Past decade has seen India rising the charts in world GDP rankings. As of April 2015, India is ranked No. 3 in GDP based on Purchase Power parity (PPP) valuation (Source: knoema.com). It has been a reflection of our sheer populace, consumerism trends, rise in disposable incomes, opening economy. However, in recent 2 years, rise of mobile consumer applications has brought in a multiplier effect for the whole economy, akin to the icing on the cake. An 8 years old FlipKart is nearing a valuation of ~30 Bn US$ after the proposed $5Bn IPO at NYSE, very comparable to valuation of 20 years old Infosys Technologies ( 42 Bn US$)(Source:Wiki), and even Tata Consultancy at 80 Bn US$ (Source: Wiki).
This blog is discussing the wealth effect and future promise that consumer mobile applications have brought to the entire economy.
The consumer applications, attract venture capitals (mostly VCs based outside India) like Jasper, Alibaba, SoftBank and scores of others to invest in their operations. Look at the funding some of the leading consumer applications have received.
|Flipkart||$2.5 Billion in 11 Rounds from 16 Investors; 9 acquisitions.|
|SnapDeal||$1.1 Billion in 8 Rounds from 16 Investors; 8 acquisitions.|
|OLA||$676.8 Million in 6 Rounds from 16 Investors; 1 acquisition.|
|PayTM||$200 Million in 2 Rounds from 2 Investors|
|JustDial||$67 Million in 2 Rounds from 2 Investors + IPO in 2013|
|… to count a few.|
As the billions of dollars flow into the operations, it creates a ripple effect of wealth to web cos, print cos, ad companys, besides, job opportunities, taxes to govt. Inflow of foreign capital improves the Balance of Payment (BoP) deficit, improves situation of high dollar demand, in turn easing the cost of oil import and bringing relief to whole nation.
Adam Smith phrased ‘The Invisible Hand’ theory in his book ‘The Wealth of Nations’. The mobility is adding strength to that Invisible hand. Alvin Toffler mentioned IT as the 3rd wave after Agriculture and Industrialization. I am sure he would be watching, the 4th Wave is the mobility.
Traditionally India has been known to be a strong & lucrative market. The consumer applications are turning country into a strong industry.
Expansion of these brands outside India will be the new turning point for the whole country.
Mahindra Comviva, itself strongly believes in creating D2C brand value, while leveraging mobile payments or entertainment content opportunity to name a few, and I could see a light at the tunnel-end and a huge possibility.