Q.Explain the idea of ‘commoditisation’, with an example from contemporary India.

Commoditisation

Commoditisation describes the process by which goods or services that were once distinctive, differentiated, or valued for their unique qualities become standardised, interchangeable products competing primarily on price. When a market becomes commoditised, consumers perceive little difference between competing offerings, so the lowest-cost provider typically wins.

This transformation strips away brand loyalty, specialised features, and premium pricing power. Products that once commanded attention for their innovation or craftsmanship turn into generic items where one supplier's version is functionally identical to another's.

Example from contemporary India: …

Commoditisation describes the market transformation that occurs when goods or services that were once differentiated—perhaps by brand, quality, features, or innovation—become standardised and interchangeable in the eyes of consumers. When this happens, buyers no longer perceive meaningful differences between competing offerings. The product becomes a "commodity," valued mainly for its basic function rather than any special characteristic. Sellers lose their pricing power because customers will simply choose whoever offers the lowest price.

This process typically unfolds in mature markets where technology has spread widely, production methods have been copied, and multiple competitors offer nearly identical products. The uniqueness that once justified a premium price erodes. Companies find themselves trapped in price wars, with shrinking profit margins, because they cannot convince customers to pay more for what appears to be the same thing.

Several forces drive commoditisation. Technological diffusion means innovations quickly become standard features across an industry. Increased competition, especially from new entrants or foreign manufacturers, floods the market with similar alternatives. Improved information access—particularly through the internet—makes it easier for consumers to compare products and spot when differences are superficial. Regulatory standardisation can also play a role, requiring all players to meet the same specifications.

A clear contemporary Indian example is the smartphone market, particularly in the budget and mid-range segments. A decade ago, owning a smartphone was itself a mark of distinction, and brands like Apple and Samsung commanded loyalty based on perceived superiority in design, camera quality, and user experience. Today, dozens of brands—Xiaomi, Realme, Oppo, Vivo, Samsung, Motorola, and others—offer phones in the fifteen-thousand to twenty-five-thousand rupee range with remarkably similar specifications: comparable processors, similar camera megapixel counts, nearly identical screen sizes and refresh rates, and equivalent battery capacities. …