Introduction

In the contemporary landscape of India’s technological evolution, a convergence of transformative forces has been quietly but resolutely reshaping the nation’s socio-economic fabric. Digital transformation, AI, ML, platform business, and open networks have emerged as pivotal catalysts of India’s transformation into one of the world’s digital powerhouses, ushering in an era characterized by unprecedented connectivity, innovation, and paradigm shifts across industries. 

 

At Boundaryless, we’re lucky to have worked with Indian companies and teams, which has exposed the dynamicity of such a market. We genuinely believe that understanding India’s ecosystem of opportunities is essential for any player of a modern, globalized economy and we’re thus embarking on a series of articles and webinars to help you do just this. Learn more about this program, by subscribing to the form that you will find at the end of the piece.

 

Today, we will be exploring – 

• India’s Decentralized Network heritage
• Digital Transformation in India
• India’s online Marketplaces industry
• Service Productization
• Next Gen Finance
• The specific Role and Growth of Agritech 
• Government Policies and Actions
• Future of Organizing

 

Let’s jump right in.

 

India’s Decentralized Network Precedes Formalized “Network Business”

Growing up in India, like one of the authors did, meant always being amused by the country’s entrepreneurial spirit and the social nature of business. While many instances show how ecosystemic operations are ingrained in the Indian way of life, one that cannot be missed is ‘The Mumbai Dabbawala’, a quintessential decentralized business that has existed since 1890. For the uninitiated, the dabbawalas are a complex network of men making food deliveries – and what they do is simple, or is it? The network, as it is today, has over 5000 members who deliver over 2 lakh meals prepared in customers’ homes to their offices and then return the empty dabbas (lunchboxes) every day.

 

Touching on four primary pillars of work, the dabbawalas focus on organization, management, process, and culture, and always achieve a perfect balance at that. A study conducted by the Harvard Business School found that there were fewer than 3.4 errors per million transactions, and this is a testament to India’s ability to excel at complex businesses.

 

 

Fast Forward to Today

Amid a sweeping global transformation, the digital and networked way of business has asserted its influence strongly in India. Especially fueled by the pandemic’s urgency to digitize, sectors like education, payments, and retail have undergone seismic transformations.

 

At the heart of this transformation lies the platform economy, as an embodiment of the future of work. The platform economy’s profound impact resonates across India’s key sectors, catalyzing changes that reshape consumer experiences and industry landscapes. While SaaS, e-commerce, ride-sharing, logistics, food delivery, education, and other future-tech businesses (fintech, agritech, health-tech, etc.) have taken center stage, there is almost no stone left unturned in India’s business revolution. All of this digitalization is said to have a potential value of half a trillion dollars (i.e., USD 500 billion) by 2025.

While – historically – India’s contribution to the IT-BPM revolution has been a flag bearer enough for the potential of its technology prowess and contributions to the world, platform ecosystems have uniquely enabled digital businesses to seep into all hierarchies of society. 

 

This rapid pace of digitization is further aided by India’s demographic dividend of half a billion labor force, the world’s youngest population, rapid urbanization, widespread adoption of smartphones and associated technology, low-cost data access, and an overall upheaval of the internet industrial revolutions.

 

To quote some fascinating numbers:

• Internet users are projected to increase by 44% from 2022 to 2030, accounting for 1.3 Billion digital consumers.
• The Indian Startup ecosystem has garnered lifetime funding of over $136 Bn.
• E-commerce and fintech had a 33% share of all fundings in 2022, and interestingly the popularity of Blockchain and Web 3 Startups placed deep tech in the top 5 startup sectors in terms of mega-deal count.

 

 

All of this goes to show that high-growth and new-economy businesses, including online platforms, have brought many benefits to users and partners, and socio-economically for the country as a whole.

 

While the tech industry is booming and India’s technological prowess extends across various sectors, for today’s article, we have chosen to narrow our focus to four specific industries where Indian tech has exhibited remarkable excellence. These industries have truly bestowed some of the most exceptional products and innovations that we witness today in the global scenario.

 

 

E-Bazaars Everywhere

It’s imperative that we start with marketplaces when it comes to India, considering the mammoth impact it has created on the ecosystem. With India’s $3.75 trillion economy expected to grow to $6 trillion within the next decade, the digital economy is expected to contribute a colossal 5% to India’s GDP by 2027. Marketplaces in India today are ubiquitous across every major business category, already contributing over $100 billion in gross merchandise value (GMV). While B2C e-commerce marketplaces have been the largest segment, contributing $50 billion in this, the B2B marketplaces are surely not left behind. 

