India has achieved dramatic gains in reducing extreme poverty in the past four years, according to a June report by Brookings Institution.
The number of people earning wages of less than $1.9 (₹125) per day has shrunk from 125 million in 2016 to less than 75 million. The country has also seen a corresponding increase in people moving into the middle class.
In India so far, an overwhelming majority of start-ups have focused on the upper layers of the socio-economic pyramid, but now the big opportunity is among households which have just started experiencing the feel of discretionary spends.
Out of the approximately 250 million households in India, about 100 million households today have monthly income of ₹ 20,000-40,000. Identifying and servicing the needs of Bharat—providing better access to credit, health, education and entertainment—will be a major trend of our times. Since the purchasing power of this set of consumers will be a lot lower, start-ups will need to target significantly lower price points to create a big enough market.
Entrepreneurs will need to innovate on three fronts.
Firstly, they will have to figure out what can be provided for free and is ad-supported, and what is a paid-for service.
They will also have to identify the distribution channels that will reach sufficient number of consumers in a cost-effective manner.
And finally, given that this set of consumers may not be English-speaking, they will consume content primarily over video and use lower-end smartphones or feature phones.
Teams that have a deep understanding of this consumer are the ones that will be best positioned to succeed
(Reverse Pitch is like a normal investors pitch, but the roles are reversed; that means the start-up doesn’t present its business to investors, but investors and companies pitch their business concept, challenges and the like to start-ups.)