The businesses catalysing growth in a booming global tech hub
India has a longstanding reputation in IT and digital services. However, before the country’s economic reforms of 1991 this was mostly confined to outsourcing: talented Indian migrants transformed Western tech markets but there weren’t many opportunities in the domestic sector. Today, this is no longer the case. Thanks to growing local demand for digital, a well developed IT education infrastructure, and cost advantages compared to countries such as the US, Indian IT companies have flourished, creating an industry that was worth $167bn in 2017-18.
With a population of 1.3 billion people, and economic growth rates exceeding 7 per cent, it’s no wonder that foreign investment is flooding in to India. In the tech sector, companies such as Amazon, Walmart and Uber are vying for market share. In their way, however, stand a host of highly successful domestic competitors. Here we take a look at five businesses currently defining the shape of the Indian technology sector.
Dedicated to fashion and lifestyle products, Myntra is one of the largest ecommerce sites in India. Catering to the image conscious middle classes, the site maintains a particular focus on branded goods, with endorsements from celebrities and a YouTube channel for style tips and lifestyle content. The company puts significant effort into attracting customers new to online shopping, with options such as cash on delivery payments. Myntra was bought by online retail giant Flipkart in 2014 in a deal worth $280m. Two years later in 2016, Myntra then bought ecommerce rival Jabong for $70m, boosting Flipkart’s market share and its status against Amazon in India.
Founded in 2010, Paytm provides online payment and digital wallet services. By late 2018, the company held a 33 per cent market share of all UPI payments in India – a domestic transfer system launched in 2016 to facilitate faster digital payments. Paytm customers can use the app for diverse purposes, including paying their utility bills, buying mobile phone credit, making events bookings and purchasing train, bus or flight tickets. The app also offers users cashback on their purchases, Point of Sale payment functionality via QR codes, and bank to bank money transfer facilities. Owned by Alibaba backed parent company One97 Communications, Paytm currently has over 200 million users in India.
Zomato began life in 2008 as an online directory of menus from restaurants in the Delhi National Capital Region. The company soon diversified into food delivery: in 2011 it spread its services to cities across India, before launching abroad the following year. It now operates in 24 countries, including the UK, Australia, South Africa, Chile, Malaysia and the United States, offering a restaurant discovery and food delivery platform. In October 2018 Zomato announced that it had received 21 million monthly food orders in India, up from 3.5 million at the start of the year. This makes it well placed to compete against rivals such as Swiggy, UberEats and Foodpanda for dominance of the Indian foodtech space.
Dunzo is a delivery company with a difference. Along with providing its users with standard delivery services including restaurant meals and groceries, it also enables them to outsource logistical chores such as collecting laundry, dropping off something with a friend or getting an item repaired. Currently operating in Bangalore, Chennai, Delhi, Gurgaon, Pune and Hyderabad, Dunzo offers customers an easy way to get things done in congested cities. In December 2017 the company raised $12.3m of Series B funding, earning Google’s first direct investment in an Indian startup in the process.
Drivezy provides self drive car and motorcycle rentals in several cities across India. The Drivezy website is a peer to peer platform which connects vehicle owners to those looking to rent, with hourly, daily and weekly options available. In 2015 the company (then named JustRide) was selected for Google Launchpad – Google’s startup accelerator programme. At the end of 2018 Drivezy was close to finalising a $60m funding round, giving the business an expected valuation of $400m. The business recently launched RentalCoins, a cryptocurrency for the Indian sharing economy, with a vision of creating a fleet of collaboratively owned vehicles.
While this list of companies is by no means exhaustive, it gives a taste of what Indian tech businesses have to offer. From industries as diverse as food, payment and ecommerce, India’s IT sector increasingly has all the answers. For the country as well as for foreign investors, this is good news.
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