INDIA INSIGHTS

BY INDIA QUOTIENT
March 2024
 INDIA QUOTIENT: EARLY STAGE SPECIALISTS

We love new categories that are unique to India “Great insight comes from
We inv ested in Sharechat when ‘Indian Social’ was not ev en a
seeing something as odd
category. and finding out why.”
We did the same thing in fintech with Lendingkart, in brands
with Sugar and in software with Vyapar. -Philip Kotler
We hope this compilation of insights will spark the imagination
of founders who are building for India.

It’s nev er too early for us to inv est. Write to us:

letstalk@indiaquotient.in

INDIA INSIGHTS BY INDIA QUOTIENT 02

INDEX: 20 THINGS ABOUT INDIA

1. Marketplaces 04

2. Fintech in the Land of ‘Zero’ 25

3. SAAS 46

4. Microtransactions 67

5. Consumers 88

6. Digital Public Infrastructure 110

7. Two Wheelers 131

8. Food 152

INDIA INSIGHTS BY INDIA QUOTIENT 03

20 THINGS ABOUT
MARKETPLACES IN INDIA
 WE HAVE ALWAYS BEEN A COUNTRY
OF TRADERS
● The “bania” or trader community is 5,000 years old

● Traces to Maharaja Agrasen, king of a city of

Traders (this is where 'Agrawal' comes from!)

● That’s why if your last name is Bansal/ Agarwal, VC

valuations jump 2x ☺
A row of shops in a street marketplace, Mohenjo Daro (2,500 BC)

Source: Google Images; Encyclopedia.com 20 THINGS ABOUT MARKETPLACES IN INDIA 05

 ORGANIZED MARKETS THAT ARE MANY MILLENNIA OLD,
BUT RULED BY MOM & POP OUTFITS

Village markets Railway Station Markets

Cattle Market Chor Bazar (stolen goods market ☺)

There are 700 festivals in India. Customers want to shop on

Temple Markets auspicious days – both online and offline Khau Gali: Food streets

Source: Google Images 20 THINGS ABOUT MARKETPLACES IN INDIA 06

 Sadar Bazar Delhi
(Toys market)
Mullick Ghat, Kolkata
(Asia’s largest flower Market)

Johari Bazaar, Jaipur

(Handicrafts market)

MARKETS MATURED TO
BECOME HIGHLY SPECIALIZED Ima Market, Manipur
(>3500 W omen Shopkeepers)
Zav eri Bazaar,
Informal brands, distribution networks and Mumbai (Jeweller’s
market)
financing systems still drive these marketplaces Laad Market, Hyderabad
(Bangles Market)

Siv akasi
(Firecrackers Market)

20 THINGS ABOUT MARKETPLACES IN INDIA 7

 WE SKIPPED MALLS LIKE WE SKIPPED LANDLINES; AND WE
LEAPFROGGED TO ONLINE

● 13M Kirana stores account for

90% of food/ grocery retail
INDIA

● Malls restricted to metros +

modern retail + international
brands; successful only if they
hav e a mov ie theatre
USA

+ +

Source: Times of India 20 THINGS ABOUT MARKETPLACES IN INDIA 8

 BEFORE ONLINE MARKETPLACES, WE HAD CLASSIFIEDS: THEY HAVE MATURED
Interestingly, most online classified biz of scale today are still from the Internet 1.0 era. No need to mess with perfection, apparently

2,738 Cr 986 Cr. 1165 Cr

847 Cr.
~1.2X
~1.9X
1,389 Cr
~2.7X

429 Cr.

FY18 FY23 FY18 FY23 FY18 FY23

EBIDTA: ~8% EBIDTA: ~23% EBIDTA: ~35%

Note: Numbers in charts are revenue for the year

Source: Moneycontrol 20 THINGS ABOUT MARKETPLACES IN INDIA 9
 ONLINE RETAIL STARTED FROM METRO CITIES – AND GROWTH WILL
COME FROM TIER 2/3
INDIA ONLINE SHOPPERS ECOMMERCE AS A % OF RETAIL SALES
1,360m 700m 630m 190m

86% 80% 79% 57% 47%

31%

16%
14% 14%
16%
6%
27%
China UK USA Singapore Japan India
9% 11%
7%
11% 10%
7%
• $70b India online TAM with just 6% penetration
India pop Internet users Smartphone users Online shoppers
• 60% of orders are from tier 2/3
• Tier 1 cities growing at just 10% v s 50%+ for T2/3
Metro Tier 1 Tier 2

Source: RedSeer, eMarketer, Deloitte, Bernstein 20 THINGS ABOUT MARKETPLACES IN INDIA 10

 Will we go from here…
7
4
6

11 I ndia e-comm
today 52

FLIPKART/ AMAZON – GLORIFIED

ELECTRONICS SELLERS NOW 20

BECOMING MARKETPLACES? Consumer electronics Fashion Food & FMCG

Furniture Beauty & personal care Other

● Flipkart/ Amazon went from selling only books to

… to here?
selling mainly electronics to selling everything 7
5
23
10

● 70-80% of Flipkart’s Big Billion Day sales are mobiles

Global e-comm
and other consumer electronics! today
14
21

20

Consumer electronics Fashion Toys, Hobby

Food and bev Beauty & personal care Furniture
Other

Source: Redseer, Statista, IQ data 20 THINGS ABOUT MARKETPLACES IN INDIA 11

 INDIA ONLINE HAS VERTICALIZED FASTER THAN THE US
US CLASSIFIEDS = CRAIGSLIST WEBSITE HORIZONTAL MEANS AMAZON.COM US VERTICAL MARKETPLACES = AMAZON TABS
USA

UNICORNS/ SOONICORNS IN VERTICAL

OUR CLASSIFIEDS IS A CALL CENTER WE HAVE 2 LARGE HORIZONTAL PLAYERS
CATEGORIES
INDIA

20 THINGS ABOUT MARKETPLACES IN INDIA 12

 PLAYBOOK FOR ONLINE RETAIL MARKETPLACES:
LARGE CATALOG → ADS → PRIVATE LABELS
THE PLAYBOOK % of revenue from private labels

GET BIG: SCALE QUICKLY (I.E. CAC BURN)

~50% 35% 66%

GET CLOSE: CUSTOMER LOYALTY (LIKE PRIME)

32-65% 14%
GET FIT: IMPROVE PROFITABILITY (WITH ADS AND PVT LABELS)

GET DEEP: REPEAT PROCESS WITH TIER 2/3

Now 100% private labels

Source: Deloitte, Bernstein, various filings, IQ data 20 THINGS ABOUT MARKETPLACES IN INDIA 13
 RETAIL MARKETPLACES HAD TO HACK STUFF TO SCALE
Flipkart led with many unique-to-India innovations, and we keep churning them out!

CASH ON DELIVERY (2010) EXCLUSIVE “DROPS” (2014) LENSKART @ HOME (2010) SOLVING LAST MILE (2016)

● Try glasses on webcam

(2010) try through
WhatsApp

● Will send an
optometrist home
Even today, after UPI, 70% of txns are COD (2019)

MYNTRA TRY AND BUY (2016) PHONE EXCHANGE (2016) ZEPTO: 10-MINUTE DELIVERY (2021)

Real challenger to kirana stores?

Source: Inc42, EconomicTimes, Fortune India, various company websites 20 THINGS ABOUT MARKETPLACES IN INDIA 14
 MARKETPLACES HAVE BECOME CONGLOMERATES;
AND CONGLOMERATES WANT IN TOO
PARTNERSHIPS FLIPKART AMAZON MYJIO TATA NEU

Commerce/
Marketplace

Entertainment

Loyalty Programs

Financial Services

Logistics

Analytics/Cloud/Social

Other Consumer Service

Source: Bernstein 20 THINGS ABOUT MARKETPLACES IN INDIA 15

 12%

MOST OFFLINE PLAYERS SEE THE

GRASS GREENER ON THE OTHER SIDE 6% 6%

2.5%
● Unilever is helping 1.3m kirana stores get on ONDC
Apollo Dmart Westside ABFRL
Pharmacies
● Amazon’s Local Shops program is bringing Online as % of total revenue
neighborhood stores to Amazon with a Prime badge!

● “Kiranatech” has raised $1.2b in funding in the last 12

years

Source: Traxcn, Businessline, various company filings 20 THINGS ABOUT MARKETPLACES IN INDIA 16
REMEMBER THAT LEAPFROG?
ONLINE MARKETPLACES ARE NOW GOING “OFFLINE”…
“Capex” is the new Performance Marketing and “Omnichannel” is the new “D2C”

● Brands are seeing higher AOV,

higher conversions offline
936 stores
● Online business for most is more
expensive than they thought

Your friendly neighbourhood optician has 1,400+ stores

across the country ☺ 165 stores

20 THINGS ABOUT MARKETPLACES IN INDIA 17

 THE DEVIL LOVES MARKETPLACES TOO
MANY HAVE TRIED… LACK OF SUCCESS HAS NOT BEEN DUE TO LACK OF FUNDING

Funding in Mn USD
15,000

10,000

5,000

0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

NEW CONTENDERS, AND THE GOVT TOO. WE WON'T STOP TRYING

Source: Tracxn 20 THINGS ABOUT MARKETPLACES IN INDIA 18

WE HAVE NICHE ONLINE MARKETS FOR EVERYTHING NOW, MANY
STILL SUBSCALE

Resell concert tickets Marketplace for Pet Insurance- USA

Energy Art auctions

Sneakers Collectables

Housekeepers Loans Luxury furnishings

INDIA USA

20 THINGS ABOUT MARKETPLACES IN INDIA 19

 HOW ABOUT MARKETPLACES THAT SKIP PHYSICAL GOODS
ALTOGETHER?

