There was fear in the minds of many people that deregulation in India would flood India's market with foreign goods Indian companies couldn't compete with. 25 years later, not only was that fear unfounded, but some Indian companies are giving foreign companies a serious challenge in their own markets. While most of these business ideas might already have been introduced elsewhere, some of these emerging Indian businesses have managed to give the existing players a tough fight and in some cases even eclipse them.
India has also managed to produce its set of Unicorns (start-ups valued upwards of the US $1 billion). The list of top Indian Unicorns is led by e-commerce poster boys Flipkart and Snapdeal, followed by mobile advertising firm InMobi, cab aggregator OlaCabs(known widely as Ola), restaurant search website Zomato, data Analytics firm Mu Sigma and mobile payment company Paytm.
Oren Hydrocarbons is one of the few companies in the world manufacturing fluids for oil and gas exploration. Started in 1990 by geologist Rizwan Ahmad and based in Chennai, the company has manufacturing plants in the Indian states of Tamil Nadu, Andhra Pradesh, and Gujarat and globally in Saudi Arabia, UAE, Egypt, and Iraq. Its operations are global in nature, and it is estimated that 5% of all wells drilled globally use its products.
E-commerce website Flipkart has grown to become the largest e-commerce player in India, revolutionizing the way Indians shop. Flipkart was started in 2007 by two ex-Amazon employees Sachin Bansal and Binny Bansal and has already received funding from many major private equity firms. As of May 2015, Flipkart had a valuation of 15.5 billion. The e-commerce market in India is expected to grow rapidly in the coming years as more and more Indians get used to shopping online and as more subscribers are added online. Currently, Flipkart's closest competitor in India is Amazon.
The largest cab aggregator service provider in the country was one of the late entrants in the market. Ola was started in 2010 by Bhavish Aggarwal and Ankit Bhati but has leaped ahead of everyone in a span of fewer than five years. It received successive funding over the past six years from a number of private equity investors and is currently valued at around US$5 billion.
Started in Mumbai, India in 1981 by Sunil Shah as a single pathology lab, it now operates in more than 125 labs in 7 countries. Shah's daughter, Ameera Shah joined the organization in 2000 and led the company’s growth. The strategy revolved around getting local labs to tie-up with a larger organization like Metropolis and providing labs with adequate resources and training. It also has franchise sample collection centers that act as feeders to the main labs.
Started in 2010 by Rohit Bansal and Kunal Bahl as a daily discounts website, it changed its model to become an online marketplace, similar to Alibaba and eBay. The change in Snapdeal's business model, funding from eBay and a US$627 million investment from Softbank has helped the company compete against Flipkart and Amazon. It is currently valued at around US$5 billion.
A regional snack manufacturer based out of Gujarat, Balaji Wafers was started by Bhikubhai, Chandubhai, and Kanubha Virani. It is the market leader in the western state of Gujarat and has successfully managed to overtake Pepsico’s Lays in the Maharashtra region as well. Balaji spends very little on marketing and concentrates its efforts on expanding its distribution network; thereby, keeping costs low. The company is currently limited to these two states but has plans to scale up distribution nationwide. Balaji Wafers is valued at around US$150 million.
Started by renowned businessman SK Gupta in 1977 in Rampur, Uttar Pradesh, Swati Menthol is one of the largest Indian manufacturers and exporters of natural menthol and related products. A large portion of its revenues come from exports, and it counts some of the leading fragrance companies among its clients. It recently expanded into pine and aroma product manufacturing to cater to other industries.
VLCC Healthcare is a beauty and wellness company started by Vandana Luthra in Delhi, India in 1989. It currently operates across three lines of business: wellness, training and skin and body care products. Wellness and training compose the majority of the business's revenues. A significant number of the stores currently are owned by the company though VLCC plans to expand using a franchise model going ahead. It has already expanded into 16 countries and aims to increase its revenues five times in the next three years.
Zomato is an online restaurant search website started by Deepinder Goyal in 2008. It operates in all of the major cities of India and is one of the most visited websites in India. It aggregates restaurants on its website and app and gets revenues from advertising, consulting and orders placed to restaurants through special numbers given on its website. It is present in more than 20 countries and has information on more than a million restaurants. It will soon be offering a new food delivery service that allows customers to place orders on Zomato’s website. As a part of this new service, Zomato will take the responsibility of collecting the order from the restaurant and delivering it to the customer. In the U.S., Zomato acquired Urbanspoon from IAC in January 2015. The company raised 60 million dollars at its most recent funding round and is currently valued at around US$1 billion.
InMobi was named as one of Tech’s 50 most disruptive companies by the MIT Technology Review in 2013. The mobile advertising company started by Naveen Tiwari in 2007, it competes with Google and Apple, which allows publishers to analyze their data and deliver targeted ads. It connects content creators and advertisers and takes a cut from the transaction. It has received funding for over US$ 200 million from Kleiner Perkins and Soft Bank. Most recently, Mobile advertising platform InMobi raised about $100 million in new debt from a consortium of lenders led by US-based Tennenbaum Capital Partners.
Launched in 2008 by Pranay Chulet, it is India’s largest online classifieds portal. It allows the user to post ads for buying and selling a wide range of items from mobiles to real estate. It earns money from ads on its website and charging for premium ads. It is a capital-light business, compared to Flipkart and can expand fairly quickly.
The Bottom Line
While India has been successful in having a relatively better ecosystem for technology companies, the manufacturing sector is still lagging behind. The new government has made manufacturing a top priority to encourage more domestic entrepreneurs to set up factories.