Ashneer Grover, who was the co-founder of BharatPe believes it’s necessary for everyone to reduce their marketing expenses. According to Grover, at present, approximately Rs 20,000 crore are spent on marketing in the gaming industry each year, and this spending may need to come to a halt.
He believes that organic growth and pausing marketing expenditures will enable survival now. “The margins are too thin to justify continued marketing spending. In the past, when margins were at 10 percent to 20 percent, it made sense to invest in acquiring more customers and eventually recovering those costs,” says Grover and highlights increased GST and heightened competition as the reasons for margins being under threat, thus implying that people need to reduce their marketing spends.
Grover addresses the increased GST in gaming topic and explains that gaming has functioned well for the past decade and has the potential to generate significant employment and government revenue. However, the recent GST rule change has complicated matters.
“I would love to see the government publish data on how much revenue they generated before and after the GST rule change. This objective information could help determine whether the government’s decision was right or wrong. The political class might reconsider its stance when they witness job losses, companies shutting down and a decrease in revenue, contrary to their expectations of an increase,” says Grover.
Read the full Storyboard18 interview with Ashneer Grover here: Exclusive: Banning or targeting gaming has become a politically fashionable move, says Ashneer Grover