Can Indian Startups Compete Globally?

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India is the land known for its varied culture, huge population, and exquisite cuisines. Over the past few years, India has also emerged as a bustling tech service industry and a lucrative, rapidly growing market. 

Today, India is home to more than 41k startups (1) working in different industries and the world’s third-largest startup ecosystem. Notably, the country has more than 50 unicorns as of July 2021. 

The country is also no stranger to attracting foreign investments. Even though it struggled massively amid the COVID-19 crisis, Indian startups have secured more than 12 billion USD funding from January to July 2021 (2). According to the Economics Times report (3), the average funding size has also increased to 25.21 so far, from 14.94 million USD in 2020 and 18.41 million USD in 2019. It indicates the rapid growth of the Indian startup ecosystem. 

However, the bigger question is can Indian startups compete in the international market and take on overseas startups?

There Some Really Great Indian Applications

There is one thing I have been asked over and over again is that there are no great apps in India. From Ola to Zomato, all big names in our startup ecosystems are copied from other companies, ideas already being demonstrated in other countries and markets. We don’t have anything unique. 

Another thing that I have been told several times is the reason why most of us have non-Indian brands and apps is that there are not great apps in India. However, I would like to highlight several reasons why we often choose non-Indian counterparts over home-grown ones. It also often varies from company to company and apps to apps.  

All things aside, despite what people have told me repeatedly, there are notable Indian apps. While they may not have reached the massive scale of their international counterparts, they have gained attention. It includes apps like Epic, an open-source browser designed for Indian users; Hike Messenger, which is in the messaging zone as WhatsApp; Newshunt, a news app that collects information from different publications and newspapers; Shifu, a to-do app, and Iris, maybe the first Android alternative to Siri (4). Iris-Siri is spelled backward.  

Notably, in 2016, an Indian brand even tried to take on Android, naming it Fuel OS and a phone – the Creo Mark I (5). 

India has enjoyed the reputation of being a software power in the tech market. Did you know that a person of Indian descent developed Hotmail? And, one of the applications that Steve Jobs recommended for the iPad was Pulse, an app made by Indian developers which were since acquired by LinkedIn and then Microsoft. Recently, YouTube also acquired an Indian platform Simsim

In 2018, the iPad of the Year was Froggipedia; it is an app that allows students to conduct dissections without harming any living beings, developed by Designmate, an Ahmedabad-based entity (6). 

 

Then, Why Aren’t They Globally Competitive?

While there are some excellent apps in India, none have scaled the kind of heights like Facebook, WhatsApp, Instagram, or even Chinese TikTok. Some apps like Ola, Wynk, Zomato, and Paytm have done well, but they are popular as service providers for convenience rather than being addictive. 

It is noteworthy that some of India’s popular platforms have benefited from Government moves and the support of network operators. Paytm, for instance, received a massive boost when the Indian government went for demonetization a few years back. Similarly, several apps like Wynk are only popular because subscribers of telecom operators like Bharti Airtel and Reliance Jio subscriptions offer access to their services free of cost. 

A friend of mine once highlighted that “while Zomato is useful, I won’t use it unless I need it.” Another had told me that she only uses Wynk because it is free with her Airtel connection to download songs that she heard while streaming on YouTube or Spotify. 

It is not a bad thing if we look at it from one angle; however, if we see it from another, it is pretty curious, especially considering India’s track record of software excellence. India should have its own app superstars by now. 

So, why hasn’t that been the case?

There is a feeling in the tech community that Indian app developers are short for innovation. In an excellent story by Nimish Dubey (7), a developer had anonymously confessed that “There is a tendency to copy-past.” “We are rarely the first into anything. Even when India had banned many Chinese apps, including TikTok, everyone made its alternatives only because it was popular and sadly got banned. It didn’t come from our innovation.”

Yes, you probably have heard such sweeping but common sentiment. 

“We once had a Hero Honda motorbike advertisement that said ‘fill it, shut it, and forget it.’ The ad highlighted the mileage and said that we only have to fill the tank once and forget it. Today, there is a similar approach among the Indian developer community – ‘code it, sell it, and forget it.’ They focus on pitching a decent prototype, get investors interested enough to fund it, take the cash, and move out,” told an executive from a very high-profile company to Dubey. 

