Theory of inevitability — The Indian Story
There is a theme that is making global investors rush to India as the ideal destination market. That theme is ‘leapfrogging’. Now what is this leapfrogging? Essentially, it means that, soon, the Indian Technology Universe would overtake that of most developed nations. India might become, by 2020, a global leader in technology solutions. It is, as the theory suggests, inevitable.
How would this be achieved?
The internet penetration within Indian societies leaves a lot to be desired. This is a reality that we know about. But there is another reality that could make India the ‘Golden Bird’ as it was once before. With restricted online penetration, India has the second largest Internet Community in the world. India holds about 331 Mn internet users. This number is set to double in the next five years.
India, it is believed, would lead the world in Internet usage. The current Indian government and its departments are constantly trying to boost Internet connectivity by introducing ‘Smart’ cities, with free Wi-Fi supply across all areas. The government plans to provide Wi-Fi connectivity to around 2500 cities across the country. Along with this, many private telecom players have been investing in pushing up their Internet users by offering a bigger bandwidth and faster speeds.
How will it affect different sectors?
Within the past two years, some of the taxi-cab aggregators such as Ola and Uber have more than doubled their coverage. They have been able to boost their reach and service areas with the help of wide range of Internet connectivity.
One of the major factors is the rise in the use of smartphone users in India. As of now, there are an estimated 158 Mn smartphone users in the country. This number, it is believed, would increase to about 470 Mn by 2020. This means that users have immediate access to different apps and features through the Internet on their smartphones. They have the ‘choice’ to select any mode of transport. This has all but transformed, or some might say, disrupted the passenger transport industry.
Another sector that stands, disrupted, is the financial sector. With the advent of different payment apps such as PayTm, there is an increase in the use of virtual money. At any point, a person can utilize their ‘Digital’ wallets to pay for a variety of services. This eases the pressure on physical point-of-sale payment gateways. It also streamlines different operational activities; as different vendors can now be paid virtually.
The government has been passionately pursuing the cause of ‘Digital India’. One of their endeavors is influencing a larger number of citizens to open a bank account (through Jan Dhan Yojana). As of now, the credit card penetration for India stands at 4%, and for debit cards, 22%. The advent of virtual money gives an opportunity to bring a lot more people on board the digital scheme.
How will it help growth?
There is some anxiety in investors that the supply constraints would negate the booming demand in various sectors in India. This is where the ‘leapfrogging’ concept would take India to the top.
It is true that there are many constraints relating to infrastructure and manpower within the country. Here, the gap between demand and supply can be bridged by the Internet. Many of the supply problems can be worked around by utilizing appropriate technology solutions.
Consider the hospitality sector where, a study shows, that the ratio for a hotel room per thousand people stands at about 0.001. Some business aggregators have started using informal housing as a form of alternatives for people. These include established business such as Airbnb, or emerging business such as OYO rooms. People can now use the Internet to choose a room before they travel to, and within, India. This has already given a boost to the tourism industry.
Another sector that has been on a constant upswing because of the digitization of the country, is online retail. India only has about 8% penetration for organized retail. This is far behind China (20%) or UK (46%). The ‘leapfrogging’ over infrastructure costs associated with increasing the traditional penetration, has been achieved by digitization of the retail industry. India has already attracted many big players like Amazon and Alibaba, with its growth potential.
Inevitable – Logistics Management Solutions
We have seen that India has the potential to become the next big market.
There are some things that need to be factored in to create this ideal market in the near future. One of the sectors that merge across all booming industries, is logistics. The supply end or delivery management can be streamlined through the appropriate use of technological innovations. Many companies are leveraging the already widespread Internet network to better manage route planning and delivery systems. They regularly invest in innovation to further the goal of truly ‘Digital India’.
The logistics industry works together different online service providers to better manage customer expectations. Some high-end online retail companies such as Myntra have associated themselves with a logistics solutions provider, LogiNext. Such associations help in creating an environment where all the potential of a digital universe, can be properly used.
Even the government is constantly pushing its awareness campaigns through social media websites and apps. The government has launched a citizen redressal app, where any individual can directly issue a complaint regarding any government service. This would, in the future, cut through a lot of bureaucracy and red tape, which would, in turn, create a safe and healthy environment for big and small businesses to function freely. This would, then, give a much-deserved boost to the economy. This would lead to more purchasing power for the average working individuals.
Such changes have already been witnessed, as India has the distinction of holding a constant growth rate of 7.5% per annum. It’s no wonder then that the digital revolution is inevitable in India.