The biggest problem in India is thinking they can permanently buy customer loyalty by offering big discounts in the beginning.

This is where the 'intense competition' is dangerous part comes from. After you have spent billions on subsidising prices for the customer, newer companies come, and do the same. The customers see no issues in now buying from the newer companies. The older companies find themselves in a hard position with no profits and big debts.

In India customers are loyal to only one thing 'cheap prices'. Thats all there is to this story. Many times even if there is no real competition, you are often competing with the customers mindset itself.

Consumer's limited spending power should not be discounted. I worked for an Indian startup and it was clear that India gives you the user numbers to show growth but you are never going to able to monetize it because you can't squeeze blood from a stone. The typical strategy is use India to build and test products, and market to first or second world countries. The _only_ startups that could turn a profit were the fantasy gaming and gambling ones. Ultra predatory business practices and powered by addiction and the fact that UPI enables zero transaction costs on small amounts so they can make a profit with individual sales as low as a few cents.