Tag: Business

I recently attended a talk by Nandan Nilekani, the Chairman of Infosys. Nandan is also well known for being the first Chairman of UIDAI, which developed Aadhar the unique id for every Indian.

In his address, Nandan talked about the importance of scale for a business – especially a business which is B2C.  For a business to scale, it is important to be in a market where the demand is huge & growing. According to Nandan, demand which typically grows organically, can sometimes get accelerated. Some of the ways in which demand for digital services in India has got accelerated are as follows:

• Demand created by government policies
  • As has been well documented, demonetization in 2016 has caused a huge demand for digital payments in India. UPI which went live in April 2016, is now processing over 2 billion transactions per month.
  • Another example was the implementation in 2017 of GST in India, because of which over 11 million businesses had to go online – this has created huge demand for various products including accounting and tax software.
• Demand created by technology
  • The launch of Jio, drove down the price of mobile data in India, thereby adding millions of active users of the Internet. India’s average cost per 1 GB of data is 9 cents compared to 8 dollars in the US. This in turn, has led to creation of huge demand for short-form videos.
• Demand created by the Covid Pandemic
  • Hopefully we will never have a pandemic again. However, the pandemic has changed the consumer behavior in India for various online services:
    • Online learning – millions of children, parents & teachers have got comfortable with learning digitally
    • Telemedicine – while telemedicine pilots have been ongoing in India for several years, the pandemic forced patients and doctors to use teleconsultation as the primary mode for several months.
    • E-commerce – Consumers across age groups as well geography have experienced e-commerce during the pandemic.
  • Push to Pull – Before the pandemic, digital companies in India were ‘pushing’ people to experience online through discounts. The pandemic has changed that to a ‘pull’ thereby bringing down the cost of acquisition of a consumer. This will enable digital businesses to become profitable and sustainable sooner than before.

This is a great time for digital entrepreneurs in India. The demand has scaled dramatically and if entrepreneurs can execute well on the ground, we are likely to see several profitable digital enterprises.