The Call
Of Regulation, Market Forces, Distance, and Student Life
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It was not too long ago that India was a protectionist nation. Regulations thwarted rather than enabled progress, and costs were high due to the lack of competition. Some sectors, like telecom, were heavily nationalized and regulated. The state had a stake in most industries.
In 1977, as part of another protectionist measure, policymakers decided to force foreign companies to increase Indian ownership stakes. Rather than innovate, decision-makers sought to acquire existing operations.
One company in particular—Coca-Cola—decided it had enough and left. Persistent rumors circulated that the company had been asked to divulge its secret recipe—a simplistic notion, perhaps driven by the understanding of the side effects of divesting ownership and starting local manufacturing operations.
A local entrepreneur who already owned other soda brands decided to fill the gap left by Coke.
As a result, older teens in India had to contend with drinks served in 330 ml glass bottles and marketed as ‘Thums Up,’ ‘Limca’ (similar to 7-Up), and ‘Gold Spot’ (an orange soda) to maintain their ‘cool’ factor in college.
Indian advertising agencies, which have enjoyed a stellar reputation for decades, succeeded beyond measure in driving the ‘coolness’ factor through television and print ads during the days of a single broadcast channel.
‘Fun times’ became associated with ‘Limca’ times.
Even though the orange soda ‘Fanta’ was a Coca-Cola brand, orange drinks in India became colloquially known as "Fantas," a name that persists to this day.
But ‘Thums Up’ soon became the favorite cola of college-goers, capturing 85% of the cola market at its peak in 1993, with its taste and brand recognition seen as the closest to Coke.
Some enterprising individuals began sneaking red Coca-Cola cans into the country, using their heavily restricted foreign currency allocations from overseas visits.
Meanwhile, savvy business owners, recognizing the unmet demand for foreign goods, opened ‘Imported Shoppes’ in major Indian cities, where you could buy a Coke can for 4x-6x the U.S. market price—consuming premium brands, after all, has always been a sought-after status symbol in India.
This state of affairs could not last.
Sooner rather than later, the nation’s currency devalued, and measures to prop it up led to the undeniable reality that India was soon going to run out of foreign cash reserves. With that realization came the forward-thinking wisdom that free enterprise, deregulated industries, and competition might be the way out of the crisis.
In 1993, Coca-Cola re-entered the Indian market (though PepsiCo had a two-year head start), acquiring ‘Thums Up’ (along with the other ‘cool’ drinks), its 85% market share, and the brand’s ‘coolness’ factor for nearly $60-90M.
Coca-Cola began investing in the brand, shifting its target audience from college-goers to professionals.
Once the markets opened, there was no going back, and the memory of depleting cash reserves was a nightmare no one wanted to relive.
India welcomed foreign investment, which eventually paved the way for the technology boom, resulting in higher disposable incomes and the spread of technology that accelerated the country’s development to catch up with the modern world.
‘Imported Shoppes’ fell by the wayside, and now the few that remain offer select premium fragrances and gift products for the e-commerce-shy. New department stores, modeled after those in the U.S., sprang up and continued expanding until the pandemic.
For the first time, the Indian consumer faced the phenomenon of ‘choice.’
If you visit India now, you can still try the 1980s' cool drink—‘Thums Up’—as Coca-Cola continues to market it alongside readily available Coke bottles, cans, and Pepsi drinks. Coke and Pepsi are often staples at pizza lunches in tech firms.
Coke cans now cost around $0.50, compared to $1-$1.50 in the U.S. - a benefit of joint manufacturing operations and pricing for parity. In fact, a news story claims that Coca-Cola now offers the lowest-priced serving of cola per paper cup in the world, at just $0.07 per cup, in India’s rural regions.
Fascinating as these market developments are, the fictional story I share below is set in a time before such choices were available and before the advent of technology made human connection instantaneous and affordable.