In today’s evolving business landscape, everyone’s focus seems to be on ‘Bharat’. The term has become a buzzword signifying a movement towards connecting with the vast majority of India’s population, approximately 86%, who reside in Tier 2 and beyond cities. As businesses aim to enlarge their total addressable market (TAM), their vision extends beyond raising substantial capital from venture capitalists. It’s also about tapping into untapped markets, which is both strategic and practical.
Projected growth rates indicate that rural India’s per capita income is set to increase 4.3x from 2019 to 2030, outpacing urban India’s predicted growth of 3.5x. This trend is likely to significantly enhance consumption patterns in these areas, providing a fertile ground for businesses.
Another factor to consider is the untapped potential of non-English literate internet users. Out of the 700 million internet users in India, a staggering 500 million fall into this category. For businesses, this presents an opportunity to create and offer support and content in regional languages, thereby reaching out to an audience yet to fully experience the digital world.
Many companies are already tapping into this potential. For instance, KukuFM provides podcasts in seven Indian languages, and Meesho, an e-commerce platform, caters to Tier 2+ towns in eight languages. Similarly, Apna, initially conceived as a LinkedIn for blue-collar workers, offers its services in 11 languages.
Furthermore, the people in smaller towns have shown a propensity for experimenting with new brands and products. They harbor a preference for ‘Made in India’ products, creating a unique opportunity for emerging brands to challenge established players. Interestingly, celebrity endorsements may not be as effective with this audience; local influencers hold a higher degree of trust amongst these communities. About 84% of survey respondents in Tier 2+ cities showed a preference for small-time YouTube vloggers, compared to 65% in Metros.
This shift is leading to a boom in India’s creator economy. Despite having a staggering 80 million content creators, there are only 7,000 YouTube channels with over a million subscribers. However, this number has doubled since 2021, thanks to affordable data rates and the rise of the influencer economy. Companies are leveraging influencers for marketing like never before, with spending on influencer marketing anticipated to surge to an astonishing $3 billion by 2030.
The impact of this on the economy is already becoming visible. For instance, YouTube’s creator ecosystem contributed over ₹10,000 crores to the Indian GDP in 2021, resulting in the creation of over 750,000 full-time equivalent jobs.
In the tech world, Software-as-a-Service (SaaS) is becoming India’s new gateway to the global market. Indian SaaS companies, currently holding a 5% share of global revenues, are expected to see this figure rise to 10-12% by 2030. These firms offer an array of products, from customer support helpdesks to HR management tools, with 75% of their revenue generated from global customers.
The pandemic further boosted this trend, as businesses worldwide turned to cloud software to facilitate remote work. This shift has seen the number of SaaS unicorns in India rise from just 2 in 2018 to over 20 in 2022. Notably, 77% of investors are looking to invest in the SaaS sector, signaling an optimistic future for this domain.
In conclusion, India’s ‘e-Conomy’ presents a dynamic landscape filled with promising opportunities. The focus on ‘Bharat’, the rise of the creator economy, and the growth of the SaaS sector collectively signify a revolutionary era in India’s digital transformation journey.