Discov ery of doctors + telemedicine

Platform for digital goods for as low as Rs 20
70% gross margin
Free to paid conv ersion at 10-12%
720 cities in 20 countries

Astrology marketplace
Mental wellness platform 12% users = 70%
80% rev enue from users <35 yo
Repeat user ARPU of Rs 5000+
ARPU of Rs 200 @ Rs 20/ min

Three-sided marketplace of creators, fans and Managed marketplace for local serv ices
brands 45K+ trained professionals, 10 Mn+ customers
Over 600 creators on the platform 77% business from repeat users

Source: Entrackr, various filings, IQ data 20 THINGS ABOUT MARKETPLACES IN INDIA 20

 BUT SUCCESS ELUDES THE B2B SPACE

B2B Marketplaces Funding (USD M)

● Focus on building GMV somehow
4,000

3,500 3,346

3,000 ● No real tech intervention

2,500

2,027
2,000
● Besides pricing and free credit, no Right to Win
1,500
1,188
1,000
770
538 605
500 287
234
52 112
-
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Total Funding (USD M)

Source: Tracxn, X.com 20 THINGS ABOUT MARKETPLACES IN INDIA 21

 EARLY ADOPTION WAS DRIVEN BY
DISCOUNT 'FESTIVALS’ AND LAYERS OF DISCOUNTS
THE PYRAMID SCHEME OF DISCOUNTS

Marketplaces giv e you a discount

Extra discount if you hav e a "Pro" account

Find a coupon code

Use a credit card discount

Use your credit card points

Cashback if you pay v ia Cred/ Cheq

Source: X.com 20 THINGS ABOUT MARKETPLACES IN INDIA 22

 BUT DISCOUNTS MAY BE ON THE WAY OUT AS
OLIGOPOLIES FORM DURING FUNDING WINTERS?
Most marketplace surv ivors are now ensconced in Duopolies or Oligopolies

Surge pricing No discounts Convenience fee Higher prices than offline

Zepto/ Instamart: Myntra’s platform fee to pay for There is a hidden cost for
little discounting + delivery fee potential reverse pick up convenience too

Convenience

Discount

CONSUMER BEHAVIOUR IS CHANGING TO PAY FOR CONVENIENCE

Source: Uber, Myntra, Livemint 20 THINGS ABOUT MARKETPLACES IN INDIA 23

FINALLY, SOME MENTAL MODELS FOR MARKETPLACES
HOW NOT TO PIVOT TO A BRAND OR A RETAIL CHAIN

INDUSTRY PROFIT MARGINS

For eg, its high in luxury goods but low in grocery
ARE HIGH

STANDARD INDUSTRY For eg, travel agents already got 10-20% commission, so
PRACTICE EXISTS Redbus/ Makemytrip could ask for the same

VALUE DISCOVERY STILL For eg, Air Jordans sell at higher on a secondary
LEFT marketplace than on Nike’s website

For eg, B2B marketplaces where solving time, cost, quality

LOW NPS INDUSTRIES
and tech is considered valuable

SUPER UNORGANIZED
Amazon, Flipkart, Jio already have a playbook for this
SELLER BASE

20 THINGS ABOUT MARKETPLACES IN INDIA 24

20 THINGS ABOUT
FINTECH IN THE LAND OF
‘ZERO’
ZERO - THE LEGACY OF
ARYABHATTA CONTINUES
● Sage Aryabhatta, 500 BC, first used the concept
of “Zero” in his place-value system

● It is very on brand for Indians to love ZERO

20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 26

 WE LOVE ZERO, AKA FREE!
Free Shipping Free games “Free loans” Free stuff

20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 27

 UNLIKE REST OF THE WORLD, WE HAVE ZERO MDR
INDIA USA

DOMESTIC MONEY TRANSFER CHARGES-

INDIA V/S US
2-3%/ TXN (APPROXIMATELY IN DOLLARS)

16

~NEFT $0-40/TXN

US India

1.75%/TXN

Source: Venmo, Baml, Citi, Paypal, Wells Fargo customer charges docs 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 28
 VIDEO KILLED THE RADIO STAR – UPI KILLING CASH…
CASH & CASHLESS TRANSACTION AS % OF CONSUMPTION
120% 16%

14%
100% 14%
5% 8%
12% 11% 14% 14%
17% 18% 12%
12% 26% 13%
33%
80%
9% 11% 10%
11%

60% 8%

95% 92% 6%
89% 86%
40% 83% 82%
74%
67%
4%

20%
2%

0% 0%
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

Cash (% PFCE) Cashless (% PFCE) Cash (% GDP) (RHS)

Cash velocity declining People holding same amount of cash, but transacting digitally

Consumption = PFCE (Private Final Consumption Expenditure)

Source: RBI, NPCI, Bernstein 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 29
 SOUNDBOX & UPI QR DRIVING POS MACHINES/ATMS TO ZERO
SOUNDBOXES GROWING EXPONENTIALLY… …SO NO ONE NEEDS CASH ANYMORE

SUBSCRIPTION PAYTM PAYING MERCHANTS (MN) TOTAL NUMBER OF ATMS

250,000

10.6

9.2
200,000

7.9

6.8
150,000
5.8

4.8

3.8 100,000

2.9

2
1.3 50,000
0.8 0.9
Jul-21

Jul-22

Jul-23
Mar-21

Mar-22

Mar-23

Dec-23
Dec-21

Dec-22
Aug-22
Aug-21

Aug-23
Apr-22
Apr-21

Apr-23

Sep-23
Sep-21

Sep-22
Jan-22

Jan-23
Nov-22
Nov-21

Nov-23
May-21

May-22

May-23
Jun-23
Jun-21

Jun-22
Oct-21

Feb-23
Feb-22

Oct-22

Oct-23

0
Jan'17 Jan'18 Jan'19 Jan'20 Jan'21 Jan'22 Jan'23 Jan'24

Source: RBI, Paytm Investor reports 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 30
 DEBIT CARDS ON THEIR WAY OUT

MARKET SHARE BY VOLUME OF TRANSACTIONS

0 2

31 29
15 38 62 76 87

24

69 69
60 19

43
12

27
9
15 6
7
FY17 FY18 FY19 FY20 FY21 FY22 FY23
Debit cards Credit cards UPI (P2M)

AND SO ARE OLD STYLE CREDIT 'CARDS'…

Source: RBI, NPCI, Bernstein 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 31
 GOODBYE VISA, HELLO RUPAY
CREDIT CARD 2.0 NEEDS TO BE BUILT DIFFERENTLY. LIKELY ON RUPAY.

NEW CREDIT CARD ISSUANCES %

10 30
90

● Winning Formula: Lower MDR and Best Rewards 70

● Rupay winning on both and gaining market share

● All banks bringing in Rupay variants

2022 2023

● Next up: virtual cards Visa/ Mastercard Rupay

Bonus
gamechanger
Credit on UPI!

Source: RBI, NPCI, Bernstein 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 32
 ZERO CASH ON DELIVERY?
COVID + UPI HAS CHANGED CASH BEHAVIOUR DRAMATICALLY!

E-COMMERCE QUICK COMMERCE

0% 1% 3%
40% 35%
15%

43%
25%

0% 39%
0%
60%

50%
55%
25%

10%

Pre Demonetization (FY17 Est.) Post Covid (FY22/23) Pre Demonetization (FY17 Est.) Post Covid (FY22/23)

CoD UPI Credit/Debit cards BNPL CoD UPI Credit/Debit cards BNPL

Source: IQ internal estimates 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 33

 HOW INDIA SAVES

OUR LOVE FOR LAND+ GOLD

2014
IS CHANGING IN THE WORLD
OF ZERO Financial
assets
28
Physical
assets
72
THANKS TO ZERO BROKERAGE, PAPERWORK AND FEES

2022
● Moving away from gold/ real estate to
Equities Cash
financial assets PF 5 4
6

● Equities still very small (<5%) but growing Insuran

quickly ce…

FDs
15

Physical
assets
64

Source: Jefferies 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 34

 ZERO FEES FOR ADVISING ON MUTUAL FUNDS

SIP GROWTH – BETTER THAN MOST STARTUPS ☺

● Fintechs getting first time investors to the markets – Avg
monthly SIP of $20 is half of traditional players
200

● All of this on zero fees through direct plans

26% CAGR FOR ~8Y!
ETMoney 150
PayTM Money 5%
5%

100
SBI
8%
3m new MF folios
opened in Nov-23 50
NJ Wealth
Groww
11%
48%
80% by new age
firms! PhonePe
0

Oct-16

Oct-17

Oct-18

Oct-19

Oct-20

Oct-21

Oct-22

Oct-23
Apr-23
Apr-16

Apr-17

Apr-18

Apr-19

Apr-20

Apr-21

Apr-22
Jul-16

Jul-17

Jul-18

Jul-19

Jul-20

Jul-21

Jul-22

Jul-23
Jan-19

Jan-20

Jan-21

Jan-22

Jan-23
Jan-17

Jan-18

Jan-24
8%

AngelOne SIP (Rs bn)

15%

Source: AMFI data, ET, Mint 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 35
 NSE F&O TURNOVER (RS. LAKH CRS)

ZERO BROKERAGE ON DELIVERY, BUT 800 00

700 00

HOUSE WINS ON SPECULATION !

600 00

500 00

400 00

● India has zero brokerage on delivery of stocks 300 00

200 00

100 00

● Still brokerage revenues have been growing at breakneck 0

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
speed driven by F&O (YTD)

5x 4x ARE WE MOVING TO
in 5 years I n 4 years NEGATIVE
BROKERAGE? ☺

Source: NSE, MCA filings 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 36
 ZERO PROFIT IN SPECULATION…
BUT THAT DOESN’T STOP US FROM TRYING!
INDIA – A GLOBAL LEADER IN F&O
Compound annual growth rate of
Contract traded in 2023
options contracts traded,
2013 to 2023

India 52.4 85.3b

US 10.7 11.2
Brazil 10.2 2.4
Canada 9.7 0.1
Hong Kong 8.8 0.2
Taiwan 4.9 0.2
S.korea 3.8 0.8
Russia 1.3 0.1
Germany 0.9 0.6
France -1.2 0.1
India is the
Australia -6.3 0.1
biggest, and still
UK -6.7 0
growing the
fastest!