“Their aim is not to build communities or change habits of users, but to cash in quickly and move out. We can’t make apps like Instagram or TikTok with such a straightforward approach.”

Simultaneously, it would also be unfair to blame it all on the developers because it is also true that getting funds for a unique product can be a pain. According to a developer, “The investors would show more interest in something familiar and do well in the market.”

“Even if we show them an innovative platform, we get feedback like ‘it is nice, but can you do something like Candy Crush?’ It isn’t very encouraging. If developers need capital, since making an app can be quite expensive, they need to show investors something that has worked in other markets; there are very few risk-takers. However, the media and reviewers roast us if we do something similar that others have already done,” added the developer. 

And we believe that this state perhaps tells us why there was an explosion of Temple Run clones a few years back and the recent wave of TikTok alternatives. Moreover, their success is relatively limited. 

Read Also: Insights from India’s Fastest Growing Companies 2021

 

Why Do Indian Startups Need to Broaden Their Horizons Internationally?

Over the past year, it has been pretty hard to keep up with the skyrocketing growth of the Indian tech sector. While the flow of capital in the tech space is welcome, we cannot ignore how most Indian startups are focused on the local marketplace. And it begs the question: are Indian startups missing out on international opportunities by focusing on the domestic market? 

Indian startups have a competitive advantage in the present scene since investors globally know about India’s attractiveness as a marketplace. However, they do seem to lack a conscious strategy when it comes to growing internationally (8910). 

Undoubtedly, the budding entrepreneurs of India need to add certain flavors in their offerings, a strategy, a position to differentiate themselves and create something unique and interesting with a long-term vision to compete in the global market. If a startup is lacking in any resources, it should start making up with courage and creativity. The time is now for our startups to disrupt the traditional forms and compete with their international counterparts.

If the entrepreneur is confident about the idea and the product and believes that it can make a difference, go for it. It is alright; they don’t need to be the next Facebook or Google, they only need to be themselves and offer the best, and it would be enough to compete with other players. 

Remember how our ISRO scientists executed our ambitious Mars mission, Mangalyaan, for only 74 million USD (11). For comparison, NASA’s Mars probe cost was over 651 million USD; even the budget for the movie, The Martian, was 84 million USD!

So, there is no doubt about the potential of us Indians; we need to have enough courage and creativity to make the globe our playing field.  

And it is not like there are not Indian startups expanding internationally; there are plenty and successful at that too.

Several companies like BYJU’s, Ola, OYO, Zomato, Razorpay, Cleartrip, and many others are operating successfully in foreign markets and expanding their reach (12). And, how can we even forget about Freshworks, a US-based Indian startup that has extended its services to more than 90 countries!

All in all, India is as well placed as the US, China, Russia, Israel, or any other country to take advantage of the evolving market. All that we need is execution. – Explained later.

Read Also: OTT Bundle Subscription Getting Popular in India

 

Tapping Into Global Markets is The Need of the Hour

There is no doubt that a startup community that allows Indian startups to gain a foothold in the domestic market while also connecting them with the global players can propel the growth of the Indian startup culture. 

As we mentioned, Indian startups seem to be insistent on catering to local consumers. It is time they start thinking beyond home shores and make strategies that can cater to international markets (13) with an eye on the future instead of concentrating solely on short-term results.

“All the World’s a Stage” – Shakespeare.

The same thought applies to Indian startups as well. For startups, access to the international market can solve several pain-points as it lets them observe, analyze, and adopt, not only copy, new technologies of the developed markets much earlier in their growth phase, which can allow them to stay ahead of the curve in multiple ways (14). it includes:

  • A competitive heard start with relevant expertise
  • Multi-variant customer group
  • Risk diversification
  • Rising above isolated barriers and adopt more sustainable business models
  • Increased pilot testing abilities

In today’s era, technical innovation requires superseding boundaries to get success. Digitization, global e-commerce platforms, and social network advancements have brought us even closer to the transformation. 

Not only will going international heighten Indian startups’ awareness of global tech transformation, but it would also help India, as a nation, to march ahead into global innovation and realize its entrepreneurial potential.

