Overview of export opportunities for Indian businesses
Google India and KPMG recently released a report titled ‘Indian Brands Going Global: A USD39 billion opportunity’. The report has highlighted the emerging business opportunities for Indian businesses in international markets across key sectors.
Travel, media, entertainment, SaaS (software as a service), consumer brands and real estate are the key verticals, suggested by the study that offer a potential of USD 39 billion worth of export opportunities for Indian businesses.
All thanks to digitization! The report states that digital influence is increasing on consumers, worldwide and digital medium is gaining prominence as a key sales and marketing channel for cross border e-commerce trade which is expected to grow at a CAGR of 25 percent to approximately USD1.5 tn in 2022.
Key factors driving growth in international cross-border e-commerce
Shifting composition and direction of India’s foreign trade
There has been a significant shift in India’s position in global trade, it is evolving both in product mix and destination markets. Today, Indian exporters are increasingly focusing on engineering products, pharmaceuticals and technology-based value-added products, as opposed to the traditional exports like gems, precious metals and mineral fuels.
Moreover, India’s export destinations have also become more diversified – the top 20 destinations account for approximately two-thirds of total Indian export, with the US being the top destination for export goods from India. Thus, Indian brands need to reinvent their international focus i.e. they should focus on high growth markets, while leveraging their competencies by:
- Establishing an omni-channel presence,
- Adopting an international digital marketing strategy,
- Incorporating technology-driven insights in sales and marketing, and
- Focusing on mobile-first platforms.
Indian companies are seeing developing countries as lucrative export destinations, instead of established economies.
Here’s a comprehensive overview of key sectors that offer immediate opportunities to the digital businesses in India.
5 key profitable businesses in India with high potential international opportunities in 2017-2022
1. Key areas for Indian travel providers
According to Google -KPMG report, the travel industry is expected to grow at a CAGR of 18% to USD 3.1 bn by 2022. Asia-Pacific and Middle East are predicted to be the broad focus markets while UAE, Indonesia being the high potential markets for Indian Online Travel Agency (OTA) service providers. Travel providers should focus on key emerging markets globally via digital channels to attract passengers.
First-time fliers from emerging markets (such as Mexico, Turkey, etc.) are a lucrative customer segment. Medical tourism market in India is likely to grow by 3 times in the next five years and Latin America, South East Asia and Eastern Europe are focus geographies for Indian OTAs globally.
International traveler inflow into India is also expected to grow to 12.8 million by 2022 and accommodation spends by international tourists in India to grow at approximately 14 percent.
2. Key areas for Indian SaaS providers
The global SMB SaaS segment is expected to grow at a CAGR of 36 per cent over the forecast period (2017-22). Key growth drivers enabling growth of Indian SaaS market are availability of low cost talent pool, ecosystem readiness, capabilities in mobile product development and growing demand for SaaS. In this growing Indian SaaS market, communication tools, file sharing and customer engagement are the key SMB SaaS segments.
SaaS adoption as well as cloud first digital transformation are gaining prominence worldwide, that are expected to enable Indian SaaS players to leverage international growth opportunities.
3. Key areas for Indian media and entertainment companies
The market size of Media and entertainment market in India is expected to reach USD43 bn by 2022 from USD22 bn in 2017. Media and entertainment market includes audio entertainment; broadband, video entertainment; books, magazines, newspapers; and other publishing, advertising and gaming platforms. Consumer spending on this market is expected to grow at a CAGR of approximately 5 per cent between 2017-2022.
South East Asia, Malaysia and Philippines are the lucrative markets offering new opportunities for the music players, whereas NRI (Non-resident Indian) markets like the US, UK, UAE and mobile first markets like Brazil are the high potential video markets. For gaming, lucrative mobile gaming markets are Indonesia, Philippines and East Europe.
Opportunity areas which Indian media and entertainment companies should focus in international markets include mobile-first, locally consumable content, innovative payment modes and customer engagement initiatives and merchandising &IP/licensing.
4. Key areas for Indian real estate developers
The sales opportunity for Indian real estate developers from NRI customers is predicted to grow at a CAGR of 17 %, with NRI customers being the primary source of superior long-term returns for realtors. UAE (20 per cent), the U.S. (18 per cent), U.K. (7 per cent) and Canada (6 per cent) are the key source countries for NRI investment.
Indian real estate developers could tap into the NRI and HNI (High net worth individual) customer base by focusing on key areas – one stop solutions for NRI real estate needs, dedicated NRI portals with a focus on brand building, targeted digital marketing campaigns and offline property launch events, enhanced user experience through virtual walkthroughs and drone-based views.
5. Key areas for Indian consumer brands
Consumer brand market in selected retail verticals is expected to grow to USD 2.64 billion by 2022 at CAGR of 12%. Asia-Pacific is the fastest growing apparel and consumer durables region, whereas China, Vietnam and Indonesia are rapidly growing jewelry markets. Rising online retail penetration and demand for branded products are driving markets globally. Low-cost production capabilities across the value chain will enable Indian brands to offer local but niche consumable products.
So, for Indian businesses, it’s time to grab the opportunity gains from the shifting digital landscape.
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