Source: Bloomberg, ET 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 37

 WAGMI + HODL + YOLO = RACE TO ZERO

● 19m crypto investors in India

● 90% lose money with median loss at 35%

ELON’S 2021 SIDE HUSTLE: INFLUENCERS TEACHING YOU

HODL! WAGMI?
PUMP AND DUMP “SAFE” CRYPTO TRADING

20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 38

 FINANCIALS OF FINTECH BNPLs FY23 (RS. CR)
NO ZIRP, NO BNPL? 300
200
100
● 2020-21, ~25-30% of all fintech funding went to 0

BNPL -100
-200
-300
● Between bad performance & regulations, funding -400
ZestMoney Lazypay Axio
has it has all dried up -500

Revenue PAT

● What’s to blame? Pick from small tickets, short

tenors, expensive credit, poor underwriting, bad BAJAJ FINANCE FINANCIALS (RS. CR)
execution 45,000
40,000
28% Revenue & 43% PAT CAGR
35,000
30,000
25,000
20,000
15,000
Only the OG Bajaj Finance 10,000
5,000
continues to shine. Flawless 0
execution, offline distribution FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

& cheap credit. Revenue PAT

Source: MCA filings, HDFC securities 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 39
 ZERO BANKING: ZERO BALANCE,
ZERO BRANCHES AND ZERO PAPER
● Free, zero balance accounts means 78% of Indians
have a bank account

● Paperless banking means no. of branches is

stagnating

● 90% of India has an Aadhar; half of this is linked to

a bank account

Source: S&P Global 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 40

 ZEROING ON THE REVENUE POOLS,
AKA “WHY ALL ROADS LEAD TO LENDING..."
~$15 B ~$3.5 B ~$2.5 B ~$1.2 B

DIGITAL LENDING BROKING CROSS BORDER PAYMENTS FINTECH SAAS *

Source: MCA filings, IQ internal estimates * Excludes Banks & NBFC IT **IN 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 41
 ● Persona of the “banker”
No. of business has evolved with time
correspondents (mn)

ZERO PERSON LEFT BEHIND - IF THE 1.3

APP WON’T REACH YOU, AN 1.1

AGENT WILL Suitcase banker

● The one man shop is a banker that does

0.73
everything from savings, lending, investing,
money transfer, cash withdrawals and mobile
recharge in rural areas
Payments banker

FY20 FY21 FY22 Digital banker

Source: Livemint, Fino Investor release 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 42
 ZERO TOLERANCE BY REGULATORS
FINTECH HAS BEEN THROUGH SOME TOUGH LOVE

2020 APR-22 MAY-23

JUN-23 NOV-23 FEB-24

Source : Financial Express, ET, Moneycontrol, Inc42 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 43
 NOT A ZERO SUM GAME: ISPIRIT
● Unique public private partnership model

● Built the world class India Stack

● Instrumental in turning us from outsourced IT

services into a world class product nation

Source: Inc42 20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 44

 ZEROS ARE NEVER ENOUGH! LOOKING FORWARD TO
BETTER, SAFER, INNOVATIVE FINTECH
FASTER, CHEAPER, BETTER LOAN CYCLE SECURED LENDING + BETTER ADOPTION OF CREDIT AND
FOR NTC CUSTOMERS FINANCIALIZATION DIGITAL TRANSACTIONS

KOSH HAS 95%+ DIGITAL COLLECTIONS

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Kosh Traditional MFI
UPI ACH Cash

20 THINGS ABOUT FINTECH IN THE LAND OF ‘ZERO’ 45

Source: IQ internal data, ET
20 THINGS ABOUT
INDIA SAAS
 FIVE DECADES OF BUILDING SOFTWARE FOR THE WORLD

Built a legacy with On-Prem Services With advent of Cloud Computing, SAAS companies emerge

1970 1980 1990 2000 2010s PRESENT

Source: Forbes India 20 THINGS ABOUT INDIA SAAS 47

 NOT MANY GAVE US A CHANCE TO MOVE
FROM BODYSHOPPING TO PRODUCTS
SAAS V1 FOUNDERS STARTED WITH THE SAME PLAYBOOK THAT WORKED FOR IT SERVICES

Gross Margins moved from 40% to 70% from Services to SAAS

80%
75%

44%
FOR THE FIRST 20 YEARS, WE HAVE BEEN
PRICE WARRIORS – OFFER SAME
30% 30%
QUALITY AT A CHEAPER PRICE

Wipro Infosys TCS Freshworks RateGain

Gross Margin

Source: Deloitte, Bernstein, various filings, IQ data 20 THINGS ABOUT INDIA SAAS 48
 BUT NOW INDIA SAAS WINS ON IP!

INDIA B2B SAAS FILED 1,400+ PATENTS OVER LAST 5 YEARS, 5X OF THE PREVIOUS FIVE YEARS

TOTAL PATENTS FILED BY INDIAN STARTUPS

2,016

1,650 1,598
1,482 21 FILED, 12 GRANTED 50 filed, 23 granted

801

2018-19 2019-20 2020-21 2021-22 2022-23

15 FILED, 7 GRANTED 12 FILED, 5 GRANTED

Source: Livemint article, Hindubusinessline 20 THINGS ABOUT INDIA SAAS 49

 FRESHWORKS SUCCESS INSPIRED A NEW SAAS GENERATION

UNLIKE CONSUMER INTERNET, SAAS NEEDS

PLENTY OF SUCCESS STORIES IN LAST 6 YEARS
LITTLE CAPITAL BUT LOT OF PATIENCE

8
Freshworks ARR timeline:
7 5 years from $1M- $100M
5 years from $100M - $600M
$600M
6 Last valued at $5.6B Last valued at $4B Last valued at $3.5B IPO at $10B

$300M M&A
3

Cisco Mercer 6sense Twitter Microsoft Stripe

2

$100M
1 THERE ARE MANY ALSO-RANS
$1M
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
20k Most of these don’t survive.
SaaS startup funding (in $B) Freshworks (ARR Timeline in $M)
SAAS startups founded in India Only 2% have raised Series C

Source: IP patents report 2022-2023 20 THINGS ABOUT INDIA SAAS 50

 MEANWHILE, BACK HOME, WE HAD OUR OWN
“DIGITAL INDIA” MOMENT

2015 2016 2017 2015

2020 2021

Source: Entrackr, Traxcn 20 THINGS ABOUT INDIA SAAS 51

 ALREADY HOOKED TO THEIR PHONES, INDIANS COULDN’T HELP BUT
BRING SOFTWARE TO THEIR WORKPLACE
SINGLE PERSON-RUN FAMILY BUSINESS
INDIAN SMB OWNERS = PROSUMER

DID YOU NOTICE THAT WHATSAPP IS THE MOST WIDELY USED ‘BUSINESS SOFTWARE’ IN INDIA ☺

Source: Google images 20 THINGS ABOUT INDIA SAAS 52

 ‘FAMILY CTOs’ BOUND TO MAKE SOFTWARE PENETRATION EXPLODE

A DIGITALLY NATIVE GENERATION IS IN LINE TO TAKEOVER THE FAMILY … THIS WILL UNLOCK UNLIMITED SOFTWARE AVENUES
BUSINESSES… AT WORK

Process Automation Finance Education

Entertainment Resource Tracking Inventory Management

CRM usage Healthcare

Source: Google images 20 THINGS ABOUT INDIA SAAS 53

 BUT GLOBAL SOFTWARE COULD NOT PENETRATE
LIKE GOOGLE AND META DID IN INDIA
SELLING A RS. 4,000/ MO. PRODUCT TO A RS. 20,000/ MO. INCOME KIRANA STORE COULDN’T WORK FOR INDIA!

PRICE $40 per month $4 per month

DESKTOP vs MOBILE Desktop first Mobile first

UI / UX UI/UX not meant for Indian usage UX built for Indian usage
Compliance, multilingual, local payments

MULTILINGUAL
Not Available Available
SUPPORT

Source: Quickbooks, Vyapar 20 THINGS ABOUT INDIA SAAS 54

 AND NOBODY WAS SOLVING FOR
INDIA’S HIGH TOUCH MARKET…
EARLY MOVERS IN INDIAN WILL NEED TO DO MORE HAND-HOLDING, BESIDES PRICING

PRICE $400/ vehicle/ year $40/ vehicle/ year

Global solution Designed for Indian businesses

CUSTOMER SUPPORT
Self serve Solves for hand-holding

Source: Samsara, FleetX 20 THINGS ABOUT INDIA SAAS 55

 AT SOME POINT, WE DECIDED TO BACK ‘MAKE IN INDIA’
Resource management/accounting Sales CRM & Marketing automation

Construction Tech

Fleet Management Marketing Tech

Source: Tracxn 20 THINGS ABOUT INDIA SAAS 56

 THE WORLD’S 4TH LARGEST ECONOMY CAN’T RUN WITHOUT
SOFTWARE…
120

100

80

India holds 3rd largest revenue share in Zoho 60

40

20

0
Zeta Perfios Wingify WebEngage Fleetx

Annual Revenue (FY 23 in $MN)

INDIA SAAS UNICORNS & CENTAURS ARE SET TO BRING IN $20B-$25B IN REVENUE BY 2030

Source: Entrackr, EconomicTimes, Traxcn 20 THINGS ABOUT INDIA SAAS 57

 ‘INDIANS WON’T PAY FOR SOFTWARE’…

Vyapar's ARPU (in Rs.)

4,500

4,000

3,500

3,000
PROPENSITY TO PAY IS NOT A PROBLEM
2,500
ANYMORE
2,000
FOR ARPUs OVER Rs. 5K
1,500
SUPPORT >>>> SALES!
1,000

500

0
2018 2019 2020 2021 2022 2023

Source: Internal data 20 THINGS ABOUT INDIA SAAS 58

 LOW CURRENT SAAS PENETRATION IN SMBs =
HUGE MARKET POTENTIAL TO UNFOLD
# SMBs (in Millions)
60

50
#SAAS Companies (X 1000)

<1 %
40
India SMB SAAS
Penetration <1% 89% • SMBs in India count of 50M*, more than the 33M
30 in USA

20 US SMB SAAS • Total SAAS companies in India at 8,000 v s 17,000

Penetration: 89% in US
10

0
0 2 4 6 8 10 12 14 16 18 20

* Includes individuals like doctors, CAs, etc who are not GST registered but use software
Source: Forbes Statistics 20 THINGS ABOUT INDIA SAAS 59
 ..AND INDIA’S MID-MARKET IS GROWING AT A BREAKNECK SPEED

INDIAN COMPANIES WITH >Rs 500 CR REVENUE

11,731

9,890

~12,000 INDIAN COMPANIES AT

7,496 7,378 ANNUAL REVENUE OF Rs. 500+ CR
($60M+) TODAY PRIMED TO BUY
6,000
SOFTWARE

2019 2020 2021 2022 2023

Source: GST annual SMB report 20 THINGS ABOUT INDIA SAAS 60

 USING ITS HOME MARKET ADVANTAGE,
ONLY INDIA CAN BUILD SOFTWARE FOR THE GLOBAL SOUTH
OUTSIDE THE WESTERN WORLD, US SOFTWARE IS UNAFFORDABLE! INDIA: LARGEST, CHEAPEST ENGLISH-SPEAKING TECH POOL

100
Avg salary of software engineers (US$… Number of software developers (M)
90 7.7

80

70

60 5

50 4.4

40

30

20

10 1.2

0.5
- 0.2 0.1 0.1 0.08 0.08
United Israel Australia Germany Canada United France China India
States Kingdom
China India USA Japan Brazil Singapore Australia Mexico Colombia Hungary

