In a previous blog post, we discussed the rising buying power in Asian countries and did a specific analysis of different consumer behavior in India. It is incredibly important to fully analyze different cultures before entering a market to make sure that your product will appeal to the consumers of that culture. When Spotify entered India, they had to make a lot of changes to their offering so that it would appeal to Indian consumers. The first and most basic change was to the price; they made their paid service significantly cheaper for Indian users. The monthly price was brought down to under $2 in comparison to $10 in the United States. In addition, they increased the capabilities of the free version of Spotify by allowing on demand streaming of songs for mobile users. This allowed more users in India to be enrolled with Spotify even if they are not spending money for the premium version. This is because Indian consumers are extremely price sensitive and savvy with their spending. In fact, Youtube became a competitor to Spotify because so many people prefer to use Youtube to listen to music since it is free.
Spotify also made an adjustment on the payment options for Indian users. We previously discussed how shoppers often go for smaller travel sized products instead of purchasing larger and more expensive products. The same goes for Spotify as they allow users to purchase weekly and even daily subscriptions of Spotify instead of monthly in the United States. This strategy was effective as it allowed Indian users to test out the service without long-term commitment as well as flexibly purchase the service when they find it useful. The final adjustment they made was focused around the content on Spotify. They needed to make sure that they had music that was popular to the consumers in India. They made a deal with T-series to acquire over 150,000 popular Indian songs that could be listened to on Spotify. This was definitely the most important adaptation that needed to be made because they need to provide content that their consumers will actually be interested in listening to.
Spotify’s launch in India really shows how even basic subscription platforms need to make major changes to account for different cross-cultural consumer behavior. Without making these changes, Spotify would have not been very attractive to Indian consumers and would likely have failed altogether.