India is becoming a land of digital opportunities for home-grown tech companies – as has been evidenced by the spate of successes recently
With the right enabling environment for growth, India is fast becoming a land of digital opportunities for home-grown tech companies – as has been evidenced by the spate of successes recently.
According to the ‘Thematic Research: India Tech’ report, US giants Alphabet, Amazon and Walmart currently dominate the ecommerce and mobile payment market in India. However, they face regulatory and social challenges. Amazon has already faced allegation of killing smart businesses, and the 2019 ecommerce regulations prevent both Amazon and Walmart from managing their inventory and stocks in the country.
“Digital opportunities have already disrupted the Indian e-commerce market by bringing the kirana stores online, and Indian unicorns have also eaten up global players’ share in areas such as online food delivery and online hotel booking.
Local Indian tech companies such as these are being promoted by the government, which are also regulating competition by foreign players,” said Swati Verma, Associate Project Manager for Thematic Research at GlobalData.
Earlier this year, Indian Prime Minister Narendra Modi said that Indian Institutes of Technology (IITs) should aim for the next level and transform into indigenous institutes of technology, stressing the need for home-made innovations that are environment-friendly, durable, and disaster-resilient.
Prime Minister Modi, while addressing the 66th convocation of IIT-Kharagpur in West Bengal online, underscored that India can become a major player in the field of science and technology in the post-pandemic world. “The scenario has changed in India in the 21st century. The needs and aspirations of the nation have also changed. Not just Indian Institutes of Technology, IITs must take it to the next level to indigenous institutes of technology,” Modi told students of India’s oldest IIT.
Analysts have noted that Indian local players – whether with the heft of Reliance or small-town start-ups – are growing stronger and can now compete against foreign tech giants, which previously reaped the benefits in ecommerce, digital payments, social media and video streaming. The clash, according to Verma, is also leading global players to offer a more India-specific service.
The Indian government, for instance, is also taking steps to regulate the mobile payments industry.
According to new laws, no single mobile payments player can account for more than 30 per cent of the total number of transactions. This gives some respite to local mobile payments players such as Paytm, Axis Bank (Freecharge) and MobiKwik competing against Alphabet’s Google Pay, Walmart’s PhonePe, and Amazon Pay.
“The pandemic has boosted demand across India’s internet and media sector. Global players such as Facebook and Twitter dominate the country’s social media market, and, while no domestic players are competing strongly against the tech giants, a few Indian start-ups have benefitted from clashes between global social media apps and the Indian Government,” said Verma.
Indian video streaming players such as Star India, Zee Entertainment and Sony Pictures Networks India (SPN) had the advantage of Indian-made content in Hindi and other regional languages. These stood strong against Netflix and Amazon, forcing these players to place greater focus on regional-language content.