MOST CAPABLE CONTENDER OF BUILDING $5/MO SOFTWARE

Source: Statista, Economic Times article 20 THINGS ABOUT INDIA SAAS 61

 BUT INDIA SMB SAAS HAS NOT HAD THE SMOOTHEST SAILING

Source: Google images, X.com 20 THINGS ABOUT INDIA SAAS 62

 COPYING AMERICA’S ‘PRODUCT LED GROWTH STRATEGY’
MAY NOT WORK FOR INDIAN SMBs RIGHT NOW

VS

MAIN ISSUES

NEED FOR GOOGLE, META CACs ARE LIMITED AFFILIATE/RESELLER

FEET ON STREET HIGH CHANNELS
High touch, digital needs to be sold Rev enue to marketing spend Not enough av enues to “borrow
physically efficiency does not add up trust” from affiliates like CAs

Source: Google Images 20 THINGS ABOUT INDIA SAAS 63

 INDIA STILL LACKS A SUBSCRIPTION
MINDSET
● Culturally, we don’t like recurring bills
COMPLEX!
● Even for mobile bills, 93% are prepaid – trust, security to
limit spends

● Add to that a complex autopay process, India SAAS

needs to think differently about collections

Source: Google Images, Inc42, X.com 20 THINGS ABOUT INDIA SAAS 64

 LOOKING FORWARD: INDIA MIGHT
LEAPFROG TO VERTICAL SAAS
WHILE US TOOK 15 YEARS TO MOVE FROM HORIZONTAL SAAS TO VERTICAL, INDIA MAY SKIP THE HORIZONTAL PHASE ALTOGETHER

VERTICAL CAPITAL EFFICIENT MEANS BETTER MULTIPLES

Internet penetration means more software growth

70.0% 1.5x • Indian SAAS companies
have a lower ARR to burn
vs. 2x accepted as ratio vs. global
60.0%
“good” globally
50.0%

40.0% CO-PILOTS

30.0%

20.0%

10.0%

0.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Human + Bot for Voice to text search Customer education,
customer support for task-keeping seamless marketing

Source: Tracxn, Economic Times 20 THINGS ABOUT INDIA SAAS 65

 LOOKING FORWARD:
'MAKE IN INDIA' MOMENT FOR THE SAAS INDUSTRY

WE WILL HAVE SEMICONDUCTOR INDEPENDENCE, BUT STILL IMPORT $20B WORTH OF SOFTWARE EVERY YEAR!

ARE WE WAITING FOR THE 'PLI MOMENT FOR SAAS’ ?

Source: Economic Times, Money Control 20 THINGS ABOUT INDIA SAAS 66

20 THINGS ABOUT
MICROTRANSACTIONS IN
INDIA
 INDIANS RECHARGE CABLE FOR A FEW DAYS. OUR VERSION OF PAY-PER-VIEW ;)
For India, we only want to pay per v iew! Across mobile and cable, “recharge” for a day/ week/ month is the name of the game

$3

$2

DTH Mobile
ARPU per month

TATA SKY INTRODUCES THE WORLD’S FIRST ‘DAILY RECHARGE’ VOUCHER

Source: TRAI, Airtel 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 68

 MOBILE GAMING ARPU

WE SPEND LESS ON GAMES, AND

DON'T MIND THE ADS :)
vs
● US’s gaming ARPU is 10x India’s today

● Annual ARPU for non-RMG is @ $13 growing at 35-40%

$130 $13

Source: Kalaari Capital report, Statista 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 69

 SACHETS ARE NOT SAMPLES. THEY ARE
THE PRODUCT. DITTO FOR DIGITAL.
● FMCG in India grew only after the introduction of the
“sachet” for soaps, shampoos and detergent

● We have seen sweet spot entry level ARPU for India

content/ social apps is ~$0.4

“LOW UNIT PACKS” ACCOUNT FOR 25-75% OF SALES OF

FMCG PLAYERS ACROSS CATEGORIES

Source: Livemint, Economic Times 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 70

 REAL MONEY GAMING APPS GET IT
IF YOU OFFER A COMPELLING ENOUGH PRODUCT,
USERS WILL COME AND PAY

● India is the largest fantasy sports market in the world

● Dream11’s user base of 200m+ which is more than the no. Market size by revenue (Rs bn)
104
of people that shop online 75 6
59
3
2 42
● ARPU is $45 and ~25% conversion of free to paid 26
3…
56
31 39

2020 2021 2022

Rummy and Poker Fantasy sports Other

Source: X.com, EY report, Redseer 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 71

 THE MOST COMMON UPI TXN IS RS 20! COFFEE, SAMOSA, OR 'IFKYK...'

60% OF ALL UPI PAYMENTS BY VOLUME ARE TO MERCHANTS

85% OF THESE ARE <RS 500

>Rs 2k
5%
Rs 500-2k
10%

<Rs 500
85%

UPI TXN BY VOL SEP’23

Source: X.com, Paytm, NPCI 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 72

 EVEN CONSUMER BUSINESSES NEED ~1.5-2.5K
1.8K

TO BUILD DIFFERENTLY FOR LOW AOV

● Kirana stores get this and therefore have very low costs to be
profitable

● Low AOV businesses which involve an app + physical delivery of

goods can get GMV scale but not profitability 582
500-600
407
● This explains pivot of mass market e-comm to higher AOV and 300
addition of “packing charges” for food delivery cos

Shopsy by Zomato Blinkit Meesho Flipkart - Nykaa

Flipkart mainly due to
… OR YOU SKIP PHYSICAL GOODS AS A CATEGORY ALL TOGETHER smartphone
sales

Average AOV (Rs)

Source: Business Today, Zomato and Nykaa filings, various sources 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 73
 SETTLEMENT B/W FRIENDS AND FAMILY IS ONLINE – DIWALI, SHAADI, RAKHI
Our prov erbial red env elope is digital now.

75% of UPI transfers by value are P2P

Pay to
Merchant
25%

Pay to
Person
75%

RAKHI GIFTS ON UPI PLEASE! UPI TXN BY VALUE SEP’23

Source: X.com, Paytm, NPCI 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 74

 YOU CAN NOW TRAVEL ACROSS INDIA WITHOUT CASH

● There are 50m merchants in the country that accept UPI payments

● These means you can now travel across the country with just your cell phone

COMMUTE

EAT PRAY LOVE SHOP

Source: Google images 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 75

 NO EXCUSE FOR NOT TIPPING!

WEARABLE QR CODE FOR EASY TIPS NO CASH, NO PROBLEM! TIP YOUR VALET/ WAITER/ MUSICIAN ANYWAY

Source: PayTM, TOI 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 76

 WHALES TO MONETIZE – NOT JUST FOR GAMING

WHALES
DOLPHINS MINNOWS
~10% OF USERS THAT GIVE 70-80% OF REVENUE

● 30-40% of users ● 50-60% of users

5% of users = 80% of revenue
● Early payers/ potential ● Liquidity, feature
whales testing, data and ad
views
12% of users = 70% of revenue

Source: IQ portfolio cos 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 77

 DIGITAL PAYMENTS ARE A LEADING INDICATOR OF FINANCIAL LITERACY?
Digital literacy ≠ Financial literacy

400m 80m
vs
Indians use digital payments Indians invest in the stock market

62x 3x
vs
Growth in UPI txn in 5 years Growth in MF participation

Source: Economic Times, Business Standard, AMFI 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 78
 WHY ARE WE AVERSE TO BILLS AT END OF MONTH?

Source: TOI, India News, India Today 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 79
 THIS WHY WE’VE BEEN A PREPAID COUNTRY

95%
90%

73%

6%
US - bank US - credit India - bank India - credit
accounts cards accounts cards

% of population

PREPAID GIVES US A SENSE OF SECURITY, AND A WAY TO LIMIT

… ALSO WHY WE ARE VERY WELL BANKED BUT UNDER-LEVERED
SPENDS…

Source: Livemint 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 80

 BUT, ARE WE SLOWLY GETTING USED TO POSTPAID?

85

73

62
57

47

37
29

Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Mar 23

CC issued (mn)

POSTPAID MOBILE USER BASE IS INCREASING… … AND SO IS THE NUMBER OF CREDIT CARDS

Source: Twitter.com, ETPrime, PwC, RBI 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 81

LOW ARPU WITH 100M USERS? COME OVER FOR COFFEE!!

Plugin from our fund raising deck :)

20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 82

 WE ARE PAYING FOR THINGS LIKE CONTENT AND SOCIAL..
DATING
● Voice first dating app that monetizes
through gifting of v irtual goods
● D-0 funnel from install to paid
conv ersion is 25% up from 1.5% 18
months ago
Source: Frnd, Sharechat, Kuku FM
SOCIAL NETWORK
● Vernacular social network engaging
with text, image & v ideo content
● Monetizes through digital serv ices &
adv ertising
● User retention is off the charts & 30%+
DAU/MAU
AUDIO CONTENT
● Audible in regional languages
● $5 annual subscription is textbook
v alue for money
● Their renewal rates are higher than
Netflix and Hotstar!
20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 83

DIGITAL GOODS
● Pep.liv e is a platform for digital goods
like recipes, diet plans, meditation
class, etc for as low as Rs 20
● Pep’s thesis is allowing guilt-free
content consumption instead of
mindless social media scrolling
● Free to paid conv ersion at 10-12%!
Source: IQ internal data
…AND SERVICES…
MENTAL HEALTH
● Clarity is 1-1 online mental wellness
● There is nothing free on the app
● ARPU of their repeat users is ov er Rs
5,000!
MONETIZING CLOUT
● Fanztar is creating a v irtuous economy
of creators, their fans and brands
● Topmate allows you to talk to an
expert/ mentor, has 60%+ M9 user
retention
20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 84
 ...AND SMB SAAS...

● #2 accounting software ● #1 payroll software for blue ● #1 construction management

collar workers software
● $4 p.m. per user
● 50 cents p.m. per employee ● ~$10 p.m per user
● Over 500k SMEs
● Over 600k users ● Most users are construction
site workers

Source: IQ internal data 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 85

 ...AND PHYGITAL GOODS...

SPIRITUALITY CLASSIFIEDS

● Spirituality marketplace for faith & div inity offering e puja & ● Hyper-local daily for news and classifieds but digital cov ering
darshans 10M+ districts

● 10k Orders & >1.2 Cr GMV within first 6 months ● 54L MAU, 10 sessions per week av eraging 6m per session

● Rated best in its segment with 77% rating full & ~60% organic
bookings

Source: Play Store, Sensor Tower, IQ internal data 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 86
 LOOKING FORWARD:
UPI AUTOPAY + MICROTXNS CAN BE A
GAMECHANGER
● Credit cards are the backbone of the Postpaid world
and UPI autopay is India's answer

● Content, gaming, education, autoinvest - a big digital

unlock?

