[TechSparks 2021] Startups illustrate how India has gone from being a country of promise and potential to a country of performance
Today, the best ideas across domains are the ones reimagining customer experiences and are using simplicity as the common fabric, shared Kumara Raghavan, India Head, Startup Segment, AWS India (AISPL), as he set the context for the panel discussion on ‘Disrupting Indian startups: Disrupting to solve for the next billion in India & beyond’ at TechSparks 2021.
The panel discussion brought to the fore interesting perspectives from CEOs of four startups, - FreshToHome, , , and -- each of which are driving disruption in their respective domains.
The shift in the Indian startup ecosystem
With 33 unicorns in 2021, and withand Freshworks filing for IPOs, startups are clearly seeing a level of success that's never seen before, noted Saurabh S, CEO, Praman.Ai. He added that the accelerated number of startups joining the Unicorn club in just one year is a testament to where the Indian startup is ecosystem is heading towards in terms of technology disruption.
“Today, startups are mainstream. People are enamoured by the charm of startups and how they are solving interesting, real-world problems.”
Taking that thought further ahead, Amit Kumar, Founder & CEO, NoBroker.com, observed, that while the last five years witnessed huge growth in terms of startup validations, there was a larger consensus that a startup still had to go to the US to get listed.
“Today, with the Zomato IPO, the conversation has shifted to listing in India. So, from an investor perspective, we have not only seen a huge amount of interest, but a clear exit path for the investors,” said Amit.
He added the other big shift is in terms of customer behaviour where it is not people who are using tech-led services on their smartphones, but also people from lower economic backgrounds, and cited the real estate search portal’s own experience. “Today, NoBroker.com is not just being used by people from gated communities and apartments, but people who are earning Rs 5,000 a month,” said Amit.
Having spent a large part of his career in startups in the Bay Area and being part of startups that went public in the US, Shan Kadavil, CEO and Co-founder, FreshToHome, shared that the thought of relocating back to India to build a startup was “unthinkable” at that point.
“But, starting FreshToHome and working on it for the last six years, I am now a believer,” he shared, highlighting the transformation the Indian startup ecosystem has undergone in the last 10 years. Shan added that today, outside the US and China, India is the only other place where large institutional funds can actually soak in capital in a safe manner.
Pointing towards the market opportunity in India, especially in the segment that FreshToHome operates in, he said, “E-grocery is is severely under penetrated in India accounting for less than one percent of India’s overall retail. Going up to even just 2 percent can itself create huge amounts of economic opportunity in this category of meat and fish alone.”
Shan’s key message was that there is a huge disruption opportunity for startups in India. Pointing to other interesting market observation, Shan highlighted that while metros used to be the key growth drivers for startup tech adoption, today the growth is coming from suburban cities.
“In the last six months alone, FreshToHome has launched in 30 cities, most of which are Tier II, III, and even IV cities. And we are seeing tremendous traction.”
Rahul Sharma, Co-founder, Zetwerk Manufacturing, a contract maker of consumer and capital goods and a B2B startup that joined the Unicorn club in August this year, shared,
“One major difference that we see today is that earlier solutions were being built for India, but today solutions are being built from India for the world. And that will change the way the domestic startup ecosystem will evolve.”
Tech at the heart of transformation
The panel discussion also saw the CEOs giving an overview of some of the industry trends and their experience on the ground.
NoBroker.com’s Amit shared that while the realty sector was suffering a setback from demonetisation and GST, the ‘rock-bottom’ drop in the home loan prices brought a surge in growth during the last one year. The growth was driven by end-use buying rather than for investment purposes. He added that from a tech perspective, a major acceleration has been ushered in the area of personalisation, leveraging AI and ML.
“The question we are trying to address from a technology perspective is that can the platform become the perfect broker with knowledge about every property and customer preferences.”
Shifting attention to agritech, Praman.ai’s Saurabh shared, “Traditionally, commodities trading in India has seen only a handful of agricultural produce, because the quality of agricultural produce has always been subjective and therefore relied on physical means. Agricultural share in the trade exchanges hasn’t picked up as it should have. Sub sectors like horticulture and spices are not traded on any exchanges. While there have been aggregators in the space, a democratic platform that truly connects the buyers and sellers in the sector never truly came along.” This is where Intello’s deeptech, using computer vision and AI & ML algorithms, has been able to change the way quality is assessed.
“Using a simple camera phone, buyers can now assess the surface quality of the horticultural produce and spices and get it listed on Praman, a market linkage exchange platform that we're building for sellers and buyers to come together and trade with confidence and trust,” shared Saurabh. He pointed towards the potential of a platform like Praman, which today manages $2 million worth of transactions.
“At the end of the day, this is still a blip in the $500 billion agricultural sector.” He reiterated that changing the way agricultural produce is traded will bring about much needed transformation in the sector. He noted that deeptech will play a key role.
The ‘try-to-buy-it’ experience for retail growth
Shan shared, “Today, we are the largest virtual player in the fish and meat category in India, with 23,000 tonnes of it getting sourced on an electronic exchange.” He explained that while the quality of produce from organised players like FreshToHome brings with it the promise of better quality given that they have shortened the supply chain cycle to less than 24 hours as opposed to an average of 72 hours, it is hard to communicate this advantage.
He said, the pandemic was a one-time opportunity, which enabled customers to try our solutions because the wet markets were closed. This not only saw people trying the platform, but also led to retention - about 96 percent retention post the third purchase.
“To get to the mass of India, you need to drive try-to-buy-it experience, especially in retail that is going from offline to online.”
Shan emphasised that FreshToHome’s growth is being driven by this strategy and it will see the brand onboarding new stores onto its platform -- from 33 to 100 in the next three months -- thereby enabling customers to get a touch and feel of FreshToHome’s products and eventually make the shift.
He said, “Retail is a key part of our strategy to touch the next billion users.”
Driving technology can drive shift
Pointing towards an interesting observation to highlight the need for driving supply chain visibility for high investment projects, Rahul remarked, “Today, in India, we know when our meal is reaching us. But there is no visibility when the big infrastructure projects will get completed.” He added that Zetwerk has been working towards addressing this challenge beginning with enterprises, which is bringing a transformational shift.
“Today, we have more than 600 customers on our platform, and more than 10 percent of them have come from outside India. That's an amazing feat because we have been able to move supply chains, which were earlier between the US and China and the US and India. These are companies which have been traditionally sourcing from China, and had no trust in the Indian ecosystem.”
He added that the shift has also seen acceleration because after China, India is probably the only other market where there is huge scale for domestic demand, which can serve global demand as well.
“There is huge fragmentation across sectors that needs to be fixed and it will take humongous effort. And only startups can do that because the nimbleness and agility that you need from the solutions can come only from them,” shared Praman.ai’s Saurabh.
He shared that the disruption in the agriculture sector in a sunrise phase. While we see many startups coming to disrupt niche categories and geographies, the real digitisation will happen 5-10 years later when these disruptions will come to the public eye.
Zetwerk’s Rahul Sharma noted that the next few months will see the startup focussing on international expansion, given the traction they are getting and also expanding the scope of their “horizontal solution” to newer categories.
“We will invest a lot more in technology so that we can drive integration across the ecosystem as well as drive visibility. Today, not just the buyer, but the end consumer is also demanding visibility and we will see a lot of innovation in supply chain towards that end,” he shared.
In his closing remarks, AISPL’s Kumara shared that the discussion with the startups are an indicator of why “India has come a long way from being a country of promise and potential to a country of promise. But we have a long way to go in terms of driving adoption and making the experience for customers.”
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