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Why is India so Important for Startups with Global Ambitions?
Any startup, event business, or event tech platform with global ambitions will need to start taking notice of the world’s 7th largest economy – India. Not only is its economic growth projected to outpace other large emerging markets like Brazil and China, making it the world’s fastest growing major economy, but by 2030 India is set to overtake China as the world’s most populous country with a staggering 1,484 billion people. This includes a potential demographic dividend which will see 20% of the world’s working-age population live in India by 2025.
A number of factors are contributing to India’s accelerating growth
The use of the English language as a business lingua franca has played a deciding role in the rise of India’s services sector – while manufacturing in countries like China has slowed down.
Prime Minister Narendra Modi’s pro-business focus on improved education, deregulation and other reforms should have a positive effect on productivity, entrepreneurship, and the growth of higher-earning jobs. Government campaigns like Digital India are bringing high-speed internet to rural areas and increasing digital literacy, which will create new opportunities in the digital economy.
As the world’s largest democracy India has always been more free-market friendly than large, developing countries, such as Russia and China. This has nurtured the spirit of entrepreneurship in a country with over 1.5 million registered companies and 26 million SMEs. It is worth noting that India already has more companies on the Forbes Global 2000 list than Germany, Russia, or Brazil.
Notably absent from the Forbes list is privately held Flipkart, India’s US $11 billion e-commerce platform. With the world’s third-highest number of tech startups India has started producing billion dollar platforms like Flipkart and Snapdeal, as well as a host of smaller global players like restaurant app, Zomato and customer support software, Freshdesk.
Further good news for the Indian economy is that consumer spending is pegged at 59% of GDP compared to China’s 36%, making it less vulnerable to export and capital investment slumps. Nonetheless, India replaced China as the top destination for FDI by capital investment in 2015. To drill the point home, in 2015 Gujarat alone received more FDI than the Shanghai region, the commercial and financial centre of mainland China.
According to a Standard Chartered report those twin factors – high economic growth and a dynamic young population – will make India the third largest economy in the world by 2030. By then its economy will also include a huge middle class – the people most likely to spend on private events and be involved with corporate events.
The events industry is already playing a significant role in India’s economic growth
India is no stranger to massive events. Kumbh Mela, the 12-yearly mass Hindu pilgrimage of faith in which Hindus gather to bathe in a sacred or holy river is considered the world’s largest congregation of religious pilgrims. In 2013, an estimated 120 million people visited the Maha Kumbh Mela in Allahabad over a two-month period. Then there’s the International Kolkata Book Fair, the most attended book fair in the world, attracting more than 2 million visitors annually.
EEMA (the Event and Entertainment Management Association of India) has estimated the size of the organized event industry at about $886 million in 2016 with a 15% annual growth rate. That excludes India’s massive wedding industry that could be worth anywhere from $25 to $40 billion and which is apparently growing at an astonishing 25% per year. To put the scope of the market into perspective – the average middle-class Indian wedding budget runs to about US$34,000, on par with its American counterpart, albeit with much more bang for your buck.
Event Tech is making a growing impact on the Indian events industry
The wedding industry in India is so large and lucrative that Veristrat, a San Francisco-based web technology firm, developed a wedding app, Shaadi-e-Khas, especially for the Indian market. In general the boom in the Indian events industry has provided fertile ground for several event tech startups, with Ahmedabad-based events platform Hubilo, recently securing angel funding from a group of investors that included Freshdesk CEO and co-founder, Girish Mathrubootham. All this activity resulted in another positive spin-off; it created a receptive audience by introducing Indian consumers to the advantages of digital platforms and apps.
The human race is known for its short and selective memory. We forget that until the 17th century India had the world’s largest and most advanced economy (25% of global GDP). And it looks like the pendulum is getting ready is to swing back in India’s favour. Rapid economic growth – tick. Burgeoning event industry – tick. Homegrown event tech market – tick.
As Indian digital infrastructure grows and disposable income increases, more and more opportunities will arise for global tech companies, and especially event tech companies, with the right service or product offering. The trick is to start building those mutually beneficial relationships right now.
For more material from Marc Steyn visit Eventerprise.com
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