 

As of 2022, only 1% of all B2B transactions were completed digitally, and this marks a highly untapped market. Product and service marketplaces along with marketplace infrastructure startups are emerging as the top 3 categories, expecting to take B2B marketplaces to the $200 billion mark by 2030. While the key factors contributing to this growth originate from India’s consumer and business-level digital transformation, it’s worth looking into how global changes in sentiment, such as China’s Plus One strategy (the idea of investing not only in China but diversifying business into other countries, channeling investments into other promising developing economies such as India’s), are effectively expected to have a significant impact in India’s journey.

 

All this growth has had an immense ripple effect. Marketplace models like e-commerce, food deliveries, ride hailing etc… have significantly improved financial inclusion by providing traditionally underbanked segments with greater access to capital, and also provided a major boost to the gig economy.

 

 

India’s Marketplace Front-runners

 

What comes next? Well, trends show that upstream B2B marketplaces, fintech marketplaces, and logistics marketplaces are where all bets are being placed. The scale of marketplaces is expected to focus towards expansion of digital solutions for Tier-3’s (example – development of vernacular solutions), and opening up of global cross-border opportunities. 

 

 

Service Productization

The SaaS industry has been the first to bloom in India, following the IT-BPM era. With most IT solutions transitioning online, Indian businesses were one of the first to jump at the opportunity of offering software solutions in their repertoire, and we just can’t miss speaking on it. 

 

SaaS’ impact has been significant, in that it represents India’s capabilities that can aid global market requirements. With “India-first” companies like Perfios, and “Global-first” companies such as Zoho, the market is expected to reach $50 billion of annual recurring revenue by 2030. The furthering of AI integrations in SaaS is predicted to make India the clear front-runner, overtaking its global counterparts, and making the future of Indian SaaS one to watch out for.

 

While we are here, it’s also interesting to note the general role that AI has played in an Indian context. AI adoption is rapidly increasing among Indian software developers. A significant 46% of Indian developers are already integrating AI into their tools, making India the second-highest AI utilizer globally. India has also become a prominent hub for open-source AI projects on platforms like GitHub, with the value of AI in various aspects, such as improving efficiency, enhancing coding, fostering collaboration, boosting productivity, and accelerating learning becoming some of the key drivers.

 

In the context of SaaS, for instance, several Indian companies such as Leena.ai, Plobal Apps, and Pepper Content, are at the forefront of this transformation, offering AI-powered solutions in various domains, including HR service delivery, AI for mobile app development, and AI-enhanced content marketing.

 

All of this ensures that the combined rise of AI in India, along with the country’s robust software development ecosystem, positions Indian companies to lead the global shift towards the productization of services.

 

Next Gen Finance

The Fintech sector in India now accounts for a 14% share of the global funding in this sector, ranking it second in total deal volume. Financial inclusion initiatives in India like the PMJDY (enabling the provision of basic banking accounts with in-built debit cards), DAY-NRLM (skill training), and Direct Benefit Transfer (subsidy transfer mechanism) among others have accelerated the digital revolution and brought citizens, especially in rural areas, within the ambit of digital financial services.

 

With India recording the highest FinTech adoption rate of 87% against the global average rate of 64%, FinTech is projected to be India’s next big impact sector globally. Several paths are expected to shape the industry in the coming years, including digital lending, alternative credit scoring models, open banking, etc.

 

 

Additionally, the impact of AI and ML in the use of personalization, fraud detection, cost savings, efficiency improvement; and blockchain’s contribution to making fintech secure and transparent, are some early trends that can be noted. In this context, companies like Credit Mate (debt collection), LendingKart (creditworthiness), M Swipe (merchant onboarding), and Zaggle (spend management) are a few brands that have created waves in the industry.

 

 

Tapping “India’s Essence” through Agritech

How can we miss talking about the agritech industry, when India is often regarded as a global agricultural powerhouse thanks to its diverse agro-ecological landscape? Representing about 16% of the GDP and employing 44% of the workforce, the agriculture sector is one that simply cannot be overlooked in India’s digital story.

