Look back on 2018 - The year of re-discovering India

Last December, my husband and I took a mostly emotional decision to return to India to be more close to our families. Packing our house, 2 kids under 3 and more than two decades of memories of living in US, we ventured back to build a new phase of our lives in Bengaluru. This year has been a very transformative for me, both personally and professionally, as I skydived into the Great Indian market building products for MSMEs in India (which is a tough market anywhere in the world, but more so in India). Chasing sales, focusing on execution and battling margin pressures, sharing some learnings after gaining a few wrinkles and grey hairs.

Indian consumers are increasing digital

With more than 82% of 15+ age group of Indians owning a mobile phone and 40%+ owning a smart phone, Indian consumers are increasingly looking for information online. In a survey with more than 300 participants, over 80% of respondents (mostly urban and semi-urban) are digitally influenced in discovery and purchase of products and services. The availability of cheap data plans (been pretty impressed with Jio's service enabling me to work from mountain tops to beaches to my village) has driven an increase in information consumption via mobile media with of mobile web traffic contributing to 79% of all web traffic#.

However, Indian companies are slow to embrace the digital media

According to a Google report* only 32% of the MSMEs in India have web presence. And those with acceptable mobile experience are even less.  In my personal experience of working in MSME, even companies with INR 50Cr+ annual turnover, have poor mobile experience. This is partly due to lack of understanding of their consumer behavior along with lack of technical skills to optimize the mobile experience which is hurting the companies top and bottom lines as they have to increasing compete with the likes of Flipkart, Amazon and other large eCommerce marketplaces. In India, for MSMEs,  building for mobile first should be the top priority.

Willingness to pay for new technologies remains low

In my numerous conversations with entrepreneurs, VCs and companies, it is evident that while Indian MSMEs are aware of emerging technologies, the willingness to pay remains low. This is partly due to lack of in-house skills to learn and manage new technologies, a very short term view of ROI and a belief that it can be done manually as effectively. On the other hand, in case of large companies, the belief that it can be built in-house as effectively as the product company, keeps them from rapid adopting best-in-class and innovative products. This is in contrast to my experience in US, where Fortune 500 and SMBs alike were willing to partner to allow them to leverage the benefits of vendor products & services, while focusing on their core products & services. Indian merchants are a nifty bunch and are willing to try as long as the barriers to adoption are low. Popularity of Whatsapp as sales channels highlights the use of non-traditional sales channels by MSMEs to reach their customers effectively. Thanks to Demonitization in 2016, mobile payments are on rise and being adopted by small traders/vendors as well. (Thats my Chai wala accepting 4 mobile payment gateways for a INR 10 Chai).

Any product company focused on MSME space needs to build an MVP of MVP product with easy on-boarding and low initial cost of trial. A few good examples are Zoho and Freshworks, which used India as learning ground for global expansion.

I am very bullish on Indian B2B technology market for 2019 and believe it is poised for rapid growth, however there are significant challenges to building scalable products. This market is not for the faint-hearted.

Please like/share if you found this informative. PM me if you want to collaborate.

# Statista

*https://www.thehindubusinessline.com/news/only-32-smbs-have-online-presence-says-google/article9789672.ece