● Replace cash on delivery with escrow mandates for e-

commerce?

● New categories of software to manage our digital

journeys?

Source: Livemint, CNBC TV18, Business Today 20 THINGS ABOUT MICROTRANSACTIONS IN INDIA 87
20 THINGS ABOUT
INDIAN CONSUMERS
 THRIFT AND PRACTICALITY WERE A PART OF STATUS SYMBOLS OF
MIDDLE INDIA

UNTIL THE 1980S, A TELEPHONE WAS CONSIDERED A LUXURY. IN THE 80S, 120K PEOPLE BOOKED A MARUTI 800 CC CAR BY PAYING AN
THERE WAS A WAITING LIST OF 20 MILLION. ADVANCE. IT HAD A 3 YEAR WAITING LIST!

Indians who booked Tesla’s Model 3 have been wait listed for 6 years!

Source: HBR, Economic Times 20 THINGS ABOUT INDIAN CONSUMERS 89

 BUT NOW INDIANS CAN'T HAVE ENOUGH OF THE ABSURDLY
EXPENSIVE IPHONES
Apple India Revenue (INR Cr)
50,000
45,000
40,000
35,000
30,000
25,000 CAGR of 44%!
20,000
15,000
10,000
5,000
-
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

● Two Apple flagship stores in BKC, Mumbai and Delhi

● Apple has 67% market share for premium smartphones

(>$800), Samsung trails at 31%

Source: Business Standard, Economic Times, Reuters 20 THINGS ABOUT INDIAN CONSUMERS 90
 % of cars sold in India with
sunroofs
25%

PRAY, WHY DO WE NEED

SUNROOFS IN A HOT COUNTRY 7%

LIKE INDIA? 2018 2023

● What happened to value consciousness?

● Rs 50-60 K for Sunroof which is not usable for

most of the year...

News reports state that the % of cars sold in India with sunroofs are >25% - graph plotted to show trend
Source: Economic Times 20 THINGS ABOUT INDIAN CONSUMERS 91
 LOWER MIDDLE-CLASS ALSO Decathlon India Revenue (INR Cr)
MOVING UPWARDS FROM
UNBRANDED CAGR of 38%

● Young kids who are digitally native are the family

CTOs

● They are “digitizing” and “branding” their family

purchases
FY21 FY22 FY23
● They search for the best deals and flaunt on social
media

Source: Economic Times 20 THINGS ABOUT INDIAN CONSUMERS 92

 FAMILY ORIENTED NO MORE:
MILLENNIALS ARE GETTING MARRIED LATE AND DECIDING AGAINST KIDS

35% 65%

38% 62%

46% 54%

36% 64%

55% 45%

42% 58%

Source: Mint, TOI 20 THINGS ABOUT INDIAN CONSUMERS 93

 THE SINGLE CHILD, THE RAJA BETA OR RANI BITIYA, DOES NOT
NEED TO BUY A HOME
OWNING A HOUSE WAS A PREREQUISITE FOR SOCIAL CONDUCT, LIKE FOR GETTING MARRIED...

400

350

300

250

200

150

100
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 H1 2023
Housing units sold in '000

Source: RBI, Knight Frank for top 8 cities in India 20 THINGS ABOUT INDIAN CONSUMERS 94
 POST COVID INSTAGRAM
YOLO FUELS A WANDERLUST
NEVER SEEN BEFORE...
Looks like the traffic jam has also gone
to Manali on vacation!

Source: X.com 20 THINGS ABOUT INDIAN CONSUMERS 95

 GOA IS CROWDED? TRY VARNASI..

● Branded hotel chains now coming up in spiritual centres like Ayodhya, Pushkar,
Tirupati.

● 40%+ of the searches on Yatra.com are for hotels in religious destinations

The ‘Family CTO’ is planning trips for the whole family

Annual Footfall (Mn)

50

India could see an additional

50-100mn tourists a year on
25
20 account of the new Ram
Mandir
9 8
6.5

Taj Mahal Vatican City Mecca Ayodhya (expected Tirupati Temple, Vaishno Devi Temple,
footfall) Andhra Pradesh Jammu and Kashmir

Source: CNBC, Economic Times, Jefferies 20 THINGS ABOUT INDIAN CONSUMERS 96

IN A QUAINT VILLAGE 4 HOURS FROM
JAIPUR, INDIA'S LOVE FOR NIGHT LIFE
PLAYS OUT
● Magnetic Fields Festival, a 3-day music festival at a 17th
century palace Alsisar Mahal in Rajasthan

● Sponsored by luxury brands

● Eighth edition attracted ~5,000 music enthusiasts!

● $1,000++ for 3 days – has the time come for India's

Coachella?

20 THINGS ABOUT INDIAN CONSUMERS 97

 PREMIUM BIKES AND EVs ARE THE WAY TO GO

FY23 Revenue YoY growth Sales of premium EV 2-wheelers has tripled!

846
32%
727

3x

14%
252

75

FY22 FY23
Premium (>150cc) Overall motorcycle market Low-speed, low cost ('000) High-speed, premium ('000)

Source: Economic Times, New Indian Express 20 THINGS ABOUT INDIAN CONSUMERS 98
 THE ULTIMATE VANITY IS A
GLOBAL DEGREE
THE RAJA BETAS COME BACK WITH
WESTERN TASTE AND INFLUENTIAL
POWER

● 1.3Mn+ Indian students studying abroad

● Increase in applicants from Tier 2 and 3 cities

● Students expected to spend $70b abroad by 2025,

over 50% of the oil import bill!

Source: RedSeer, Indian Express 20 THINGS ABOUT INDIAN CONSUMERS 99

 OF COURSE THEY CONSUME GLOBAL BRANDS
FOR THE REST OF THEIR LIVES...

ZERO MAKING
CHARGES TO
1000% MAKING
CHARGES!

Italian luxury brand Bulgari launched India exclusiv e Men's Kada (Bracelet)

Source: Bvlgari 20 THINGS ABOUT INDIAN CONSUMERS 100

 LUXURY RETAIL IS THE NEW BATTLEFIELD FOR CONGLOMERATES
AND THEY ARE ALL IMPORTING GLOBAL ARMS (BRANDS!)

Source: Company websites, Economic Times, Fortune 20 THINGS ABOUT INDIAN CONSUMERS 101
 Tat a Trent Revenue

IS THE POWER SHIFTING BACK TO

OFFLINE PLAYERS?
How Tata Trent caters to the entire
spectrum of consumers

GENZ FOCUSED MID-MARKET FAST-FASHION, INDO-WESTERN DESIGN-FOCUSED

AFFORDABLE PRICE POINT MEN, WOMEN & KIDS CONSIDERED PREMIUM IN INDIA* LUXURY BRAND

*JV with Spanish group Inditex

Source: Company website and regulatory filings 20 THINGS ABOUT INDIAN CONSUMERS 102
 India's indoor plant market
(USD Bn)

9.8
5.1 WELCOME PET PARENTS AND
2021 2029E PLANT PARENTS!
• Indoor plants, online nurseries and 'plantfuencers'
seeing a growing trend

• Driven by increasing pollution, shrinking spaces and

of course, the aesthetic value – plants are the new
home décor!

Source: Deccan Herald 20 THINGS ABOUT INDIAN CONSUMERS 103

 THEIR MUSIC CONSUMPTION MIMICS Daily Streams in Mn
460
THE WEST – DIGITAL CONTRIBUTING TO
GROWTH OF MUSIC INDUSTRY 290

• Indian language music growing the fastest – 34% of streams in

FY23

• Within regional language, Punjabi music has 39% market share

FY20 FY23
• Interestingly, Spotify has 50:50 revenue mix of subscription and
advertisements in India while globally, ~85-90% of Spotify's 40% from outside of top 8 metro cities
revenue comes from subscription

Source: Livemint, Economic Times 20 THINGS ABOUT INDIAN CONSUMERS 104

 STRONG ANIME FANDOM IN INDIA

Crunchyroll plans

Ramayana - The Legend of Prince Ram Anime movie co-

● India is second largest market for Crunchyroll, a global anime brand produced in India and Japan in 1993 – aired on DD and
● Not just a metro phenomenon was introduction to anime for many 90s kids

Source: Livemint 20 THINGS ABOUT INDIAN CONSUMERS 105

 MUSIC, ANIME, GAMING...
GIVE US THE BEST AND WE DON'T MIND PAYING...

Indian Gaming Market ($ bn)

7.5

3.1

FY23 FY28

Total gamers in India estimated to be ~500Mn

of which regular gamers are ~90-100Mn Gaming is 48% of consumer spend on top 10 Android apps in India
Increasing engagement of gamers from non-metro

Source: Moneycontrol, EY, Business Standard 20 THINGS ABOUT INDIAN CONSUMERS 106
 Viewership (Mn)
130
NO WONDER LEAGUES IN OTHER
80
64 SPORTS ARE GETTING FORMED
15 DOMESTIC SPORTS LEAGUES
Indian Super League Pro Kabaddi (2023) Ultimate Kho Kho
AND COUNTING..
(2021) (Sep 2022)

Kho Kho league becomes the first Indian sports

league to secure private equity investment!

Source: CNBC,
Livemint
Economic Times 20 THINGS ABOUT INDIAN CONSUMERS 107
 BUT CRICKET IS OUR RELIGION.
ANY DOUBTS ABOUT INDIA'S
CONSUMER MARKET?

• Record high of 59Mn concurrent viewers on

Hotstar for Cricket World 2023 Final!