 

Despite its significance, the sector has always faced challenges like low yields, post-harvest losses, and fragmented landholdings. The truth is, India today lags behind developed farming nations in agritech, and this might also be owing to the sector’s inherent disadvantages in India: lack of basic farming equipment, heightened risk of crop damage from pests and weather, and lack of access to traditional financing sources, being a few reasons.

 

However, this poses an opportunity for correction and growth. And, this is where the digital revolution steps in with Agritech. With a keen focus on digital advisories (for informed decision making), market linkages (connecting buyers and sellers), supply chain tech, and fintech solutions, the Agritech market in India is expected to touch $24.1 billion by 2025.

 

 

VCs investing more than $1.2 billion in 2022, a 50 percent increase from 2021, can further highlight this growth, indicating that start-ups are maturing in this market despite a general economic slowdown during the past two years.

 

And, what can we expect next? Well, last year was marked by convergence and consolidation of the sector, and the growth of technology-driven value creation and we can certainly expect to see more of this in 2023. 

 

With companies like CropIn Technologies, Waycool Foods, DeHaat, etc. investing heavily in future tech solutions, and revolutionizing the farm-to-fork processes, the right interventions are underway for India’s Agritech story. With this, India has potential to become a global leader in sustainable and tech-driven agriculture, and is even expected to create a socio-economic impact of propelling farmers’ income by 25 to 35%. 

 

 

Government Policies and Actions

The Indian government and policy structures in recent years have also significantly aided the digital and technology revolution. A starting point is knowing the initiatives under India’s Digital Public Infrastructure (DPI) ecosystem, commonly known as “India Stack”. The DPI is a collection of technological systems, services, and platforms that enable the Indian government, businesses, and citizens to interact digitally. It operates as interconnected yet independent “blocks” that serve as identity, payment, data sharing, and consent mechanisms. Built on modular layers, the India Stack creates opportunities for innovation, competition, and inclusion in the digital realm. 

 

Among the popular initiatives under this umbrella are ones like the Unified Payment Interface (UPI), Aadhar, and eKYC, which have paved the path towards technology integrating into India’s everyday life. Whether it’s the Aadhar, the world’s largest biometric ID system, or the UPI – which just clocked its highest-ever number of transactions at 9.41 billion in May 2023, with a total lifetime value of Rs.14.3 trillion, Indian digital infrastructures have created revolutionary standards worldwide.

 

 

In a more recent example, the 2023 Union Budget has also placed significant emphasis on digitization, envisioning a technology-driven and knowledge-based Indian economy. The government announced the establishment of 3 AI centers that would likely focus on various aspects of AI, including ML, Deep Learning, NLP, and Robotics in industries like healthcare, agriculture, finance, and smart cities. Several major state policies were also introduced recently, indicating movement towards open networks, including the establishment of local policy hubs, seed funding allocations, innovation hubs, and accelerator programs, among the rest. With all this, India’s digital economy is growing 2.4 times faster than the global economy, rightly inviting all funding bets here.

 

And while all this growth has significantly enriched the socio-economic landscape, Indian organizations are dedicated to fostering even greater empathy, inclusivity, and accessibility moving forward. In a densely populated country like India, there’s a clear imperative to thoughtfully address and evolve from the current state of affairs. Addressing some of these limitations, such as the underutilization of skills in gig economies, gender disparity, limited accessibility, and infrastructural hurdles, India is determined to proactively make progress. One key strategy that the NITI Aayog (the Indian government’s public policy think tank) is looking at is the establishment of a consultative policy mechanism that places users at the heart of decision-making.

 

Such approaches are poised to catalyze the ongoing transformation and ensure that progressive digitization will coincide with socio-economic advancement, increased employment opportunities, and a host of other positive outcomes. 

 

Before we go onto the next section, discussing the future of organizing, you can give this piece by Pramod Varma a watch. Discussing the dominance of bigtech aggregator platforms and the reduced control individuals have over their data, it highlights how India has approached policymaking for a world shifting from centralized platforms to decentralized networks. 

 

Future of Organizing (Markets)

What’s next? Well, India, following its current progress, is looking to be a global leader in creating impactful businesses and transforming the way people work. This leads us to our last, and arguably one of the more intriguing initiatives by the Indian ecosystem that is enabling the future of organizing – a decentralized digital infrastructure initiative – the ONDC.

