rises to a great extent, something has to be invented which will work efficiently in managing human affairs.
In fact, as the population of the world rises, there has to be something that holds the number of transactions happening everywhere. This is when the word digital payment came into the picture. It is a mode of payment that is made via Digital means. Real money is flown out of a payer’s bank and is credited to the receiver’s bank. This is also a fast, easy and secure method to transact.
In a country like India, where the population bubble is so huge, it becomes crucial to innovate in the medium of transactions. This is when the word UPI comes to place. There is a strong possibility that someone has not heard of this word beforehand.
UPI or Unified Payment Interface is a digital payments service that costs nothing to the payer and receiver but makes it easy for both parties. It is a payments service and as the name suggests, it is a pathway through which money can be transferred to anyone in India.
It is the most accepted digital payments method. Since the demonetisation and the covid 19 pandemic, the use cases of UPI has also risen many folds. Which makes it the perfect go-to pathway for any sort of transaction.
It is developed by NPCI, which stands for National Payments Corporation of India. It is safe and secure as it is regulated by the Reserve Bank of India. RBI is the Apex bank in India, which is also the central bank of India. It regulates and secures every UPI transaction happening in the country. It is secure in this manner.
Another thing is that UPI is simple and convenient. All it takes is a mobile number and a bank account. It connects with your email id which is used to make a VPA ID. VPA is a virtual payments address.
As the name suggests, it is the online address to which payments are directed or payments are taken. VPA is something that directs the payment/transaction path. Transfers can be inter-bank and they can also be intra-bank. A mobile number also works seamlessly in the UPI payment system, if it is attached/linked with the bank account of the sender or receiver.
There are many benefits for a service like the UPI. But however, there is one limit to a UPI transaction. You cannot do a UPI payment across borders as it is only available in India. In recent news, something striking happened. It was reported that Nepal will be accepting the UPI structure of India. It is such a great welcoming move by which people can transact even in Nepal from a UPI enabled app. Let us see what is the news and what will be its implications.
India Nepal UPI Collaboration
In recent news, it was announced that Nepal will be accepting UPI which is a great initiative for development in both the countries, India and Nepal. In fact, it will become the first country to do this. The country said that they want to adopt India’s payment gateway for growing together.
NCPI has also given a nod to this agreement. Its foreign wing has joined hands with another technology entity to provide services in Nepal. The work of providing the infrastructure for this facility will begin soon in time.
NPCI International, Gateway Payment Service, and Manam Infotech, all three trifectas have come together and joined hands to deploy UPI solutions in Nepal. NPCI International Payments Ltd (NIPL) is all set to Enable NPCI’s flagship Unified Payments Interface(UPI) platform in Nepal.
This partnership or collaboration will enable many developments, like the creation of a real-time payments system in Nepal, leveraging NPCI’s top of the line or state of the art technology to democratise payments and displace cash
NCPI has come together and joined hands with GPS and Manam Infotech to provide services relating to the Unified Payments Interface to the country of Nepal. GPS here stands for Gateway Payments Services and Manam is a famous tech company on the land of Nepal. It has been clearly stated that GPS or Gateway payment service will be responsible for acting as a system operator for payments in Nepal.
Manam infotech will add the Unified Payments Interface to the whole country. It is a divided work and with the joint efforts of the respected bodies, this work will be done in an effective manner.
The collaboration will also make for the larger digital public good in Nepal. This effort on both ends will improve real-time person-to-person which is called P2P and person-to-merchant which is P2M transactions in the neighbouring country, NPCI said in a statement.
There have been rising sentiments of all the people who see UPI as a great initiative in a digital world. With Nepal joining hands with India, this will boost the usage of UPI and it will also promote the digital economy which everyone today strives to become. Moreover, this broad use of UPI will also bring these two countries together in the same sphere of payments.
As merchants and consumers from both countries will get benefits from this collaboration. Payments can be received and accepted from both countries which will make trade and communication easier on both ends of the locations.