• IPL Rights for 2023-27 sold for $6B

Source: Business Standard, Sportico, Sports Pro Media 20 THINGS ABOUT INDIAN CONSUMERS 108
LOOKING FORWARD: MORE GLOBAL PRODUCTS
AND MORE GLOBAL EXPERIENCES

20 THINGS ABOUT INDIAN CONSUMERS 109

20 THINGS ABOUT
INDIA’S DIGITAL PUBLIC
INFRASTRUCTURE
 WE HAVE BEEN LAYING DIGITAL ROADS BEFORE PHYSICAL ONES

940mn
760m internet CoWI N
users registrations

1.38bn
18 cents/ GB Aadhar
cost of data issued

DIGITAL INDIA Digital public

Digital I nfra BY NUMBERS platforms

580k
5bn learning Common 6.3bn docs in
sessions on Serv ice Digilocker 100k+ startups
DI KSHA Centers (G2C
serv ices)
Digital 170bn e-txn 100+ start up
1.2bn
Financial done by the I POs
telecom
Serv ices gov t in 2023 expected by
subscribers
500mn Jan 2027
Dhan
11bn UPI txn accounts w ith Digital
Digital Skills $20b+ in Businesses
per month
deposits

Source: Indian government statistics INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 111

 WHICH HAS BROUGHT INDIAN BUSINESSES INTO
THE ‘FORMAL’ ECONOMY
GST + DIGITAL PAYMENTS INFRA GIVES BUSINESSES THE RIGHT INCENTIVES TO RUN A “WHITE MONEY” BUSINESS

80

70

60
70%
50

40

30
Increase in the number of
indirect taxpayers thanks to GST
Income Tax return filers (mn)

9M+ NEW TAXPAYERS REGISTERED FOR GST IN THE LAST 6 YEARS

Source: Indian govt statistics, New York Times INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 112
 WE’RE MOVING TOWARDS PAPERLESS BUREAUCRACY

Source: X.com, Economic Times, Indian government data INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 113
 FOR EXAMPLE, YOUR FACE IS
YOUR BOARDING PASS
● US TSA’s Clear charges $189, while Digiyatra
is free

● For Tier 2 cities, adoption is as high as 75%

Source: X.com, Indian government data INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 114
 2,000
1,800
1,600
1,400

DIRECT & EFFICIENT MEANS

1,200
1,000
800

WIDER AND DEEPER 600

400
200
-
● Over 50% Indian families receive govt FY 2013- FY 2014- FY 2015- FY 2016- FY 2017- FY 2018- FY 2019- FY 2020- FY 2021- FY 2022-
14 15 16 17 18 19 20 21 22 23

subsidies and schemes directly into their No. of beneficiaries (mn)

accounts

● JAM Trinity – Jan Dhan bank account +

Aadhar + Mobile has allowed Direct
Benefit Transfer of subsidies and supplies

Source: X.com, IMF, Indian government data INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 115
 FASTAG SAVES TIME, AND FUELS MORE HIGHWAYS

2018-19, AVG WAIT TIME AT TOLL: 8 MINUTES

SHARE OF TOTAL TOLL COLLECTION ON NATIONAL HIGHWAYS
2021-22(WITH FASTAG): 47 SECONDS

96% 97%

76%

60%

25%
20%

Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22

70M FASTAGS ISSUED, WITH AVERAGE TOLL COLLECTION OF $2.5

FASTAG MEANS MONEY FOR MORE HIGHWAYS. READY TO OVERTAKE USA SOON

Source: Economic Times, Diligent IAS, Abu Dhabi Travel planner, Livemint, X.com INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 116
 INDIA’S BIGGEST MARKETPLACE IS
OWNED BY THE GOVT!
● Government e Marketplace (GeM) is an online
platform for public procurement launched in
2016

● GeM processed ~$25bn of orders in FY23 from

1.3m sellers

● Flipkart and Amazon India have comparable

GMV

Source: Indian govt statistics, Times of India, INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 117
 AND PERHAPS THE BIGGEST
EDTECH?
● The Digital Infrastructure of Knowledge Sharing
(DIKSHA) is a free-to-use school platform

● Has 8,900 courses and 200k pieces of content across

30 Indian languages
A DIGITAL REPOSITORY FOR ACADEMIC INSTITUTIONS
W e are committed to bring digital transformation by collaborating with the Academia.
● DIKSHA has reached 180mn students and 7mn
teachers

2157 15.77 Cr ● It is open-source, open content, and open data, and

Registered Higher Educational Total Aw ards Lodged thus available for use by other countries
Bodies

Academic certificates on Blockchain!

Source: Insights on India, Indian govt statistics, IMF, X.com INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 118
 WE LOVE ECOMMERCE. WE DON’T LOVE MONOPOLIES
● Open Network for Digital Commerce (ONDC) is
unbundling each part of the marketplace (buyers,
sellers, logistics and tech) to free market
competition

● Is this the UPI moment for e-commerce?

What is ONDC

VS

Source: Forbes India, Financial Express, X.com, Smartprix INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 119
 AA (ACCOUNT AGGREGATOR) ECOSYSTEM

UPI MOMENT FOR LENDING MAY BE

HERE...
● 60% of data requests for the AA ecosystem is for lending

● Lendingkart reporting 8% higher conversion + 0% fraud

related defaults post AA
OCEN (OPEN CREDIT ENABLEMENT NETWORK): OPEN
● OCEN reduces operating cost of a loan APIS; MIDDLEWARE FOR CREDIT

● This is why even a $10 loan can now be disbursed in 5

mins to a small biz

Turns out we can also do credit in sachets!

Source: Livemint, Ministry of Finance, Finbox, Sahamati, Forbes INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 120
 ACCESS TO FINANCIAL MARKETS HAS BECOME FASTER AND CHEAPER

TRADING INVESTING

● We have the fastest settlements in the world ● Indians are doing $2bn in monthly MF investing

● Market participants are very profitable at low brokerage and small
trade sizes
● SEBI vs SEC: Unlike the US, Indian regulator’s mandate is financial
inclusion, risk management and protection of retail investors
● Still super underpenetrated - 70mn folios in a population of 1.3bn
● AMC cost st ruct ures are able to support median investments of
$25/ mo!
200

150

100

50

Apr-16

Apr-21
Apr-17

Apr-18

Apr-19

Apr-20

Apr-22

Apr-23
Jul-16

Jul-17

Jul-18

Jul-22

Jul-23
Oct-18

Jul-19

Jul-20

Jul-21

Oct-23
Oct-16

Jan-20
Jan-17

Oct-17
Jan-18

Jan-19

Oct-19

Oct-20
Jan-21

Oct-21
Jan-22

Oct-22
Jan-23
SIP (Rs bn)

Source: Finshots, Choice India, Nerd Wallet, Amfi India, X.com, Livemint INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 121
 AYUSHMAN BHARAT DIGITAL MISSION (ABDM) IS BUILDING DIGITAL HEALTHCARE HIGHWAYS

Patient Journey under ABDM

AIMING FOR A DIGITAL

HEALTHCARE UTOPIA
Patient v isits facility ABHA ID is created QR code to book
appointment
● 493m health IDs created so far

● ABDM links to universal healthcare insurance,

launched 5 years ago

● All new infra pings off existing rails. ABDM

works on UPI, Aadhar and JAM trinity
Lab reports linked to Prescriptions/ tests Doctor records linked Patient meets doctor
ABHA id and shared shared with labs and to ABHA id
with doc pharmacies

Source: Live Mint, mygov, Eka, COE, Indian government statistics INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 122
 BUILDING GREAT TECH
FOR FARMERS
● Unified portal for agri-statistics (UPAg) gives
farmers insights into production, trends,
pricing, drought, crop and risk management

● BharatNet is the world’s largest rural telco

projects bringing internet access to 625k
villages

Source: Indian govt data, X.com, Hindu Business Line INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 123
 WE CAN GO ON… BUT THERE IS A PORTAL FOR EVERYTHING NOW

Common Mobility Card Like Registering Grievances Against

Digital Rupee Digital Land Records Check For Mobile Phone Fraud
Oyster Public Authorities

E-courts – Digital Courts, Records And Citizen Engagement Portal With To-dos
Rbi’s Own Core Banking System Find Your Unclaimed Bank Deposits
Filings And Tasks For Indians!

Source: Livemint, The Hindu, ET Online, X.com, Indian govt data INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 124
 US WAS ISSUING PAPER …WHILE INDIA WAS 100%
INDIA SHIPS CODE CERTIFICATES… DIGITAL

QUICKER THAN ITS

STARTUPS
● Jan-21 vaccines were rolled vs
out, and so was India’s CoWin
platform

● Managed the 2nd largest

scale of vaccinations in the
world completely digitally

Source: Wiki, CCHD INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 125

 LOOKING FORWARD:
CAN WE HAVE MORE (#*$!)
PORTALS PLEASE?

● E-birth/marriage/ death certificates? Only 15% of

marriages in Karnataka are registered!

● Digitizing criminal records

● AI judges?

● Real estate compliances need to go online

Source: Wikimedia, India Mart, YourStory, Myadvo.in INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 126
 LOOKING FORWARD:
INDIGENOUS APP STORE OUR
RESPONSE TO WALLED
GARDENS?
● 90m downloads and 100 apps being
added each month!

Source: Moneycontrol, Economic Times , X.com INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 127
 LOOKING FORWARD: OUR
OWN CHIPS TO POWER ALL
THIS INFRA
● India’s Semiconductor Mission has a
$10bn budget to build the ecosystem
with chips promised as early as 2024

Technology trade is not just trade; it is as much as

about political science.
Dr. S. Jaishankar, External Affairs Minister

Source: Livemint, Reuters, Inc42, Barrons, Indian govt data INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 128
 Filing online doesn’t take away the load of doing the actual filiing
… or the anxiety of trying to log in to govt portals

LOOKING FORWARD:
…FILING ONLINE ≠ EASE
OF DOING BUSINESS

● We have reduced 39,000+ compliances

and decrim inalised 3,500 minor
provisions this year

● But with everything new, there are

always teething issues

Source: Financial Express, Inc 42, Trading Economics, X.com INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 129
 LOOKING FORWARD: DATA,
PRIVACY AND AI PROTECTION

● How do we secure data of

a billion Indians?

● There are already data

leaks and as more of our
data goes online, security
becomes critical

● Data Privacy bill passed...

now on to implementation

Source: Times of India, X.com, The Hindu INDIA’S DIGITAL PUBLIC INFRASTRUCTURE 130
20 THINGS ABOUT
INDIA’S 2 WHEELERS
 HALF OF INDIAN HOUSEHOLDS HAVE A BIKE

4.5X MORE BIKES ARE SOLD IN INDIA THAN CARS

ANNUAL VEHICLE SALES

18

Millions
16
16

14

12

10

6
4
4

0
2022-23
Passenger vehicles 2 wheelers

Source: India in Pixels by Ashris (2021), SIAM 20 THINGS ABOUT INDIA’S 2 WHEELERS 132
 A BIKE MEANS A LOT OF THINGS…

PLACE OF BUSINESS TRANSPORT AND DELIVERY FARM EQUIPMENT

PLACE OF WORSHIP: BULLET TEMPLE FAMILY “CAR”

Source: Financial Express, OLX, Google Images 20 THINGS ABOUT INDIA’S 2 WHEELERS 133
 ABOVE EVERYTHING, A BIKE MEANS FREEDOM
US = GUNS, DOLLARS AND CARS INDIA = FOOD, CLOTHING, HOUSE + MOBILITY

INDEPENDENCE IN YOUR WORK AND SOCIAL LIFE

+

Source: Johns Hopkins, CFI, Stories Parkplus, IMDB, Businessbar 20 THINGS ABOUT INDIA’S 2 WHEELERS 134
 OUR INCOME MAY BE LOW, OUR FREEDOM IS NOT
A NEW BIKE COST LESS THAN AN IPHONE 15!