 

The “Open Network for Digital Commerce (ONDC)” is an initiative by the Department for Promotion of Industry and Internal Trade (DPIIT) to democratize e-commerce by transitioning from a platform-centric model to an open network model. This platform aims to set standards in creating open networked businesses, thereby ensuring long-term fair practices and unbiased compliances. A first of its kind, the ONDC enables merchants and consumers to transact on any platform, promoting open networks built on open-sourced methodologies.

 

 

ONDC’s strategic report leaves us with something to think about, “Solving a problem at such a scale necessitates a paradigm shift from an operator-driven monolithic platform-centric model to a facilitator-driven, interoperable decentralized network.” We at Boundaryless have been closely observing and studying such futures of organizing, and for those who are interested, our latest “Research Compass,” will give you an insight into this.

 

In all, it’s safe to say that we are thoroughly excited and keen to explore the endless potential that the future of business holds and what India has to offer in this context. As India’s technological canvas continues to evolve, it beckons us to be both witnesses and active participants in this journey of innovation and progress.

 

 

In Closing 

There’s a lot that’s discussed in this article, and we hope to deep dive into this market increasingly. The Indian landscape has demonstrated, time and again, of its technological prowess and its capability to shape, and shift global narratives – and this gets us truly excited and on the edge of our seat. 

 

We hope that companies and individuals alike take inspiration from India’s story, and scale digital transformation, embrace local ecosystems and nuances, focus on inclusivity, and simply benefit from the power of communities and networks. While some of India’s policies and government initiatives have been path-setters for global counterparts, in the digital realm, it will be interesting to see how these practices become increasingly open, sustainable and socially beneficial.

 

To our readers – we believe that staying abreast of India’s journey will be beneficial, and hope that we, at Boundaryless, can aid in this process. Linked below are few of our recommendations for resources that can help you in staying on the ground on Indian developments – 

 

• VCCircle
• Inc42
• Forbes India Tech Conversations
• TechGig Podcast
• Some Indian Thought leaders – Nandan Nilekani, Rishad Premji, Ashwin Mahesh, Ester Martinez, Rishikesh Krishnan, Pramod Varma to name a few. 

 

An active measure we are thrilled about launching is introduced below.

 

 

Coming Soon: A Series of Boundaryless Webinars 

We take this as an opportunity to announce an upcoming series of webinars that will delve into the heart of India’s technology and organizational evolution. Covering the four pivotal sectors we’ve discussed – Marketplaces, Indian SaaS, Fintech, and Agritech – these webinars promise insightful discussions and expert perspectives. We’ll be hosting distinguished guests from each of these ecosystems, offering you a unique opportunity to gain firsthand knowledge and engage in meaningful dialogues. 

 

If you want to stay tuned for the upcoming releases and program and for more details on future dates, speakers, and topics, please subscribe from the form below.

 

Article References – 

• UPI transactions at record high, clocks 9.4 bln in May’23, BFSI News, ET BFSI (indiatimes.com)
• The Rise of SaaS in India 2023 – Bessemer Venture Partners (bvp.com)
• What is ONDC, Open Network for Digital Commerce Features (business-standard.com)
• Financial Services Sector in India | Fintech Industry in India (investindia.gov.in)
• The Growth and Future of Fintech in India: Trends for 2023 (bsebti.com)
• India’s Digital Public Infrastructure (drishtiias.com)
• The Growth and Future of Fintech in India: Trends for 2023 (bsebti.com)
• The future of Fintech in 2023 (indiatimes.com)
• Indian Tech Startup Funding Report 2022 – Inc42 Media
• Digital economy has a New Global Captain – India (indiatimes.com)
• Open Network for Digital Commerce Report – January 2022
• Digital India – What is Digital India? (cleartax.in)
• Investing in India’s Digital Revolution | IBEF
• Digital India Programme
• Digital Business Laws and Regulations Report 2023 India (iclg.com)
• Platform Economy: Way forward for India’s fast-track digital enterprises, governance, ET Government (indiatimes.com)
• Budget 2023: Staying ahead on the Digitisation curve (investindia.gov.in)
• Exploring India’s Platform Economy – Spontaneous Order
• Bessemer sees $200 bn market in online B2B marketplaces in India | Mint (livemint.com)
• The Rise of Digital Bazaars in India | Bain & Company
• What Does 2023 Hold For Indian Agritech Industry? (inc42.com)
• The Rise of Agritech in India (investindia.gov.in)
• How agtech is transforming agriculture in India | McKinsey