With collaboration with Nepal, we can achieve a greater goal of merging the two economies, not exactly but the magnitude will rise in both places. As the collaboration will start working, it will also be seen that person to person and person to merchant transactions will also improve the number of countries. National payments corporation of India and investors and merchants are all looking forward to all the doors of opportunities that will be open after this collaboration on UPI.
National payments corporation and NIPL (International payments limited) which is its foreign wing, was incorporated in April 2020. The NIPL is a wholly-owned subsidiary of the national payments corporation of India. The sole purpose of NPCI is to regulate all the UPI payments in India.
Everything that is related to the Unified payment interface in India is to be managed by this entity. The foreign department of NPCI is known as NIPL and operates in connecting UPI outside Indian borders. The purpose of NIPL is to employ a payment system that is real-time, with the international markets. It has also the work of card schemes and RuPay which works outside Indian borders.
NPCI or the national payments corporation of India has developed and proved its capabilities in the past. It is the organisation that has the majority stakes in working overtime with the UPI in India.
The widespread usage of the Unified payments interface would not be possible, had it not been with the NPCI. Thus, this body has been the worthy organisation to regulate and promote UPI in Indian markets. The international wing of NPCI has also done immense work in its designated part. NIPL is focused on transforming payments across the globe with the use of technology and innovation
Nepal has a population of about 30 million (3 crore) with around 45 per cent banked. Mobile penetration of over 135 per cent with 65 percent of the population using smartphones provides a bedrock for seamless replication of the digital revolution in India to be replicated in Nepal, NPCI said.
NPCI International, Gateway Payment Service, and Manam Infotech. The trifecta has come to deploy UPI solutions in Nepal. This partnership or collaboration will enable many consequences, like the creation of a real-time payments system in Nepal, leveraging NPCI’s top of the line or state of the art technology to democratise payments and displace cash. NPCI International Payments Ltd (NIPL) is all set to Enable NPCI’s flagship Unified Payments Interface(UPI) platform in Nepal.
Conversely, several countries want to establish a ‘real-time payment system’ or ‘domestic card scheme’ in their own country. NIPL, with its knowledge and experience, can offer these countries technological assistance through licensing, consulting for building real-time payment systems to meet the rapidly evolving need of fast-growing global businesses. It will not only enable payment for Indians but also uplift other countries by enhancing their payment capabilities through technological assistance, consulting, and infrastructure.
As mentioned before, NPCI is the governing body when it comes to any case related to UPI. NPCI stands for National payments corporation India. In this case, when Nepal is agreeing to add UPI in their country, NPCI has to nod. To this query, it is amazing to see that NPCI has agreed to the partnership which will improve payments in both geographies. The foreign/international wing of the national payments corporation of India has cleared any issues related to the collaborations.
NIPL which is National international payments Ltd, which is the foreign department of the National payments corporation of India has joined with some organisations to provide UPI to the international market. In this case, where Nepal will become the first-ever country to get the UPI as their payments gateway, NIPL has planned everything which they will be needing.
They have joined two other entities to fulfil their mission of enabling UPI in Nepal. The two bodies are the GPS and Manam. GPS stands for gateway payments service and the other entity is Manam Infotech. Enabling the Unified Payments Interface in Nepal, which is not an easy task, requires a lot of work and efficiency. These two entities with which the NIPL has collaborated, are well versed with the world of UPI and how it operates.
Gateway Payments Service will be the payment system operator in Nepal. The other company, that is Manam Infotech will be responsible for employing Unified Payments Interface in the neighbour to India.
The collaboration will serve the larger digital public good in Nepal and bolster interoperable real-time person-to-person (P2P) and person-to-merchant (P2M) transactions in the neighbouring country, NPCI said in a statement.
“Nepal shall be the first country outside of India to adopt UPI as the payments platform driving the digitalization of cash transactions and furthering the vision and objectives of the Nepal Government and Nepal Rastra Bank as the Central bank,” it said.
This collaboration will enable the last-mile consumers in Nepal to reap the benefits of an open interoperable payments system driving immediate payment transfers between bank accounts and merchant payments in real-time.