MODEL: HERO SPLENDOR + Model: Toyota 2023 Highlander

Price: ~Rs. 75,000/$1,000 Price in USA : ~$44,000
GDP per Capita: $2,400 GDP per Capita: $76000

Source: Bikewale, AutoCar India, Best Brokers 20 THINGS ABOUT INDIA’S 2 WHEELERS 135
 CARS WOULD MEAN DEADLOCK, NOT FREEDOM
CONGESTED STREETS

● 21% Indian roads are single lane roads

Bengaluru is the world's most traffic congested city, according to a 2020 analysis of (~3.8M)
road traffic data
● Indian roads are narrower; built more
for 2 wheelers than 4 wheelers
RANK CITY CONGESTION LEVEL TIME LOST (IN A YEAR)
● 31% Indian rural roads are unsurfaced
243 hours
1 Bengaluru 71%
(10 days, 3 hours)

209 hours
4 Mumbai 65%
(8 days, 17 hours)

193 hours
5 Pune 59%
(8 days, 1 hour)

190 hours
8 Delhi 56%
(7 days, 22 hours)
#PeakBengaluru t raffic - Outer Ring Road, Sep 2023

Source: MacroTrends, Ministry of Road Transport, Wikipedia, Times of India, Hindustan Times, Twitter 20 THINGS ABOUT INDIA’S 2 WHEELERS 136
 WE CAN'T BUILD ENOUGH PUBLIC
TRANSPORT

● Metros coming in 20 cities, but we have 4,000 cities/

towns and 6 lakh villages

● Average share of public transport is just 18% of work

trips

Source: Insights on India, NRIOL, Hindustan Times, Metro Rail Guy, Free Press Journal 20 THINGS ABOUT INDIA’S 2 WHEELERS 137
 WE DON'T PRODUCE OIL. WE MERELY TAX IT...
FOSSIL FUEL CONSUMPTION PER CAPITA, 2022 TAX RATE ON FUEL

United States 63,836 India 69%

Australia 54,286
Italy 64%

France 63%
Germany 31,225

Germany 63%
China 25,344

Britain 62%
United Kingdom 22,509
Spain 53%
South Africa 21,063
Japan 47%

France 19,372
Canada 33%

India 6,319 United States 19%

Consumption (kWh) Tax (%)

Source: Our World in Data, Economic Times, Petroleum Planning & Analysis Cell, IOC 20 THINGS ABOUT INDIA’S 2 WHEELERS 138
 THAT’S WHY WE ARE VERY MILEAGE CONSCIOUS

HALF THE COST OF OWNING A BIKE IS (VERY

EXPENSIVE) FUEL.
HERO SPLENDOR HONDA ACTIVA BAJAJ PULSAR

DO YOU KNOW BAJAJ CT 100 GIVES MILEAGE IN

MILEAGE – 75 KMPL MILEAGE – 60 KMPL MILEAGE – 51 KMPL
EXCESS OF 75KMPL

Source: Maruti, Honda Official Website, Bajaj Official Website, Hero Official Website 20 THINGS ABOUT INDIA’S 2 WHEELERS 139
 ALTHOUGH THE YOUNG GENERATION IS UPGRADING

ROYAL ENFIELD PRIMARILY IN PREMIUM SEGMENT SAW 30% INCREASE LOAN TICKET SIZES HAVE BEEN INCREASING DUE TO UPGRADES
IN SALES IN 1 YEAR AND RISING BIKE PRICES

SALES GROWTH % (Q12022 OVER Q12021) LOAN TICKET SIZE MARKET SHARE (BY VALUE)
100%

90%
89%
80%

70%

60%

50%
48%
40%
37%
30%

20%

10%

0%
<250 cc 250-500 cc 500cc +
FY18 FY19 FY20 FY21 FY22
<250 cc 250-500 cc 500cc + <35K 35K-50K 50K-75K 75K-1L 1L-1.5L 1.5L+

Source: Bike Advice, Autocar Pro, Auto Car India, Overdrive , CRIF 2022 20 THINGS ABOUT INDIA’S 2 WHEELERS 140
 K SHAPED RECOVERY
26 4

Millions

Millions
4
24

K- SHAPED POST COVID RECOVERY

4
22 3
3

REFLECTED IN BIKE SALES

20
3
18
3

16 3
2
14
2
12 2
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
● Affluent and middle-income Indians bought more 2 wheelers Passenger vehicles
4 wheelers

● Lower income India was much worse-off post COVID,

and 2 wheeler sales fell

Source: Insights on India, SIAM 20 THINGS ABOUT INDIA’S 2 WHEELERS 141

 PUSHING MORE AND MORE TO USED TWO-WHEELERS:
$11B MARKET GROWING IN HIGH TEENS
ORGANIZED USED 2W COMPANIES/ PLATFORMS

INDIA USED 2 INDIA ONLINE USED MARKET TYPE

WHEELER 2 WHEELER MARKET
MARKET(VOLUME) (REVENUE) Fragmented Market

CAGR (FY15-FY20): CAGR (FY18-FY20):

15.5% 49.5%
CAGR (FY 20 FY'25): CAGR (FY 20-FY'25):
16.8% 34.5%

Source: INVC News, Times of India 20 THINGS ABOUT INDIA’S 2 WHEELERS 142
 FIRST LOAN FOR MOST INDIANS
IS A BIKE LOAN, AND LOANS LOANS TO ‘NEW TO CREDIT’ BORROWERS

ARE TOUGHER FOR USED TWO- 80%

WHEELERS
2 wheelers
65%

60%

Consumer
● 2 wheeler loans are the first entry to the credit market for a durables
35%
lot of Indians 40% Business
34%
Auto
Personal 28%
● 65% loans for 2 wheelers are from first time users Credit loans
cards 21%
20% 18%
● NBFCs have 67% market share of the loan market Microfin
9%

0%

The total doesn’t sum to 100 since people take loans for multiple events

Source: CRIF 2021, Times of India, Forbes 20 THINGS ABOUT INDIA’S 2 WHEELERS 143
 BIKE TAXIS: OUR ANSWER TO PUBLIC TRANSPORT?

RAPIDO’S NUMBERS @ 60% CLAIMED MARKET SHARE BIKE TAXI IS THE NEW AUTORICKSHAW, NOT EVERYONE IS HAPPY...

1M bikes
750k captains rides/day -
75% on bikes

50% demand
85 cities in Tier II/III
cities

Bike taxis are currently banned in Delhi, Maharashtra and Indore

Source: Rapido, Business Today, Livemint, Tribune India, Hindustan Times, Bangalore Mirror, Riders share, CEIC 20 THINGS ABOUT INDIA’S 2 WHEELERS 144
 NAMMA YATRI IS BUILDING IN PUBLIC WITH THIS LIVE DASHBOARD

ONDC – BIKE TAXIS TO BECOME A

PUBLIC UTILITY?
● Namma Yatri is an auto hailing app built on ONDC by
Juspay and Nandan Nilenkani

● 95% of ONDC orders are “mobility”

● It charges the auto drivers a subscription fee to be on the

app

● GTM has been word of mouth by the auto drivers, with

the blessing of the auto union

Source: Economic Times, Namma Yatri 20 THINGS ABOUT INDIA’S 2 WHEELERS 145
 BIKE TAXIS DOUBLE UP AS LAST
MILE CARRIERS
● India commercial two-wheeler fleet is expected to cross
28m by 2025

● Only 26% of the overall market is organized by food

delivery players

● 65% commercial 2 wheeler fleet is in Tier 1 cities – Delhi,

Mumbai, Chennai, Kolkata, Hyderabad, Bengaluru

Source: Ken Research FY 2020, Economic Times, LinkedIn 20 THINGS ABOUT INDIA’S 2 WHEELERS 146
 MILLIONS SET TO RIDE BIKES AS A GIG. AND LEAVE.

60% of rides are fulfilled by full time drivers who

make salaries comparable to early BPO
Underemployed / unemployed
employees

20% are students/ bike owners looking for pocket Rule of thumb for part time drivers is to add
money income of Rs 5-6k per month with 3 hours/ day on
the app

Source: India Quotient Rapido podcast 20 THINGS ABOUT INDIA’S 2 WHEELERS 147
 OPENING UP A BIG MARKET FOR CONSUMPTION AND RESKILLING....

BETTER EDUCATION FOR KIDS, UPSKILLING MONEY - LENDING, INVESTING AND

ENTERTAINMENT AND GAMING
FOR DRIVERS INSURANCE

Source: Google images 20 THINGS ABOUT INDIA’S 2 WHEELERS 148

 EV ADOPTION FASTER IN TWO WHEELERS

5 YEAR COST DOWN BY ABOUT 35%

ELECTRIC SCOOTER (₹) PETROL SCOOTER (₹)

Vehicle cost 80,000 80,000 ● EV’s entry into the market to reduce price
of bike taxi by ~15%
General serv icing cost 5,000 30,000
● Consumers to benefit upto 10%
Part replacements 15,000 10,000
● As demand goes up, efficiency of the
process goes up too (Elastic Demand –
Battery replacement 30,000 - dependent on price)

Fuel cost 10,000 1,00,000

TCO (5 years) 1,40,000 2,20,000

Source: Financial Express, Plugin India, India Quotient Rapido podcast 20 THINGS ABOUT INDIA’S 2 WHEELERS 149
 EV TWO WHEELERS: WILL INCUMBENTS MISS THE BUS?

EV Funding ($M)
1,100+ ~$5B
companies founded in India funding receiv ed so far
2,030

1,230

766
574

272
179

2018 2019 2020 2021 2022 YTD 2023*

*till 30 Sep2023
Source: Tracxn 20 THINGS ABOUT INDIA’S 2 WHEELERS 150
 EV TWO WHEELERS: INCUMBENTS OR NEW PLAYERS?

CHARGING INFRA DAAS (DATA AS A SERVICE)

EV HARDWARE Analytics on performance incl. customer mov ement,
(Battery sw apping)
battery life tracking, mileage tracking, etc.

AFTER SALES SERVICE FINANCIAL SERVICES

(Financing, insurance)

Source: Auto ET, Tech Sci Research, EV Energy, Zig Wheels, 20 THINGS ABOUT INDIA’S 2 WHEELERS 151
20 THINGS ABOUT

HOW INDIA EATS

 GLOBAL CUISINE CAME TO INDIA
AND GUESS WHAT?

