For decades now, India has lacked consumer-facing companies that have dominated markets worldwide. Now, as the startup ecosystem is on the cusp of maturing, we look at companies that keep the India flag flying high. Here's who.
You will always find one thing common in all developed & flourishing economies: Global Champions. Companies operating in consumer-focused sectors (like FMCG, automobiles, consumer electronics) that are unrivalled in their category on the international stage. Manufacturing giant Germany had a boom of world-class automakers post World War 2. Japan had the complex yet efficient model of keiretsus which includes the likes of Mitsubishi, Nissan, Toyota, Sony & Toshiba. America has a slew of lifestyle brands like Coca Cola, Apple, Marlboro, McDonald's, Ford and Levis which sold the American Dream and created an image of a "happy & prosperous" America. China now too has smartphone brands that are dominant layers as well as a band of globally used apps.
It also makes economic sense to have such global behemoths at your corporate stable. They not only bring in tons of foreign exchange through reserves but also improve global perception of Indian brands. Given below are some sectors & companies that can propel Brand India ahead:
Software As A Service (SAAS)
Unlike the IT Sector boom of the early 2000s which produced giants like TCS & Infosys, the SaaS industry has the scope of creating companies that are more well known amongst the masses around the world. SaaS is not as complex as it sounds. It basically refers to companies that host the software on the cloud & allow access to it through a subscription basis. Reasons why SaaS might be big in India:
Bengaluru has a great ecosystem for developing software startups something akin to Silicon Valley & Computers in the 1980s.
As stated a gazillion times everywhere on the Internet, the Covid lead digital transformation across industries bodes well for the near term prospects for an industry dabbling in digital solutions for enterprises. This has also seen a rise in funding for these startups.
3. India already has 6 Unicorns in this space- Postman, Zenoti, Innovacer, Highradius, Chargebee and Browserstack. This implies that funding is available for the SaaS space & the VC world has confidence in its future prospects.
4.India has great human resources. The skill sets required to build & scale up such businesses are available in abundance in India's engineer crazy system.
5. Apart from the ubiquitous United States, India has no other country which has such a comprehensive SaaS space. Even the UK has struggled in this field.
SaaS has a trillion-dollar potential creating employment for thousands. India needs a more precise government policy, the continued inflow of foreign capital and in general, a clutch of companies who cement their own different niche in different segments (which is already happening if we take a closer look at the unicorns listed above).
Electric Scooters
In my humble opinion, electric scooters will lead the charge of EV adoption in India instead of four-wheelers. The income patterns in India are such that buying an expensive electric car (even after being heavily subsidized) makes sense only for a small segment of the population. Two Wheelers on the other hand are below the vaunted "1 Lakh" mark in terms of price. Reasons which can make India a global two-wheeler EV hub are:
India is the largest two-wheeler market in the world. The penchant for scooters & bikes is unrivalled across the globe. Strong domestic demand is essential to build the foundations of an international industry. Without this, the industry would be exposed to the whim of foreign buyers (as most products would have to be exported in absence of domestic demand) who have little to no brand awareness about Indian brands.
The industry is receiving tremendous incentives from both the central & state governments. Government support can help in building a cohesive EV ecosystem. Some policies and initiatives are explained below:
National Electric Mobility Mission Plan- An ambitious roadmap including several policies to achieve yearly EV sales of 6-7 million from 2021 onwards.
FAME-I and II- Subsidize EVs & incentivize the building of charging infrastructure.
National Mission for Transformative Mobility and Battery Manufacturing- Phased Manufacturing Program, Advanced Chemistry Cell Production Linked Incentive Scheme have been devised to give the required boost to the sector to give a boost to component manufacturing.
3. India already has evolved from product to prototype. A large number of companies like Ather & Bajaj Auto have already sold thousands of units. This is a good sign as even without the needed infrastructure, Indian entrepreneurs have managed to build a great product.
Ather 450 (Source: ET Auto)
4. The industry players have great ambitions. Ola Electric is building the world's largest EV factory. Hero MotorCorp is building its own EV ecosystem. Power sector players like Tata Power & NTPC Limited are going big on charging infrastructure.
All things considered, the two-wheeler EV segment of India seems poised to break barriers. The industry has great export potential for South-East Asia, Nigeria, South Africa, the Netherlands & Middle East (the not so rich nations like Oman & Jordan).
5G
India has been characteristically late to the next big thing in tech. However, certain factors can help India build 5G infrastructure for the world.
First & foremost, India has a great full-stack ecosystem for 5G (comprised of scores of startups) right from the software, hardware, optical, semiconductors & chips to large scale network integration capabilities.
Reliance Jio, the leading telecom player has established deep synergies with Facebook & Google. This gives them access to both the American companies' global partners which can accentuate Jio's R&D pace.
The global geopolitical environment is suspicious of China. This takes the leading 5G player, Huawei off the books for most of the western world. Ericsson, the leading Swedish telecom player has also lagged behind in 5G giving some breathing space to Indian aspirations to fill this void.
Source: Daily Express
However, for this grand plan to succeed, the Indian government will have to buckle up. Their AGR taxation & spectrum auctions have nearly bankrupted India's prior dominant players- now a merged entity called Vi (Vodafone-Idea). This has curbed competition & has made the telecom sector a near two-horse race between Jio & Airtel.
Media & Entertainment
Hollywood has ruled the roost when it comes to global viewership. However, the OTT revolution has opened the doors for more diverse content consumption for viewers globally. Indian shows like Sacred Games and Scam 1992 have done well on international viewing charts. The Indian diaspora around the world can fuel this growth as well.
India's Animation, Visual Effects, Gaming & Comics (AVGC) Industry has tons of potential. Already, India commands 10% of global animation VFX production. Experts believe this can rise up to 25% by 2025 through shrewd policymaking.
Gaming can be a big boom in India. Soonicorn MPL has shown India's appetite for games. Fantasy Gaming like DreamX1 & esports events based on cricket & football can drive in lakhs of players.
India's rich heritage & mythology can be a great avenue for comics. Publishers like Amar Chitra Katha have built up a great content library over the years. Strategic marketing & upgrading of this type of content through animations can bring in more global as well as domestic audiences.
The AVGC Industry can also alleviate India's soft power globally. Turkey has recently done well in this regard in South Asia as well as in the Middle East. India's potential is such that it can go global.
AGRITECH
After the government's well intentioned but ill executed attempt to boost manufacturing in India failed, the number of people dependant on agriculture for livelihood remained above 40%. The startup ecosystem has a chance to make some real money as well as solve Indian agriculture's inherent issues.
The agri supply chain is in dire need of digitization. Delay in payments, poor storage facilities, inaccurate demand forecasting & inconsistent supply has made it a tiresome process. However, digitising the same can remove certain hurdles & give more transparency to the system. There are also opportunities in soil analysis, robotics, agriweather forecasting, D2C of consumable agri goods as well as financing. This shows the is no lack of opportunity & room for growth in this space.
The controversial Farm Bills are also startup friendly. The law allows collaborations between farmers & startups.
Agritech solutions once set unsuccessfully are easy to integrate in other geographies. With proper IP protection, agritech can scale rapidly not only in India but in other similar locations as well.
Agritech can also serve as an investor's darling once there are one or two success stories. It can also generate good PR as these startups are bound to produce more publicity.
This space has a potential to improve the lives of millions. It remains to be seen if it captures the enormous potential it has.
So there you have it. These are the segments that can really propel India forward on the global stage.
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