This amazing information produced is neither imperative nor imaginative or not of less importance even as 2016 comes to a close as such start-ups are hopeful that the New Year will bring in some joy on the whole.
Previous two months of 2016, were a dampener for the Indian start-up ecosystem in hyper-local, food tech, software and investment domains as such it was good to know much about start-ups right now.
Meanwhile grocery e-tailing and payment wallets gained this year due to demonetization drive by Modi government but other segments of the start-up world have floundered.
Start-ups in 2017 might be more optimistic than 2016. Here are some trends we have forecasted:
1) Shutdowns in e-commerce: While it was observed that demonetization curbing consumer spending sentiment and GMVs expected to fall for almost all commerce players, the ones who were sitting tight with less cash will be the first to fall in such cases that corresponds the decision on Narendra Mod’s government after all. Hence, investors likely to be able to clinch to their purses by piling up their programmatic planning till the consumer sentiment gets back on track on a new note. Entrepreneurs online with retail space might face a tough 2017, as they will look to cut costs and save on their last penny to survive the dugouts. However, the outlook for 2018 is positive if Indian GDP growth rate gets back on track in any case.
2) Rise of the Fin-tech: Right from providing platforms to e-wallets for the credit rating agencies and payment gateways, the whole financial technology place expected to gain on account due to currency ban. As such Payment wallets already witnessed a rise in download and transaction numbers overall in this process of demonetization. Expecting growth for being the government pushed for discounts across board for those who pay digitally for rail tickets, fuel, toll fees, and retail goods as well. New investment stakes expected by global investors in these placements even as the smaller companies will consolidate with big ones in future.
3) Analytics and Big Data: To the right customer targeting will become super imperative. Online hotel of companies or travel services aggregation might look to target only the buyer who is interested than wasting dollars on an irrelevant customer, who will be of no benefit. Big data and analytics to play a key role as more customers will pay digitally, which is importantly beneficial. Large binary footprint will lead to a huge rise in targeted behaviour by all brands on the whole.
4) Lessening of cash discounts: While struggling online firms insisted to raise cash to sustain operations, expecting huge customer discounts will be a far-fetched dream, except in the online payments and wallets space, which corresponds as this change brought in. Please put out of your mind that the 30 percent or 50 percent cash discounts on that mobile phone or pizza delivery, where wallets and government agencies will continue to run cash-backs and discounts. OTAs are more likely to run cash-backs in order to sell unsold inventory as travel sector is impacted due to demonetization as such.
5) Valuation deals: Start-ups on a late scale valuation might be problematic as investors have become cautious at present. Although long term prospects of Indian economy look bright, internet entrepreneurs have a hard time justifying declining sales or lower downloading numbers to investors in their own understandings. While in the short to medium term, large deals look bleak but seed deals in start-up space are likely to continue as angels might want to take early positions at lower valuations. Large mergers and acquisitions more likely to get into a deadlock due to lower valuation proposals compared to 2015 and 2016, where there was not much of scope to cut down values on to build up economy.
6) Increase in smart-phone and Internet penetration: The digital developments taken on by the government towards cashless payments, more and more Indians will adopt smart-phone based payment methods for ease of purchase as well by the government. Merchants are already buying smart-phones to download wallets to keep their business move forward. The launch of free 4G service from Jio has catapulted the push for mobile broadband as such. All this will increase India’s smart-phone penetration (about 350 million phones now) drastically will see new heights of the buyers.
India will see rapid implementation of the internet, making this market mature for digital entrepreneurs for years to come, right from 2017. It will lead to a rise in consumption of on demand videos on the second screen as well as Payments Bank launches in 2017 are also expected to intensify mobile linkages.
7) Large scale consolidation expected: Investors on a portfolio consolidation expected to be enforced with hundreds of start-ups also expected to flounder for lack of funding in early part of the year, 2017. Investors backing entrepreneurs in similar segments are more or less likely to push for mergers to get enriched with good outcomes. Online retail, food tech, healthcare may be the key focus for mergers in India. However, those start-ups who survive the trenches of 2017, and come out heroic will have a last laugh. India’s digital economy is expected to see a steep rise in second half of 2017 which will continue towards 2018 and beyond.
[Top Image – Shutterstock]