How to innovate in high-growth markets: lessons from entrepreneurs in India


Lee Clancy, SVP Product & Mobile Strategy at Naspers. On a recent visit to India, it became increasingly apparent that the traditional tech dominance of Silicon Valley is giving way to regional centres of digital innovation.

Lee Clancy, SVP Product & Mobile Strategy at Naspers

On a recent visit to India, it became increasingly apparent that the traditional tech dominance of Silicon Valley is giving way to regional centres of digital innovation.
I regularly travel to spend time with the diverse companies in Naspers’ global organisation; the likes of PayU, OLX, redBus and Flipkart. Time and again, I observe entrepreneurs living and working in the local market who are highly motivated to solve unique, local challenges.
Local knowledge feeds innovation
The Indian bus market was chaotic before redBus. A tangled web of bus companies and services running on independent and uncoordinated routes and timetables. Buying a ticket was a logistical nightmare and navigating the continent by bus required a rare mix of patience and blind luck.
As a local company, the redBus team understood these challenges and came up with the perfect tech solution: an online journey planner and bus ticketing service that aggregates myriad services and makes travelling by bus in India exponentially easier. It’s doubtful a Western entrepreneur would have even known there was a challenge, let alone be well equipped to solve it.
Local knowledge isn’t only relevant for high-growth markets. In well-planned cities like San Francisco or Singapore, autonomous cars are the future. While stuck at a seven-road intersection with no traffic signals in Bangalore, where trucks, buses, bikes, rickshaws, and even the odd farm animal jockeyed for space, it occurred to me that driverless cars probably will have a rough future in India. However, I’m confident that someday an Indian entrepreneur will achieve Uber-esque success solving his home country’s current transportation challenges in a uniquely Indian way.
Mobile commerce is rocketing
These same subtleties impact innovation in the frenetic Indian mobile commerce space. Second only to China, India had 277M Internet users in 2015, and 81% of those consumers were mobile-only users with no history on desktop. Many of India’s new Internet consumers do not even have an email address.
When local etail leader Flipkart announced its bold plan to shut down its mobile site and pursue an app-only strategy for both its core business and its fashion etailing business Myntra, the move made tech news headlines worldwide. This aggressive move allowed Flipkart to recently become the first Android app in any category to reach 50 million downloads in India.
Flipkart and Myntra have since retreated from their initial app-only approach, but what is most interesting is the innovation that the Flipkart team has achieved since, including:

What’s truly impressive is how the Flipkart team continues to roll out cutting-edge innovations like these at massive scale. Their efforts seem to paying off, with Flipkart taking the top spot in a recent customer service ranking of Indian ecommerce competitors, besting global behemoth Amazon as well as other Indian players.
Cash is still king
Paradoxically, India’s leading mobile commerce position is not reflected in mobile payments. India remains resolutely cash-based and cash-on-delivery still dominates. Indeed, Naspers company PayU provides Indian merchants with online payment solutions that work around this behavioural preference, not against it. Many other “global” payments services are credit card based. Few Indian entrepreneurs would take this tack. In fact, there are only 21 million credit cards in circulation in India, compared to its population of 1.3 billion.
Megacities offer megamarkets
International expansion is high on the wish list of many ambitious entrepreneurs but the advantage of markets like India is that it may not be necessary to go global to achieve scale.
Bangalore is a megacity - an area of continuous urban development of over 10 million people. This offers a significant potential user base in a single location. And by 2020 there will be a greater number of such megacities in India. “We’re not even thinking about international right now because we’re staying focused on the huge US market opportunity” is a common refrain I’ve heard from many American startup founders. In a new global variant of this sentiment, several Indian entrepreneurs I’ve met recently are committed to scaling to huge audiences in the tens of millions by focusing on just one or two of their country’s megacities.
It has never been a more exciting time to be working in the global technology industry. Silicon Valley will no doubt continue as the world’s most prestigious and productive furnace of innovation, but it is clear that many other exciting innovation hubs will spring up anywhere local markets create local challenges needing local solutions.