Are they a threat or an enabler for Large Brands.
India, as a country is evolving and is going through one of its best phases since Independence. There is a positive feeling across all sectors after the 2008 recession, and the industry at large is set for humongous growth.
By 2025 India will be the world’s largest populous nation with a population of 1.4 Billion, and will boast of workforce as large as 899 Million.
While this positive trend looks promising, there is also the threat of unemployment looming large as there are not that many enterprises and job opportunities that can provide employment opportunities to this large workforce.
There are likely to be 70 Million people in India, who will be without out employment, and hence arises a need for skill development & self-employment will have to play a critical role in bridging this gap.
This growing trend has given rise to a lot of innovation and start-ups are mushrooming across the country except for states like Assam, Odisha, Bihar, Jharkhand, Chhattisgarh, Uttar Pradesh & Uttarakhand.
Fuelling this trend is also the fact that many people are loosing their jobs in the corporate sector, and many more are jumping into the innovation and “Make in India” Bandwagon.
There were 3100 start-ups in India in 2014 and the number is expected to touch 11,500 by 2020.
The initial days saw new age start ups from the tech service Industry alone, but today there is a paradigm shift, which is happening across the product space as well. The entry of VCs and angel investors are fuelling innovative entrepreneurs, who have a solid plan to back their ideas, and turn them into reality.
These new age firms are being lapped up by consumers at a very fast pace, and many large companies are acquiring these start-ups to consolidate their portfolio and safe guard their markets. Some of the recent acquisitions will only validate the fact that large brands are no longer sitting comfortably and have started looking at these new ventures as a serious threat to their business, and facts prove that large brands are loosing market share to these new age sleek and agile companies.
A start up is a different animal by itself and large brands will never be able to fit into their shoes.
Factors fuelling the growth of start up:
- >A Need that has to be fulfilled
- >A Gap that has not been addressed by existing brands
- >Evolving consumer consumption habits
- >Technology enablement to fortify existing services
- >The overall change that the internet & technology has bought about by making life simpler for humans.
- >These agile startups are posing a serious threat to brands and have started eating into their pie, and factors contributing to their success are:
- >They have found the niche need, which the current brands are not addressing
- >They are agile – can hear, assess and respond to market dynamics very quick unlike a large brand
- >They are constantly trying to make life simpler for the consumer, by allowing him domore in less time
- >They have beenable to package their offering in a novel way, which is line with the times.
- >They are able to create a disruption in the market with aggregation of services & products
- >Omni channel, which will predominantly drive the sales across all segments, and the time taken by large brands to get on to it.
According to Jeremy Bassetm, Unilever’s Global Marketing Strategy Director, big brands should fear disruption from smaller, nimbler businesses but shouldn’t make the mistake of trying to become a start-up.
Rather these brands should become mentors, and help the young entrepreneur’s develop their products and co exist, benefit from their learning, as competing with them will lead them to loose out on time to market & eventually some % of market share.
The Unilever Foundry is proof of the direction in which they are headed, and till date they have received about 3000 applications from start-ups, seeking support & mentorship.
This trend will continue to grow at a similar pace, and India Inc will witness a surge in the economy, job opportunities, growth of new age innovative entrepreneurs, and an industry consolidation that will happen in the years to come!