3 min read.Updated: 04 Jan 2016, 01:58 AM ISTLivemint
In 2016, entrepreneurs in the consumer technology space will continue to transform lives of consumers in India
From hailing cabs to ordering food, from buying goods to ordering services online, 2015 was the year when cheaper connectivity and growing penetration of smartphones showed how the Internet can transform businesses and lives. In 2016, entrepreneurs in the consumer technology space will continue to transform lives of consumers in India.
TRENDS TO WATCH
End of easy money
While India remains one of the most attractive avenues for venture capital and private equity firms to park their money, 2016 might not see the easy money days that 2015 saw. Experts are anticipating investments to be accompanied by a lot more thought and deliberation than in 2015. There are also expectations of a correction in the hyper-funded and hyper-valued e-commerce market, which is likely to trigger consolidation in the space.
Clarity in regulatory environment
2016 could see some clarity from the government on the definition of “marketplace" and what constitutes retail and wholesale trading. This could be a defining move for the e-commerce sector that has already attracted billions of dollars of capital. Offline retailers have long alleged that e-commerce firms are getting foreign capital through illegal routes.
As technology continues to disrupt the payments ecosystem in India, 2016 will see some fierce competition in the digital payments space as unicorns like Flipkart, Snapdeal and Ola jump into the payments space with their own mobile wallets. The companies will lock horns with payment firms such as PayU, Paytm and traditional banks to grab market share.
Emergence of online brands
As horizontal e-commerce—marketplaces that sell everything—saw clear winners emerge during 2015, 2016 could be the year of vertical e-commerce firms, online portals that focus on specific categories of products. One can expect to see interesting brands taking centre stage in the space as the year progresses. These could be promising brands such as Chumbak and Jaypore or vertical firms such as Yepme and Zivame.
2015 saw some preliminary activity in the financial technology space with start-ups emerging in lending and credit-rating areas. As financial lending—institutional or peer-to-peer—remains under pressure, new companies will be seen coming up with newer technologies and algorithms to fight traditional banks in 2016.
2015 attracted some serious money to hyperlocal start-ups and Grofers, run by Albinder Dhindsa, emerged as a serious contender in the space. Backed by Japan’s SoftBank, Grofers has built a strong war chest of venture funds and is all set to lock horns with large e-commerce firms such as Flipkart and Snapdeal, which announced their hyperlocal e-commerce plans only recently.
As mobile wallets disrupt the e-commerce industry in India, Paytm’s wallet, as well as payments bank licence, gives it a head-start over several payment service providers in the country. The wallet’s increased adoption makes this Alibaba-backed company a serious contender in the e-commerce battle. And while it continues to gain ground in e-commerce, all eyes will be on Paytm’s strategy around its payments bank, which is expected to roll out in 2016.
While the company has emerged as the largest cab aggregator in the country, in 2016, one needs to keep a close eye on founder Bhavish Aggarwal’s ambitions of making Ola a digital commerce behemoth. The company is making a serious push into digital payments with the launch of its mobile wallet, Ola Money, food delivery through Ola Café and even grocery delivery through Ola Store.
Flush with funds, the Bengaluru-based hyperlocal delivery firm is one of the front-runners in one of the hottest sectors of recent times. The company, backed by Sequoia Capital and Nexus, is close to getting fresh funds from DST Global and is fast expanding its presence across the country. With consolidation anticipated to go up during 2016, companies such as Roadrunnr, with sufficient cash in the bank, will have clear advantage over others.
The company is looking to create a one-stop destination for all kinds of healthcare services in the country. A badly organized healthcare sector presents a massive opportunity to an ambitious company such as Practo, which is trying to build a global health brand out of India. The company, which already operates in India, the Philippines and Singapore, plans to expand to 10 countries including Brazil, Turkey, Mexico, Indonesia and Malaysia by the end of 2016.