Sunny Side Up 🍳: Grand Theft Auto, preowned Enfields & your relationship with money

Hey folks!

Flipkart just ended up spending ₹20,000 on a shampoo bottle.

The reason? A simple MRP (Maximum Retail Price) spat.

Well, Sowmya a customer from Bengaluru realised that she was overcharged for a product she bought off Flipkart’s Big Billion Days Sale in 2019. And when the customer support wasn’t satisfactory, she took the e-commerce platform to consumer court. The court ruled in her favour. And not only did she get her refund, but compensation for her troubles too.

The court’s decision may have been quite predictable since India is quite strict about its MRP rule, which kicked off in 1990. It was a simple law that prevented retailers from profiteering by overcharging customers. And India’s probably one of the handful of countries that have this MRP rule.

But here’s the thing. MRPs may not always be in favour of customers. And that’s because some retailers may incur extra costs to stock certain products. For instance, products that don’t sell out quickly can put the burden of extra storage costs on the retailer. This means that retailers might want to charge a little more than the MRP to keep their business profitable. But since that isn’t permitted, they often choose not to stock up such low demand products. So customers may not always find the products they’re looking for especially if they live in rural areas.

That’s one of the reasons why MRPs are considered irrelevant today. Foreign companies like Decathlon and Ikea have also complained about MRPs in India since they source their products from global suppliers. And selling in India means segregating products and pasting MRP labels on them to conform to the rules.

But if MRPs are scrapped, then how will customers like Sowmya deal with some retailers who exorbitantly price their products? That’s quite a dilemma.

Here’s a soundtrack to put you in the mood 🎵

Just As Easily by Frizzell D’Souza

A couple of things caught our eye this week 👀

The GTA buzz is back

The Grand Theft Auto (GTA) VI trailer released this week. And gamers are going gaga over it. Well the game isn’t coming out before 2025, but the build up is quite crazy.

The reason is simple. GTA is one of the most profitable franchises in the gaming industry. And was first released in 1997 by Rockstar Games. Since then, the series has earned over $8 billion. That even beats Star Wars or Harry Potter. And that’s because GTA lets you be what you want to be in a hypothetical world and do whatever you want. So even crime isn’t punished here. Not that we’re endorsing it but that’s one of the reasons it’s so popular.

And it’s quite a money spinner for everyone in gaming.

You see, Bloomberg says that GTA VI’s predecessor, GTA V, which came out a decade ago was the fastest entertainment release in history to reach $1 billion in retail sales and the best-selling game in the US over the past decade. Who knows what records the upcoming game will break!

There’s also huge opportunity for Microsoft and Sony to increase their sales because it won’t come to computers straight away and will be released on gaming consoles such as Xbox and PS5 first.

Another group of folks who can’t wait for GTA VI are gaming livestreamers, who also have a big market in India. It could be as big as $230 million by 2028. The release of popular titles like GTA VI gives them a chance to grow their subscriber base and viewership by roping in brand sponsorships.

You can be sure that Rockstar Games will make sure that it gets bang for its buck too as the rumour is that it has spent about $2 billion so far on developing it. And just so you get an idea, GTA V earned revenues that were 30x the production costs.

What magic will GTA VI weave for Rockstar Games? Well, there’s two years to figure that out. And maybe we’ll talk about it again then.

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Enfield has new ideas

Royal Enfield bikes are quite a distant dream for many. But the brand is trying to make it easier to achieve this dream. This week, it forayed into selling pre owned bikes with its new venture ‘Reown’. So existing and prospective customers can buy, sell, exchange or upgrade their motorcycles smoothly from the brand itself.

And this might just be taking a leaf out of Maruti Suzuki’s book.

Yup, Maruti Suzuki set up a pre-owned showroom brand called True Value way back in 2001. And as of this year, it has sold out 50 lakh used cars this way. Now the resale model doesn’t generate direct revenue for Maruti but as per their executives, nearly 25% of their new-car business depends on it.

What do we mean?

For starters, it could attract new customers to Maruti when the buyer is sure of getting an attractive resale value from the brand itself. When it comes time to sell the vehicle, the hassle of negotiating with others evaporates. Also, it could build more loyalty. For first-time car buyers who haven’t got much to splurge on a brand new car, they get to first test waters with a company approved used car. And as per a report from a few years ago by Motilal Oswal, nearly 75% of True Value customers upgrade to a new vehicle within a couple of years. Probably to a new Maruti Suzuki model itself.

So yeah, that’s how True Value indirectly contributes to Maruti’s sales.

And Royal Enfield will be hoping for the same as it defends its turf against the onslaught of premium bikes such as ‘Hero x Harley’ and ‘Bajaj x Triumph’.

Let’s see how it works out.

Jargon of the day ✏️

Money tips 💰

Relationship status with Money: It’s complicated

When it comes to money management, there’s one thing we don’t talk about enough — Our relationship with money.

Why are you a spendthrift? Or on the contrary, what explains your frugality?

Taking a moment to introspect will help you develop a better relationship with your money. So take out your notebook or journal and spend some time with yourself today. We’ve got some questions to help you get started on this journey. So try and answer as many as you can and take all the time you need:

• What was your relationship with money as a kid?
• Did your parents discuss money at home and how has that led you to think about money?
• Has your relationship with money changed as you’ve gotten older?
• What/Who has influenced any change in your money habits?
• What does financial independence or financial freedom mean to you?

If it’s too overwhelming, don’t forget to take breaks in between. Maybe order some dessert too.

Okay? Then let’s move on to the next.

• Do your friends think you spend too much or too little? How does that affect you?
• What do you absolutely love spending money on? And what do you hate spending it on?
• Have you tried your hand at budgeting before? If you have and you’ve failed, why do you think that happened?
• If you’re going to make a big purchase, what are the emotions you feel when you’re at the checkout counter? Do those emotions change after a few days?
• Do you think there are money-related habits that you wish you didn’t have? Have your goals been affected by money troubles?
• Does money play a big part in how you define success in life?

Once you’re done, don’t just shut the book and bury it in a dark corner of your drawer. Take some time to actually reflect on your answers. And while this may not lead to a better relationship with money overnight it will hopefully get you thinking and reveal some patterns soon enough!

Readers Recommend 🗒️

What I Learned About Investing from Darwin by Pulak Prasad

This recommendation comes from our reader Vishnu Muraleedhar who calls it, “A practical and enjoyable book that combines Science and Investing written in a clear and concise way.”

Or to borrow from the Goodreads description — “Informed by successful evolutionary strategies,  Prasad outlines his counterintuitive principles for long-term gain. He  provides three mantras of investing: Avoid big risks; buy high quality  at a fair price; and don’t be lazy―be very lazy.”

Seems quite interesting, eh?

Finshots Weekly Quiz 🧩

It’s time to announce the winner of our last week’s quiz. And the winner is…🥁

Jyoti R! Congratulations. Keep an eye on your inbox and we’ll get in touch with you soon to send over your Finshots merch. And for the rest of you, we’ve moved the weekly quiz to our weekly wrapup. So make sure you answer all the questions correctly and tune in here next week to check if you got lucky.

Until then, don’t forget to tell us what you thought of today’s newsletter. And send us your book, music, business movies, documentaries or podcast recommendations. We’ll feature them in the newsletter! Just hit reply to this email (or if you’re reading this on the web, drop us a message: morning@finshots.in).

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