Read Also: Tata Motors: The Avant-gardist of India’s EV Journey

 

Strategies to Adopt Before Pursuing Overseas Expansion

As per a Nasscom report published in January 2021 (15), there are few aspects startups need to keep in mind before going for international expansions:

  • Keeping “the right strategy” and priority sequences in place
  • Setting the strategic and financial objectives of the expansion and the means to monitor the progress
  • Developing skills needed to plan and execute tapping into a new market
  • Acknowledging the differences in the new market in terms of product, culture, and regulations
  • Finding a strong team to own the success of the international expansion

Read Also: Hacks to Finding New Business Ideas

 

But, Can Indian Startups Scale? 

Not only can our startups grow strongly in India, but the country is also well poised to scale globally. – Remember I said I would explain.

As per the same Nasscom report, here are why Indian startups can compete globally. 

  • India is a Megadiverse Nation: The presence of multiple income groups across different tiers of cities, each characterized by a state, is a big test any “big enough” Indian startup face. It is because what works in Delhi needs some tweaks for Mumbai, and one may have to make significant changes to sell the same in Coimbatore. 
  • India Has a Huge Talent Pool: Contrary to popular belief, India has improved the quality of the fresh talent with the latest technical skills like ML, AI, which offers a competitive advantage to India-based startups.
  • India is the World’s Second-Largest English Speaking Nation: It means a product made in India is easily scalable in most parts of the globe.
  • India has a History of Entrepreneurship and Establishing Businesses Overseas. 
  • The Indian Diaspora is Spread Worldwide. 

Even in a minute and fragmented state, Indian startups ARE competing globally today. We believe this decade will offer a never-before opportunity for Indian startups to go global like never before.

Read Also: Millennial Billionaires’ Top Industries, Investment Assets, and Uphills

 

But, We Still May Not See Any Made in India App Going Global, Until

There is one big challenge which is stopping Indian startups from going global is the limited access to risk capital. 

Expanding risky ventures in overseas markets needs huge capital and low-cost, and highly patient capital. As of now, Indian companies don’t have access to such funds (16). 

In addition, unlike its Chinese counterpart, the Indian government has never encouraged its businesses to go overseas. In fact, it is frequently frowned upon and seen as a potential capital flight. It is also a personal liability all the way in India; take a look at Indian’s largest companies, most of them are family-owned, and what happens if any of them go bankrupt. 

In the Indian startup space, while venture capitalists have invested billions of dollars, most of them have been copied ideas. The concept is clear: tap the Indian market with a model that is proven somewhere else. Why invest in something for the global market when we can replicate models that are successful elsewhere. Let’s not even talk about the risks involved with that too. 

In short, until the Indian entrepreneurship culture achieves the maturity and risk-taking profile, as we see in Silicon Valley, we won’t see many Made in India App going global. 

Read Also: India Amongst the Superpowers of 2050

 

But India Can Get Killer Apps in the Long Run

Now, everything we have discussed so far seems to be running a vicious circle that is strangling our startups’ evolution. It is not like we don’t have enough consumers, opportunities, or smart developers; it all exists.  

And if we believe in ourselves and our sources, it exists in abundance.

However, the bigger challenge is getting them aligned and synced. 

“We need someone who is not afraid to take a hit and look to go for a long run. Facebook was not built in a day,” said Dubey’s developer friend. 

He admits that creating a global success app requires huge investment, major marketing efforts, and server space, apart from making the app itself. Yet, he stated that “In the current scene, investors are ready to back it for a while, it can initially get downloads, and people can be happy. However, the issue is to sustain that momentum. And for that, we need time, money, and innovation.”

And that sums our point of the day: can Indian startups compete globally? The answer is, we have everything but synergy to achieve it. And considering the amount of competition out there, no one can afford multiple false steps. 

There are excellent alternatives for everything out there, and developing something from scratch would take a lot of money, effort, and time. 

It is tough and won’t and can’t happen overnight. It will take time. However, if all parties involved realize that they need to cast aside short-term failures to get long-term success, Indian startups can get their Made in India killer platforms. 

Does it sound difficult to believe? Let us know your opinion in the comments below!

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Rucha Joshi, currently managing a team of over 20 content writers at TimesNext is fueled by her passion for creative writing. She is eager to turn information into action. With her hunger for knowledge, she considers herself a forever student and a passionate leader.

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