Among all the news of Nepal accepting Unified payment interface as their go-to transacting pathway, one entity is in charge of the settings. You guessed it right, it is Manam Infotech private limited.
Manam infotech will be the responsible body for enabling UPI technology and operations in India. It will work very closely and parallel to the GPS. GPS or Gateway payments service is the service that is entrusted with the responsibility of maintaining the pathway.
Nepal shall be the first country outside of India to adopt UPI as the payments platform driving the digitalisation of cash transactions and furthering the vision and objectives of the Nepal Government and Nepal Rastra Bank as the Central bank.
“Manam has always been part of major digital transformation across the various regions of the world, we believe this partnership will eliminate all the barriers of payment transformation within Nepal and across the border thereby transforming the regional economy,” Naga Babu Ramineni, Director of Manam said.
Manam Infotech Private Limited is a very repeated name in the article and it is worthy to be named many times. Manam Infotech is a Fintech (Finance plus technology) company based out of Bangalore, India.
Manam Infotech is the fintech arm for many leading banks across various regions. The regions in which Manam infotech works fabulously includes Asia, Africa and the Middle East. The company stands tall with over a decade of experience in digital wallets, payments, and all the omnipresent banking and digital lending. Manam Infotech has also been a part of transforming the traditional banks to digital-first banks, which was the primary focus of the government for a long time now.
What is the Gateway Payment Service (GPS)?
Another name that we have repeated in this article is GPS or the gateway payment service. GPS is a payment system operator with expertise in all the works relating to payment services and operators. It is to its core a PSO or a payment system operator.
It is licensed by NRB, which stands for Nepal Rastra Bank, which is the apex bank in the country (Central Bank of Nepal). It has been allowed a PSO licence which enables the entity to work and operate in all sorts of payment and transaction settlement-related technology.
GPS has all the rights that include all that of payment gateway, domestic and international gateway, with UPI, that is unified payments interface in switch and in card transactions.
Benefits of UPI collaboration in Nepal
The benefits that this collaboration entails are endless. The collaboration will help people build real-time money connections with the country without having to go through the hassle of other payment methods. This UPI partnership will be real-time and it will be capable of crossing borders.
All person to person money transactions and remittances between India and Nepal will flow like water. Not just person to person transactions but all the transactions related to the merchant’s part will be carried out effectively if this collaboration gets realised.
The benefits are endless, as UPI is one of the most famous methods of payment in India. India is the second-most populous country in the world and UPI is a hit here. With all the volume of transactions that are received from here, it will benefit a lot from Nepal and it will add a good amount of transactions to Nepal too.
In 2021, UPI enabled 39 Billion financial transactions amounting to commerce worth USD 940 Billion, which is equivalent to approximately 31% of India’s GDP. UPI’s real-time payment infrastructure will help catalyse the process of financial inclusion in Nepal and will also create more opportunities for businesses. It will help modernise Nepal’s digital payment infrastructure and bring the convenience of digital payments to citizens of Nepal.
Ritesh Shukla, CEO of NIPL said, “We are delighted to join hands with GPS and Manam Infotech to facilitate the deployment of NPCI’s flagship Unified Payments Interface in Nepal. At NIPL, we are committed to transforming payments by taking our robust payments solutions to global markets and collaborating with local payment system operators. We are excited about this partnership, which will enable consumers within Nepal to transact swiftly using a state-of-the-art UPI platform and deliver a seamless user experience. We are confident that this initiative will stand as a testimony to NAPLes technological capabilities and vision of scaling our unique offerings globally.”
Naga Babu Ramineni, Director of Manam said, “Manam has always been part of major digital transformation across the various regions of the world, we believe this partnership will eliminate all the barriers of payment transformation within Nepal and across the border thereby transforming the regional economy.”
Rajesh Prasad Manandhar, CEO of GPS said, “The same UPI service has created a significant positive impact in India in terms of the country’s digital payment transformation. We expect UPI in Nepal would play a pivotal role in transforming the digital economy of the country and dreams of building a less-cash society.”
How Will UPI Be Implemented in Nepal?
