Made for India: 3 startup trends I expect to see in 2017

Slowly, the realization is setting in that copycat models aren’t ideal in India. Photo credit: HD wallpapers.

In 2015, there was more talk in India about raising capital than about building businesses with differentiated models. Most startups raised money framing their business model on a global equivalent, and then burned that money in a quest to show massive growth. 2016 curbed that enthusiasm. And now, slowly, the realization is setting in that copycat models aren’t ideal in India. In fact, in order to truly succeed long term, business models have to be designed for the Indian market.

Here’s my big prediction: 2017 is going to help shape the era of #MadeForIndia.* The hangover from 2016 will have a positive impact on the culture and priorities that drive most entrepreneurs – and their success will not solely be dependent on boatloads of VC money.

In the consumer technology space, this is going to change how consumers are wooed. The time of massive discounts and unwarranted marketing spend will subside. The new year will see consumers being acquired through innovation in product, pricing, convenience (beyond cash-on-delivery or free delivery), and service. If 2015 was the year of capital invested, 2017 is going to be the year of customer experience.

A few spaces will have an advantage. This is where I think businesses will flourish in the consumer-based technology industry in 2017. With a slight twist to my regular predictions, this year it’s not going to be just about how much money these verticals raise but if companies in these areas are able to scale. Let’s see if we can identify that at the end of the year.

1. Fresh foods

Photo credit: Pixabay.

Shopping for unbranded products is always a hurdle. Without brands, no one takes responsibility for the quality of any product. And in the perishable food space, that’s dangerous. Choose any meat, fish or vegetable. There is no way of telling how old it is (or how freshness is maintained), where it was grown, what pesticides were used, or how it was transported from one middle man to another. There is no way of identifying quality, nutritional value, or even the right price. Every consumer suddenly has to be an expert on raw food in order to grocery shop. And that’s why, for the majority of Indians, the quality/freshness/nutritional value/supply chain of a tomato is judged solely on its redness and how it feels when you poke it.

The real competition is the local fish vendor. And a prevailing mindset. I’m ready to bet we can take them both on.

Poking a tomato is fine in the West where all produce is branded, either by an external producer or the supermarket’s private label. Brands give consumers comfort that they don’t have to evaluate the product they are buying and instead can trust the brand. That brand promises quality and consistency. Beyond that, if consumers want to poke away in order to choose one tomato against another, that’s fine. But in India, the poke is going to determine little of anything.

Look how we buy our meats and vegetables. Look at where we go to buy them. And this is the food consumers buy most often. You need tomatoes, onions, meat, or fish every other day. This is a core part of life for every consumer. And yet, vendors are chosen purely on the basis of tradition, proximity, or advice.

But this can change with good, strong brands. Especially in a country where there aren’t any competing brands. The real competition is the local fish vendor. And a prevailing mindset. I’m ready to bet we can take them both on.

Building trust in a brand takes time and effort, but when trust is built, it creates a massive opportunity. And this is the opportunity available with perishable food. There is an entire generation of people in India that cares less about tradition and more about quality, nutrition, price and convenience – the millennials. Consumers at that age group are just beginning to form their grocery habits either because they are living on their own for the first time, wanting home cooked food, or having children. And this is the target market for many of the new online brands.

Several companies across food groups have been working hard to build a proof of concept over the past few years. In 2017, I think we’ll see these companies mature, with solid sourcing, refrigerated supply chains, brand promises, and business models designed for customer convenience.

2. Subscription businesses

3. Original video content