The Online Product Opportunity
By: Amit Bhushan Date: 3rd June 2016
The deal season around online/mobile products seems to be back once again with the US Cab-hailing business valuation rising. Although we still have songs going around that Indian online product operators are facing much more challenges. True that the valuation in developed world are a bit easier since the magnitude of opportunity can be measured much more easily as most transactions may already be recorded due to card/wallet-based transactions and majority having access to these online business tools.
Added to this is the fact that the currencies and policies are stable and investors feel more comfortable in such an environment. Added is the additional fact that these online ventures are able to guide regulators in other countries to evolve suitable policies almost with near predictable regularity and their thus their global business thrives.
Since valuation is not something their counterparts in developing world with similar technology can command so the play has to be different. The opportunity for their counterparts in developing world might not be basis valuations but instead basis partnerships. The entities here can evolve suitable & willing partners in other emerging markets who may also help them tweak such online products suitably in line with local regulations/customs/practise and evolve a multi-geographic business.
It may actually help that many emerging economies are trying to simultaneously develop their access for their populations to avail internet bandwidth and telecom access. Besides technology, these markets may also face linguistic barriers, low transaction sizes, low usage of online payments methods and service outages amongst others. An ability to simultaneous launch of a plethora of services on the improved bandwidth helps them to capitalize upon such investments much faster and the populations get an opportunity to leapfrog technologies, which allows them to catch up with their counterparts in developed world much faster. In the prevailing situation many emerging markets may already be hard pressed to create domestic jobs since they may have seen the commodity jobs falling and infra investments shrinking in tandem. It helps that many of the Indian product companies have been facing nearly similar challenge back home to compete in similar situations and have invested in developing skill-set that helps tide of similar problems back home.
While we have seen many new ventures coming up with innovative offerings in the market, however not many stories about how a partnership of a local Taxi-hailing company in say Namibia may have beaten the shit out of global major Uber or how a local wallet players technology & services is a hit in say Bolivia. What we have instead is a requiem of many technology players since they are unable to figure out how would they survive in the tough and highly competitive Indian market where very few of them have been able to get the attention and money of global venture capitalists and market limitations for a limited number of players due to adoption being low.
The concentration about valuations or die leads one to ignore possibilities about partnerships riding upon the business valuations of the partners in other emerging markets. This is even as the leaders in government announcing that India is open to business for the World (& this may be around self-promotion from all the bells & whistles around the campaign) and boast about start-up especially tech-based start-ups thriving to capture a share of the global pie.