Despite the slow adoption of augmented- and virtual-reality technologies, the nascent Indian AR/VR market is expected to grow at a compound annual growth rate (CAGR) of 76 per cent over the next five years, fuelled by demand from business and consumer sectors.
The past few years has witnessed the emergence of 170 AR/VR start-ups in the country, 60 per cent of which set up shop in the past 24 months. Bengaluru takes the lead, attracting 27 per cent of these start-ups, followed by Delhi at 25 per cent and Mumbai at 13 per cent, according to a Market Pulse Report on AR and VR, by GrowthEnabler, a data and intelligence firm on disruptive technology/digital start-ups.
Various industry estimates peg the global AR/VR market at $100-120 billion by 2021.
‘Promising future’
“It is difficult to estimate the Indian market, which is still at a nascent stage in adoption and growth of AR/VR technologies,” said Siva S Banda, Analyst at GrowthEnabler. “But from what we see of the use cases in the US, the UK and China, it holds a promising future in India, especially in the healthcare and manufacturing sectors, where hands-on work is involved while working on machinery and during surgical procedures. These can be facilitated by wearing AR/VR headsets that provide free flow of real-time information, images and analytics.”
According to GrowthEnabler’s estimates, there are close to 1,500 start-ups in the AR/VR segment worldwide, with the US accounting for nearly 45 per cent, followed by the UK, Israel and Canada.
Globally, from 2013 to 2017, the AR segment has received $2.5 billion in funding, and VR $2.7 billion.
“In India, of the 100 AR start-ups, only 5 per cent have received any form of capital investment of $1-1.5 million. Of the 70 VR start-ups, only a handful have raised any seed/angel capital. Even the top 15 AR/VR start-ups that GrowthEnabler has identified based on over 50 parameters, have collectively raised under $3 million in funding. But all that is going to change in the next five years,” Banda said.
The Karnataka governmnet is actively promoting AR/VR start-ups by providing incubation, mentoring, idea validation by experts, opportunities to deploy pilots with various departments, along with fund support for eligible ones. “We have around 50 start-ups in the AR/VR space in our physical and virtual incubation programmes” said Priyank Kharge, Karnataka IT Minister.
Scanta, a Delhi-based start-up, has built AR technology-based marketing solutions using Apple’s ARKit, for brands to interact creatively with customers through the use of mobile apps. Coca-Cola India was the first brand to use it to engage with its customers for Christmas and New Year 2016 at Cyber Hub, Gurugram.
ShilpMIS, a Surat-based start-up offers VR experiences, apps, 360-degree videos, interactive holograms for the real-estate sector. The start-up’s VR content-creation tools and services have attracted clients such as Mercedes Benz and The Advantage Raheja Group.
Smartivity, another Delhi-based start-up sells STEM (science, technology, engineering, maths)-based educational content in the form of toys, and DIY (do-it-yourself) kits that are AR-enabled. It works with schools that have integrated the firm’s products into the curriculum, and also exports to the US and Europe.
Augmenting mobiles
“Demand for AR solutions will increase as prices of headsets fall,” Chaitanya Hiremath, founder-CEO, Scanta, told BusinessLine. “Facebook’s Oculus headset, which was launched at $1,200 two years ago, has fallen to $300 today. Microsoft has its HoloLens headset; Snap has launched its glasses; Google and Apple are also coming up with headsets. We have built an AR app for smartphones, where the phone becomes your glasses.” The start-up is building AR apps for the US, Japanese and Korean markets.
He predicts 30-40 per cent of mobile apps will be AR-based in the next four years, and users of smartphones priced ₹5,000 onwards, will be able to experience AR apps in 2019.