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Localize prices like Netflix, Canva, and Big Mac [with calculators]

Updated: Oct 7


Localization is more than just purchasing power parity.


The question I wanted to answer was what should my product be priced at... and if there was a simple plug-and-play calculator that lets me adopt smarter localization pricing plays.


With that, I've covered:

  • What does localization include?

  • Three localization calculators for base price, laddering, and lite plans [jump to section]

  • Price maps from Netflix, Canva, and Big Mac [jump to section]





What does localization include?


1. Some countries get a discounted rate


Canva in Uruguay costs 0.88 USD. You know this.. but the extent of this can be higher than 50%.


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2. Some countries get a 'lite' plan


Vietnam gets a mobile-only plan at 480p, costing $2.80/month. This is not available in many other countries.


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ChatGPT Go was first-launched in India at $4.5/month which is a stripped down version of the Pro plan.


They expanded to Indonesia shortly after. India was supported via UPI payments.


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3. They show local currency

You don't directly convert to a funny looking number. But instead, round it off. And cleverly with a 90, or a 9, or a .99. If rounding off isn't possible, you can get it closer to 5 or 1.



4. Some countries get a higher rate


Switzerland has a higher Big Mac Index at $8.07. Spotify in the US is $11.99.


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In Switzerland, Spotify is priced at $17.5.


That's far higher than just currency conversion rate. As of now, 1 Swiss Franc is 1.26 USD.


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5. Price laddering can be different


The first tier vs the second tier don't scale proportionately in every country.


In the US, the base price of Neflix (with ads) jumps by 125% to the next tier. But in Japan, it jumps by only 78%.



United States

Japan

Tier 1: 720p or 1080p with ads

$7.99

$6.03

Tier 2: 1080p with no ads

$17.99

$10.77

Jump

1.25

0.79



6. Copy is translated and localized


Audible localizes languages based on the user's region. Pricing is not the only thing that is localized.


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7. Local payment methods are added


This could be Klarna, WeChat Pay, Kakao Pay. Some people pay via an email-like ID, some people via a phone number. A credit/debit card isn't the only way.


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Surfshark also offers crypto payments because that's where the audience is at. They offer a free trial only on PayPal or Credit/Debit card. Paying via crypto forgoes the trial.


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Finding Patterns


I've looked at 50 countries across the world comparing prices for Canva and Netflix.


To make economists happy, I've also added the Big Mac Index data.


Which is McDonald's way of deciding what each country should pay.


With this, I've created some calculators that you can plug and play your numbers in. And get a rough idea what the pricing should be.





What Each Calculator Does?


The calculators localize pricing in a few ways:

  1. What your monthly price should be in each country, for the base tier?

  2. What your next pricing tier should be? Eg, if Netflix charges $7.99 in the US, what have they laddered up to in the next tier ($17.99)? Laddering is never consistent across regions.

  3. What lite plans should you offer and in which reions? Work backwards from the costs and strip down features that aren't a necessity.


Keep your base price handy, which would be the base tier you offer in the US. For example, Loom's base tier is $15/month. Their pro tier is $20/month.



Calculator 1: The One to Localize Base Price


Big Mac is $5.69 in the US, Canva is $15/month, and Netflix is $7.99/month.


Find your base tier. And enter in the box below. Then round off the numbers to the closest 9 ending.





Calculator 2: The One With Laddering


Laddering is never linear for many of the companies. In the US, the base price of Neflix (with ads) jumps by 125% to the next tier. But in Japan, it jumps by only 78%.


Egypt gets a 720p plan that jumps by 65%. Norway's jumps by only 35%. That's because the base prices are localized ie the entry price. What costs $10 in Norway costs $2.5 in Egypt.


If you plan to make your base tier competitive, you can use this laddering calculator.




Calculator 3: The One For Lite Plans


Lite plans are no-frills options available to certain regions. Where your base price isn't competitive enough and the market demands a cheaper price. Input your base price and see what price you could ladder down to.







Example: Canva's Localized Pricing


Hover on the map to see what Canva charges in each region.


  • Uruguay gets Canva for 0.88 USD.

  • Costa Rica gets Canva for 45.56 USD. That seemed like a bug to me.

  • Canva typically localizes prices down to 25-50% of the original.

  • They show localized currency pricing (eg, in Pounds for UK) for 22 regions.

  • They offer the same plan across regions, unlike Netflix and Big Mac. There are no lite plans.





Example: Big Mac's Localized Pricing


Hover on the map to see what Big Mac charges in each region.


The most common localization framework is the Big Mac framework, that economists often refer to.


  • A Big Mac costs twice $8.07 in Switzerland

  • In the US, it costs $5.69

  • And in Taiwan, it costs $2.28





Example: Netflix' Localized Pricing


Hover on the map to see what Netflix charges in each region for their 1080p premium tier (which is often the second most expensive tier).


Netflix has pricing tiers.


  • Cheap, mobile-only plan at 480p

  • 720p Base Plan

  • 1080p with Ads Base Plan

  • 1080p without ads

  • 4k + HDR premium plan


For most regions, they don't offer the mobile-only plan.


They offer either the 720p or the ads plan. But never both. That way, their tiers never go beyond four on a page.




Thanks for reading!


 
 
 
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