Trends that will disrupt the investor ecosystem in 2022 and how startups can leverage the opportunity
The last two years have been a watershed moment for industries across the board as they pushed organizations to build resilience and retool for the post-pandemic world. For the global startup ecosystem, this ‘great reset’ meant keeping up with fast-moving technology trends to remain relevant for their consumers and investors.
India, like the rest of the world, saw acceleration of digital transformation across multiple frontiers during this phase. Technology adaptation has percolated into Tier 2-3 cities and beyond in India.
As indicated by TRAI, the overall internet penetration in India has reached 834 million, or 62 percent, as of June 30, 2021, with rural subscribers growing faster on a YoY as against their urban counterparts.
This is well complemented with the increasing number of smartphone users in the country that is expected to reach 844 million by 2021 year-end. The consolidated impact of these dramatic shifts are forming some key trends that will shape 2022 for the investor ecosystem.
Turning passion into profits
A fascinating phenomenon has been brewing unwittingly - entrepreneurs turning passion into profits. Today, India boasts of a vibrant creator landscape, with an estimated 100 million creators spread across categories, languages and regions. Beyond big-ticket celebrities, micro-influencers and regional creators are profoundly shaping India’s digital culture.
Creators from Tier 2 and 3 cities add diversity to the content, especially in regional vernacular that resonate well with their respective fan bases.
Beyond obvious content categories that appeal to mass audiences such as food or travel, regional content creators are now exploring their niche in diverse themes that are colloquial and locally relatable.
As we make our way into an increasingly connected world, digital platforms are paving the way for the passion economy to strengthen its hold in India. Accompanied by the ease of digital payments, such platforms have opened doors for content creators to monetise their passions.
AdvertisementWith these developments, market conditions are ripe for platforms like Patreon and Substack to tap into the India opportunity which enables creators to earn direct revenue from their followers.
At present, creators are overly dependent on brands to monetise their fanbase. In the long run, this may not be a sustainable model, especially for mid to lower tier creators that are looking at diversifying their sources of income.
Build in India for the world
In the last few years, India has become the most sought-after destination for global organizations looking to scale and create a long-lasting business. This is possible because of the plethora of opportunities the Indian landscape has to offer.
India’s booming domestic market opportunity, highly skilled, and top-notch talent pool and a progressively open regulatory environment is what the country has to offer to the global companies. Various global behemoths, including the likes of Uber and Twitter, have set up their global development centers in India that are driving innovations for the world.
AdvertisementThe unique market conditions provide a great learning opportunity to global companies, who in turn use these learnings to build for the emerging economies.
From being mere backend centers, the India business landscape allows such global firms to focus on high-value activities such as intellectual property (IP) creation and building competencies around emerging technologies by leveraging product thinking to drive innovation for global markets.
India has been witnessing a sharp revival of global in-house centers and development centers of various global organizations such as Intel, Adobe, and others have demonstrated that cutting-edge products for global markets can be developed out of here.
The convergence of digital capabilities, thanks to the pandemic, availability of talent, business cases, and customers are all contributing factors to cementing India’s position as the driver of global innovation.
Unlocking enterprise value
AdvertisementThe integration of dominant tools that influence SaaS is all set to make businesses and everyday activities faster, more productive, and certainly more affordable.
India’s startup ecosystem has emerged as the third largest set-up globally after the US and China. Recent developments in China, including curbs on new-age companies, have increased VC funds’ focus in India.
Indian companies are increasingly becoming a good target customer base for companies looking at unlocking enterprise value. This is happening due to a shift in mindset from "saving costs by building it in-house" to "chasing growth by buying the best in class products". This is enabling companies to compete with the best in the world without losing the time advantage.
Indian enterprises are also increasingly open to investing in tools that enable employees to increase productivity and collaboration. This is increasingly important in a world where WFH and hybrid work are the new normal.
Changing face of social and community platforms
The face of social media is slowly changing as people on the internet are moving beyond sharing moments as a method of interaction into a way of sharing that has community at its heart. In recent times, interest-based platforms have seen a surge in user base and engagement as users find a sense of belonging.
Globally, platforms like Discord and Roblox have seen tremendous growth on the back of a growing gaming community. Similarly, platforms like Strava have grown on the back of a strong fitness community.
Many such examples can be found across various other interest areas like music, storytelling, design, learning and more. India has an average age of 29, making it one of the youngest populations globally and the most lucrative market where community-based platforms are poised to grow.
With the advent of new social platforms and rising digital cohorts, the space will become more community-specific while new-age entrepreneurs will be focused on promoting community-based platforms in 2022 and beyond. This will allow them to focus their efforts on a small number of critical audience groups, making it easier to focus on quality over quantity.
AdvertisementNote: This is an opinion piece by Viral Jani, EVP & Country Head, India, Times Bridge. The story originally appeared in YourStory.
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