Boston Consulting Group (BCG) has named 17 Indian companies that are driving the digital revolution in emerging markets as well as globally.
India is a fast-growing economy along many criteria:
- GDP: IMF estimates for GDP growth at constant prices show India should grow at 7.4 per cent in 2018. This is the world’s seventh-highest rate.
- Indian companies have an access to a heavily digital consumer base in India: The number of online shoppers in India has been growing by 45 per cent p.a., which is the second-highest figure after Indonesia (66 per cent). Digitally-influenced spending in India will increase to more than $500 billion by 2025.
- Indian consumers have the highest readiness and openness to innovation worldwide: 85 per cent of survey respondents reported likeliness to ride in a self-driving car, compared to 30 per cent in Europe and the USA.
Disproportionally large representation of Indian global challengers (17 per cent) on the 2018 list reflects the relative size of India’s national economy.
- India is the second-most represented country on the global challengers list and hosts 17 challenger companies. China is first and hosts 25 companies on the list.
- These 17 Indian challengers have experienced tremendous revenue growth: four times more than S&P 500 companies, keeping margin levels high in the last five years.
- However, only 3 per cent of unicorn companies come from India, which is still low compared to China with 33 per cent.
- Half of Indian challengers are concentrated in the industrial goods sector, TMT, and health care.
Indian challengers are going digital. Nowhere is the trend toward digitisation more evident than among the 17 Indian challengers who are leveraging digital technologies to win both locally and globally, with multinationals. Reviewing the last five years, BCG sees a major shift toward digital adoption. The majority of Indian global challengers — 71 per cent compared to the average of 100 global challengers with 59 per cent — is leveraging digital capabilities to succeed.
Indian challengers develop their digital capabilities in three main ways.
- They invest in internal innovation programmes and R&D.
- They pursue partnerships and join digital ecosystems or establish their own.
- They acquire digital capabilities through M&A and private investments in start-up companies and technologies.
Godrej, Sun Pharmaceuticals, Reliance Industries, and Mahindra & Mahindra are global challengers in 2018 who achieve their leadership positions by leapfrogging their developed-market counterparts and disrupting existing business models.