The neighbouring country of India, Nepal has good population stats. Out of all the population of Nepal, about 45 percent have bank accounts. That 45 percent account for something about 30 million people. Mobile penetration in Nepal is over 135 percent.
Moreover, it is reported that 65 percent of the population uses smartphones which will provide a good base for UPI payments. Not only this, the three major companies will work towards increasing the volume of transactions.
The three companies we are mentioning here are the UPI backed service providers. It is NPCI, National payments corporations of India, GPS, Gateway payment services, and Manam Infotech. All these three companies will work together to employ all the necessary equipment to make Unified payments accessible in Nepal all over the place.
It will also enable the way forward for real-time cross-border P2P remittances between Nepal and India, NPCI said. UPI service has created a significant positive impact in India in terms of the country’s digital payment transformation, Rajesh Prasad Manandhar, CEO of GPS said.
“We expect UPI in Nepal would play a pivotal role in transforming the digital economy of the country and dreams of building a less-cash society,” he added.
In 2021, UPI enabled 3,900 crore financial transactions valuing USD 940 billion, which is equivalent to approximately 31 per cent of India’s GDP. NIPL, being an internationally focused subsidiary of NPCI, is looking to drive deep collaboration with overseas partners in the areas of UPI like deployment, cross-border remittance, acceptance, using indigenously developed technologies in digital payments.
“At NIPL, we are committed to transforming payments by taking our robust payments solutions to global markets and collaborating with local payment system operators. We are confident that this initiative will stand as a testimony to NAPLes technological capabilities and vision of scaling our unique offerings globally,” Ritesh Shukla, CEO of NIPL said in the statement.
UPI’s real-time payment infrastructure will help catalyse the process of financial inclusion in Nepal and will also create more opportunities for businesses, NPCI said.
NIPL, being an internationally focused subsidiary of NPCI, is looking to drive deep collaboration with overseas partners in the areas of UPI like deployment, cross-border remittance, acceptance, using indigenously developed technologies in digital payments, NCPI said.
All the three organisations have nodded to set up a laid out plan in this path. They will be working together in a closely-knit target and process that will enable UPI in Nepal.
The benefits, as previously mentioned are countless. There will be ease in transactions of any sort, people and merchants will be the group of people who will be the first and foremost most affected in a good sense.
In short, it is a great move and that is why the NPCI and the concerned authorities nodded directly to the proposed news. This move is looked at as a win-win for both countries.
UPI is amongst the most successful real-time payments (RTP) systems globally, providing – simplicity, safety, and security in P2P and P2M transactions in India. It is the most popular payment mechanism in India and the recent news said that Nepal will also be accepting this. This is a great move and will benefit both countries in transactions. The better the volume of transactions, the better will it indicate and benefit the growth of the country.
The benefits are endless and will help all the people across the borders who indulge in regular payments across larger boundaries of the land.
FAQs
Is UPI made in India?
Yes, the UPI platform and technology is designed in India and is regulated by RBI.
Who regulates UPI in India?
The Reserve Bank of India (RBI) regulates UPI in India.
How many UPI users are there in India?
There are around 300 million active monthly users of UPI in India.
Thinking about renovating your home? Isn’t IKEA the first name that pops up in your head when you think about shopping for furniture?
In recent times, IKEA has become the go-to option for young and old alike to shop for good quality, durable and affordable home décor pieces. ‘Affordable’ is the keyword here.
Have you ever thought, how has IKEA been able to lower the costs of its products The brand has made a niche for itself in selling high-end beds, sofas, dining sets and wardrobes at half the price of its competitors, but how does it manage the same?. Well, here’s your answer.
There are quite a few methods that IKEA follows to keep its prices low while maintaining the quality of its products. Let’s take a look at these methods.
IKEA first decides on the price range for a particular product before starting to design the same. Where almost all competitor brands go by the book and follow the conventional process of choosing a design theme, making a storyboard, procuring the materials, putting together the design and then pricing the item according to the cost incurred, IKEA does the exact opposite.
