Google India and Southeast Asia Head and one of the most prolific angel investors in India, Rajan Anandan said that as purchasing power of consumers today is not yet sufficient to help internet companies deliver profits, it will take ten years for Indian e-commerce giants to transform into large businesses.
According to Rajan Anandan while internet adoption and usage is increasing rapidly, the country's largest startups are yet to devise solutions that will attract this new set of customers. He sounded the alarm bell at an event organized by venture capital firm IDG Ventures India on Thursday in Bengaluru.
India has a very large internet user base but a very small addressable market for the businesses we have decided to build so far. That's when we will be able to build companies that not just have large user bases but have large revenues and most importantly large profits.
Anandan's comments come at a time when India's digital consumption graph is showing signs of flagging, as the largest online retailers pull back on discounts. This comes overseas internet companies have also been making significant headway, creating a land grab situation for users.
He said that every single Indian Internet company that they have tried to build till date has tried to mimic a US or a Chinese business model, which actually have significantly higher households with disposable incomes.
Many expect that if these companies lose their top slot, it will be hard for India's internet entrepreneurs to attract same amount of capital. But Anandan said that while copycat ideas from US and China will take time to become large business, companies leveraging technology and internet to solve India problems will become big in the coming years citing potential in banking and IT services.
Anandan said that he believe that really big breakthroughs will not come from internet businesses that we envision today. His strong view is that the big internet driven businesses in India will be based by disrupting the biggest profit pools of India.