● …PANEER HAS FOUND ITS WAY INTO PIZZAS AND SUSHI!

● Big Mac Maharaja Mac!

● 70% of McDonald's India’s menu has food options with a

native twist

Source: McDonald’s, Dominos for images 20 THINGS ABOUT HOW INDIA EATS 153
 EVEN THEN, TOP PERFORMERS IN FOOD DELIVERY ARE NOT
PIZZA OR BURGER, BUT BIRYANI AND DOSA!

A quick comparison on Zomato Trends shows Indian

dishes have higher demand than foreign ones
120
TRENDING DISHES IN INDIA
100
01 Chicken Biryani

80
02 Chaat

60
03 Sandw ich

40
04 Chicken Starters

20 05 Dosa

0 Value of 100 represents the highest order volume dish in the region
Chicken Chicken Veg Samosa Kachori Cookies
Biryani Burger Sandwich
THE TOP ITEMS ORDERED ON SWIGGY ARE BIRYANI, DOSA, FRIED RICE,
PANEER, NAAN, AND CHAAT

Source: Zomato Trends, Swiggy 20 THINGS ABOUT HOW INDIA EATS 154
 INDIANS DON’T GO TO PUBS,
THEY GO FOR AN EVENING
‘BREAKFAST’
● India has a unique meal-time category – the “evening
snack” dominated by samosas, chaat and batter fried
'Bhajias' – definitely not by healthy options!

● Hanging out with work friends is not at a pub post work but
usually over chai samosa in the evening, i.e. 'second
breakfast'

Source: Times of India, Reddit 20 THINGS ABOUT HOW INDIA EATS 155
 FOR SNACKING, INDIA PREFERS
FRIED OVER BAKED

● Culturally, being able to “fry” in ghee was a sign of wealth/

prestige

● Signature dishes (sweet and savory) of most states in India are

fried
BONDED BY
● Roasting and steaming are far more popular vs baking given BONDA AND
that its cheaper to do BOONDI

Source: Tasteatlas.com 20 THINGS ABOUT HOW INDIA EATS 156

 FEEDING 1.4 BN? STAND
AND DELIVER!
● Most of working India eats a quick, nutritious roadside
meal standing up

● Cutlery? Leaf/paper and hands

● Form factor of food optimized for eating while standing

Source: Twitter, Business Today 20 THINGS ABOUT HOW INDIA EATS 157
 INDIAN MENUS ARE AS COMPLEX AS …. INDIA
HALDIRAM’S MENU vs CHIPOTLE’S ENTIRE MENU IN THE US

● Mom, Dad, Grandparents and Kids eat different cuisines when they go out but they all eat together, since eating out in India is a social activity
● Indian menus have to appeal to a wide range of preferences and that’s why our menus are the size of small books

Source: Zomato, Yelp 20 THINGS ABOUT HOW INDIA EATS 158

 IS INDIA A VEGETARIAN COUNTRY?
AS INCOMES RISE, MORE ARE TURNING NON-VEGETARIAN TO ACCESS BETTER PROTEIN

AS INCOMES RISE, MORE ARE TURNING NON-VEGETARIAN TO ACCESS BETTER WHILE WE HAVE THE MOST VEGETARIANS IN THE WORLD, DESPITE
PROTEIN POPULAR BELIEF, VEGETARIANS IN INDIA ARE A MINORITY

Source: EdTimes, Statista 20 THINGS ABOUT HOW INDIA EATS 159


Tirupati Balaji distributes 100M
laddoos a year. I t ev en has its
ow n Geographical I ndication (GI)
tag and is on an I ndian stamp!
Organised
Source: ICICI, Wikipedia, Hindustan Times, Bikaji
AS INDIANS RISE FROM POVERTY,
THE FIRST GRATIFICATION THEY
SEEK IS FROM SWEETS & SNACKS
SPLIT OF THE SWEET
MARKET IN INDIA ● The Indian sweets market is ~$7B
10%
● 90% of the market is still unorganized, with many local/
regional chains but very few national players (Haldirams,
Bikano and Bikaji)
● Did you know? 20% of sweets sold in India is Soan Papdi!
Unorganised
90%
20 THINGS ABOUT HOW INDIA EATS 160
 On the other end, STARBUCKS
leads the K-SHAPED RECOVERY

But what exactly is Starbucks selling... is it just expensive coffee?

No! It's much more than that:

● Free wi-fi

● “Cool workspace"

● Instagram-able cups!

● Being in America :)

Source: Twitter, Starbucks 20 THINGS ABOUT HOW INDIA EATS 161

 F&B INDIA: MANY LARGE CATEGORIES; HIGH DEAL VOLUME AND
LARGE OUTCOMES
F&B HAS RAISED ~$2.2B IN THE LAST ~10 YEARS… … AND THE SPACE HAS SEEN LARGE M&A OUTCOMES

NOTABLE ONES:
2023
2022
2021
2020
2019
2018 $1.5B $636M $288M
2017
1,200 50
2016
40
2015 800
30
2014 20
400
2013 10
2012 0 0

2016

2017

2021

2022
2012

2013

2014

2015

2018

2019

2020

2023
0 100 200 300 400

Seed Early Late + PE Acquisition value $M No. of M&A (RHS)

Source: Tracxn 20 THINGS ABOUT HOW INDIA EATS 162

 PE FUNDS AND VC FUNDS HAVE SEEN THE RESTAURANT
MARKET DIFFERENTLY…
CRAZY IDEAS ARE MOSTLY ONLINE AND GET EARLY VC CHEQUES OFFLINE BUSINESSES HAVE DELIVERED MORE OFTEN, ATTRACT EARLY PE

ODDS IN FOODTECH ARE NOT GREAT … BUT THE LARGE OUTCOMES COME FROM CRAZY IDEAS

2-sided marketplace, winner-take-all market,

economics of low AOV, intense ops

Source: Tracxn, Economic Times 20 THINGS ABOUT HOW INDIA EATS 163
 FOODTECH WENT THROUGH A LOT
AND ITS NOT OVER YET…
FOODTECH HAS RAISED ~$8B, MOST OF IT IN THE LAST 5 YEARS… … THIS SPACE HAS A LARGE COHORT OF ALSO-RANS

FUNDING IN $M

… AND WILL IT GET DISRUPTED BY ONDC?

SUPER
+ APP + LOGISTICS = ?

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Tracxn 20 THINGS ABOUT HOW INDIA EATS 164

 OUR FOOD DELIVERY IS UNDER- More than 2/3rd of spending in food serv ices in India is in
unorganized stalls/kiosks, etc
PENETRATED AND MAY REMAIN SO...
SPEND ON FOOD SERVICES BY CATEGORY (2019)
120%

7M 100%
restauran ~150k, or 5% on Zomato
ts in I ndia 80%

60%

40%

20%

1M 0%
restaurants ~450k, or 45% on Doordash India China Japan Indonesia Thailand Brazil Germany USA Korea

in USA
Cafes/Bars & Full Service Restaurants Limited- Service Re staurants Street Stalls/Kio sks & others

Source: BQ Prime, Goldman Sachs 20 THINGS ABOUT HOW INDIA EATS 165
 (‘000) (M)
AVERAGE MONTHLY NUMBERS FOR ZOMATO
800 18
600
400
17
16
VOLUME-GROWTH SLOWS;
200
0
15
14
DIALING DOWN LOSS-MAKING
ORDERS
Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24

Active restaurants Active delivery partners Transacting customers (mn) - RHS

Plateauing metrics?
ORDER FREQUENCY MONTH
3.4
Most of Urban middle white collar is already ordering online
3.3
3.2
3.1
Incremental growth has to come from upward mobility
3
2.9
2.8
Because our order frequency is comparable to global peers
2.7
2.6
2.5
Is delivery needed beyond big cities?
Deliveroo Meituan Zomato Justeat Takeaway

Source: Zomato, Motilal Oswal 20 THINGS ABOUT HOW INDIA EATS 166
 THE AVERAGE WHITE-COLLAR INDIAN DOESN’T MAKE
ENOUGH TO GET HER FOOD DELIVERED ON THE TABLE
… THEREFORE, 90%+ EAT AT HOME INSTEAD OF ORDERING IN

India China USA

Restaurant food Home cooked food

Source: Motilal Oswal, Moneycontrol 20 THINGS ABOUT HOW INDIA EATS 167
 120

100
WHAT IS YOUR LUNCH
80
BUDGET?
60

40
31.1 01
Food delivery AOV is 1/6th of DoorDash (the median
30.4 30.2
AOV on food delivery in India is likely lower)
20
5.3 7.6

0
02
Since order frequency is broadly at par with global
Zomato Deliveroo Just Eat Doordash Meituan
peers, India GMV is compressed
GMV FY22 ($ B) AOV ($)

Source: Zomato Annual Report, Motilal Oswal 20 THINGS ABOUT HOW INDIA EATS 168
 LOWEST AOV MEETS HIGHEST TAKE TAKE RATES OF GLOBAL FOOD DELIVERY
RATE; RESTAURANTS FIND WAYS... PLATFORMS
25%
20%
15%
10%
5%
Take rates for Zomato/ Swiggy are at par with global peers
0%
so there isn’t room for increase

Restaurants are raising prices to compensate

Swiggy/ Zomato are adding various “fees” to turn profitable

Source: BQ Prime, Goldman Sachs 20 THINGS ABOUT HOW INDIA EATS 169
 HOME COOKS ARE AS
EXPENSIVE AS GETTING
DELIVERY.
YET YOU CAN GET A FULL
MEAL FOR ~ $1

NO STARTUP OFFERS A $1 MEAL YET!

Source: YouTube 20 THINGS ABOUT HOW INDIA EATS 170

 MAKE IN INDIA SOLUTIONS– WHICH PARTS ARE INVESTIBLE?
FOOD PLANT-BASED MEAT PACKAGING SUSTAINABLE DELIVERY GREENER WITH EVS AND DRONES

MEITUAN’S DRONE FOR FOOD DELIVERY

Source: YouTube ThePackHub, McDonalds 20 THINGS ABOUT HOW INDIA EATS 171
 TIME FOR HARDWARE TO CATCH UP?
INTEGRATION OF AI IN RESTAURANTS… … AND IN THE HOME KITCHEN

Robots can create customizes cuisines Autonomous food delivery

using instructions vehicle

On-premise dining waiter robots

delivery food order to Robot making an espresso Smart coffee maker Kitchen assistant
restaurant patron

Source: Forbes, Google images, Twitter, ottonomy.io, Techcrunch 20 THINGS ABOUT HOW INDIA EATS 172
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INDIA INSIGHTS BY INDIA QUOTIENT 173