IKEA’s Flat Packaging Innovation
IKEA’s founder, Ingvar Kamprad, introduced a new selling system in the year 1956, which he termed ‘flat-packaging‘. This flat-packing selling technique has now become IKEA’s identity. So, what exactly is flat-packaging? It is a selling system where IKEA sells parts of furniture instead of selling the whole product together.
This allows the products to be packed in flat pieces, facilitating easier transport to stores. It also gives customers the option of choosing customized pieces for their use according to their convenience. Thus, IKEA manages to maintain the low price of its products.
IKEA Flat Packaging
Bulk Production
IKEA produces all their furniture in bulk. This is something that they have agreed to time and again. Be it dining tables, chairs, sofas, wardrobes, beds, showcase or anything else, they produce a good number of all designs. Therefore, they are offered discounts on the bulk purchase of raw material as well as making costs. This is how the bulk production method allows IKEA to maintain a low price strategy.
Unique Construction Technique
If you ever have the time to go through IKEA’s website, you will come to a part that describes their construction methods. They are always innovating new techniques and methods to maintain their low selling price while making sure that their customers have no complaints about the quality of the products.
On the website, it is explained how IKEA uses the technique of constructing their furniture by layering sheets of wood over a honeycomb base structure. Since the honeycomb core requires less wood, it costs less money for production. Thus, IKEA is able to maintain a low cost of products without compromising on quality.
IKEA’s Self Help Stores
IKEA believes in promoting independent shopping. What is independent shopping? It is nothing but allowing customers to shop on their own. Thus, IKEA does not hire a lot of store staff. This helps them to cut costs towards wages and provide customers with lesser priced products.
IKEA Store
In order to allow customers to shop independently, they also print all the product details, cautions, installation processes, etc. on the price tags. Hence, customers can easily read the guidelines on the price tag and choose the furniture they want to buy without any external help.
Take it home Policy
IKEA has a policy where the customers can carry their buys home by themselves on the same day. Although, it is a tad bit inconvenient this policy does come with its own set of contributions towards the low price strategy.
IKEA Take it Home Today Policy
Since customers can carry their own products, they do not need to pay the delivery charges to IKEA or pay higher product prices that may be used to facilitate free delivery. This reduces a lot of overhead costs on the making charges.
A Pioneer In Do it Yourself
If you have ever shopped at IKEA, you know pretty well that you must be adept at assembling and installing the furniture yourself. The company promotes a DIY environment, where it allows customers to install their own furniture. The DIY model of IKEA stands for Do it yourself.
IKEA Do It Yourself
They provide guidebooks and assembly charts to support customers in installing their own furniture. Thus, the company does not need to pay any extra charges to internal or external teams for installation, thereby, maintaining their low price.
In the recent past IKEA has understood that the DIY method can become a hassle for some customers, so, they acquired TaskRabbit, an external furniture installation support company. Therefore, customers have the option of hiring executives at TaskRabbit for assembling their furniture at lower costs.
IKEA TaskRabbit
Conclusion
With so many unique features and methods, IKEA has become a front-running strategist in keeping its product pricing low and maintaining its position in the market. The innovation applied in every aspect of the business makes sure that IKEA keeps giving a tough challenge to their competitors in the market, holding the top position when it comes to being one of the best furniture-selling businesses in the world. Now you know where to go the next time you want to furnish your home.
FAQ
Why is IKEA so cheap?
IKEA employs flat packaging, DIY model, and self-help stores which help the brand to keep its prices low and competitive while not compromising on the quality.
What does the DIY model of IKEA stand for?
The DIY model of IKEA stands for Do It Yourself, where it ships the product in flat packaging and the customer has to assemble the furniture by themselves which is one of the major reasons how it manages to keep costs low for consumers.
Is IKEA cheap in India?
IKEA to boost affordability in India has priced Out of the 7,500 products that it sells about 1,000 are priced less than Rs 200 and 500 cost under Rs 100.
Does IKEA sell online in India?
Yes, IKEA does sell online in India.
What does the word IKEA stand for?
IKEA stands for Ingvar Kamprad Elmtaryd Agunnaryd.
Damini Bhandary
