Although India for startups, the United States continues to reign as the biggest and most important economy in the world, New York, Los Angeles, and Chicago, followed by Southeast Asian cities, emerging markets from Beijing to Brasilia, from Moscow to Mumbai and from Jakarta to Johannesburg eminent economic markets are fast gaining importance.
India, counted among the emerging markets is a breeding zone for startups. Emerging economies contribute to about 85% of the global population. It is interesting to note that 85% of people (that comes to almost 6 billion) are already grabbed eyeballs of the developed nations.
According to a recent report published by The Economic Times, emerging markets together contribute to about 60% of global GDP. Ever since the financial crisis happened in 2008, these rising economies have contributed more than 80% to global growth.
Increased Internet penetration and ever-increasing smartphone user base are the primary drivers for growth. These have made it easier for new entrepreneurs and app startups to set up businesses.
Entrepreneurs often enter these emerging markets by replicating their developed economy-focused mobile strategy. However, it has been observed that a mobile strategy that shows brilliant results in developed economies seldom works in emerging economies. Indian startups in popular domains like data analytics, artificial intelligence, and blockchain have routinely mopped up angel and seed funding.
Quite a few have even made headlines for their acquisition by global tech giants like Facebook, Google, and Apple. These early-stage success stories naturally inspire more young people to test the waters. In this post, we will focus on the tech startups in India that holds a lot of hope for us.
Challenges The credit card penetration rate: The limited credit card penetration rate in most emerging markets is forcing Indian entrepreneurs to think local. If you are accustomed to receiving digital payments via credit cards, (America has a 71% credit card penetration rate) you need to overcome particularly this monetization challenge.
In fact, you can think of introducing payment methods already prevalent in emerging markets like COD and payment wallets.
Costs involved in accessing mobile data: Mobile data connection in a majority of the emerging markets is unreliable and often costly. Hence, if you are coming straight out of the US where data plans are flexible, cheap and often reliable, focus on how much data usage is effective for making an impact.
Logistics issues need proper handling: Doing business in emerging markets comes with a lot of challenges, especially for entrepreneurs entering with e-commerce apps. Improper choice of vendors is often a deterrent factor in most cases.
Opportunities Fresh talent for Entrepreneurship Talented students from top colleges are showing interest in joining startups or to start their own ventures. Challenging assignments, ample learning opportunities, and huge funding that brings huge compensation packages are the primary reasons for making startups a very lucrative place and an attractive value proposition.
Also, qualified and experienced mid-level officials are setting up their own business and express keenness to work for startups. Indian and Foreign Investors Making Huge Investments in Startups The Indian startup ecosystem is getting substantial support from foreign and Indian investors, who are ready to invest in Indian markets.
Many of them have full-functional teams in India, while the owners operate from the US or UK. In 2015, India saw almost 300+ active angels and VC/PE players, who carried out more than 300 deals. Various VC/PE investments happened in the expansion stage.
New York-based Tiger Global Management (TGM) is currently the top foreign investor in India, followed by the Russian company- DST Global, Japanese telecom giant Softbank, Kalaari Capital, Sequoia Capital, and Accel Partners.
Government Funds for Startup Firms Increased funding by the Indian government has been a big hope for young entrepreneurs in India. The government has assisted the start-up firms largely, by offering infrastructure support that is helping them perform and sustain both in the domestic and global market.
In addition, the Indian government and semi-governmental initiatives are assisting startups to work on newer technologies like IoT and AI and come up with innovative products.
Startup India Initiative Launched by the honorable Prime Minister of India, Mr. Narendra Modi, and Start-Up India initiative is a fresh lease of hope for start-up firms and comes out of the jinx of the conventional License Raj of India. The program includes three-year tax and compliance breaks intended for cutting arduous government regulations and red-tapism.
E-biz portal In order to bring down the complexities and obstructions in setting up a business, the Government of India has launched an e-biz portal that integrates as many as 14 regulatory permissions and licenses at one source. The widespread usage of this portal will enable faster clearances and boost startups in India. The challenges of Indian startups are manifold. But it is good to see how several new breeds of entrepreneurs and startups have begun to look at the opportunities beyond those challenges.
All you need is the right strategy for the business. Entrepreneurs need to enter the markets with adequate preparation and confidence and the newly found strategy will reveal a way to escape stagnant demand back at home. At the same time, they need to create new and profitable streams of revenue and find the competitive advantages of your business.
