India’s startups are coming of age. Flush with funds and hard-won experience from its multitude of diverse markets, a steady stream of firms are now venturing abroad. The last few months have seen a flurry of announcements, from OLA’s expansion down under to Indian hospitality’s most valued firm OYO clocking breathtaking growth in China.
All said, ‘new age’ Indian firms built on leveraging technology platforms now have a significant presence in markets as varied as West Asia, Southeast Asia, the United Kingdom (UK), Australia and New Zealand. Online travel firm ClearTrip gets over 40 per cent of its revenues overseas, has bought Saudi Arabia’s Flyin, and commands 60 per cent market share in the United Arab Emirates. Others like content firm WittyFeed and healthcare facilitator Practo also have significant foreign operations.
How these firms are succeeding so far away from home is best illustrated by two of India’s biggest and most valuable startups: OYO and OLA. The former now has more rooms under its badge in China (180,000 plus) less than a year after its launch there, than here. Industry sources say OLA is very close to achieving profitability in Australia and New Zealand, and is steadily expanding in the UK — all three are markets it began operations in just this year.
A running theme is the experience of having built businesses in India — which boasts an entire spectrum of consumer segments. Forced to solve for extremely disparate consumer preferences and behaviour right from the go seems to have offered learnings readily transferable to many, if not all, new markets these companies are venturing into.
As OYO’s founder and Group CEO Ritesh Agarwal tells this paper, it is important to first “create competencies and then scale in a product in the home market” before venturing overseas. With large scale customisation per local preferences a prerequisite, adaptability learned at home is giving these companies a strong headstart.
“OLA for instance, is the only platform that integrates UK’s iconic Black cabs and regular driver partners on one platform — a strategy first implemented with autorickshaws and kaali peelis,” noted one industry source. OLA, for its part, says that “India’s diversity allowed for a range of innovations” and “expansion outside Indian borders was, hence, a natural next step”.
With sprawling backends ‘tested OK’ in the rough and tumble back home, these firms might boast a resilience rare in new non-local brands. But, there are many pitfalls to watch out for too. Not least of which is the high cash burn-rate, a factor that forced Zomato to drastically scale back its overseas operations.