Dispatch from my India trip ✈️

My observations on tech, culture, and more!

I spent around two weeks in India earlier this month, and I couldn’t help but notice how the developing nation is emulating the US in so many ways, for better or worse. Everything from dating culture to technology, you can sense the US’ influence on the nation’s youth for the most part.

- Digital payments are on the rise!

Digital payments have taken India by storm. Much like how peer-to-peer payment players, Venmo, Zelle, etc., have gained popularity in the US, digital payments players such as PhonePe, Paytm, and G-pay have a surprisingly high penetration in the Indian market. From street vendors to high-end fashion malls, peer-to-peer payment options have become table stakes, partially driven by India’s push for Unified Payment Interface (UPI). I was surprised when I presented my credit card to a vendor, and he said he would only accept a UPI, aka phone-to-phone transfer. While it is too early to say, I would not be surprised if credit card/debit card Point of Sale (PoS) declines in the next ten years in India.

With consumers increasingly moving to online transactions, whether e-commerce or peer-to-peer, traditional banks must rethink how to repurpose their investment in PoS to newer technologies to attract a customer base. To underscore how massive the UPI market is in India, PWC released a report that said nearly 75% of all retail digital transactions were made through UPI in the 2022/2023 cycle, while UPI’s market share in digital retail payments is expected to reach 90% by 2027.

- Merchants are racing to set up an online presence to stay relevant

Setting up an online presence for small merchants has been traditionally challenging in India. While meeting with friends and acquaintances in my hometown, who are all small merchants, I was surprised to learn that 80% of them have not set up online stores. However, all of them were interested in selling online if they received some help. One de-facto platform that essentially every merchant uses is WhatsApp. For someone in the US, it is hard to underscore how important WhatsApp is to receive and fulfill orders. Surprisingly though, WhatsApp P2P payments have not taken off based on the user interviews I conducted. Merchants, especially in urban areas like Delhi and Mumbai, are starting to open Shopify stores. There are currently 30,000 Shopify stores in India. Dukaan is a startup that aims to build Shopify for India, pushing traditional merchants to sell online. I also noticed the prevalence of hyperlocal marketplaces for things like handicrafts, food, apparel, etc., where businesses can sign up to connect with buyers, and the marketplaces generally handle the back office and payment processing.

- Ride-sharing and food delivery businesses are huge

Ride-sharing is everyone in India, as displayed by a staggering $13B Indian ride-hailing market. The ride-sharing market will only expand as access to the Internet becomes widespread and more money flows to make the current apps even better. For example, my uncle, who is 70 years old, casually mentioned that he would Uber to a train station. It was not something I would have expected him to say without a second thought. A primary mobility source in India, tuk-tuk, aka auto rickshaws, can also be hailed via Uber, Ola, and other aggregators. Even more eye-popping growth comes from the food delivery industry in India, boasting a $28B market in 2022. Food delivery giants Zomato and Swiggy are entrenched; for example, Zomato delivered a Biryani at 2 AM to a farm where I was staying with my friends.

- OLA’s EV scooters are everywhere

If you told me Indians would start incorporating e-scooters into their daily lives in 2008, I would not have believed it. In hindsight, it only makes sense to introduce electric scooters to a market that has 210 Million two-wheelers. Paraphrasing Jeff Bezos, there are some things constant in business. For example, customers would always want to ride their scooters at a cheaper rate without paying high prices for gas. I think Ola, and other e-scooter makers, perfectly captured this ethos. Scooters are primarily used for short-range traveling, generally considered a cheaper and more convenient option to move around than a car. EV makes perfect sense for this vehicle segment, as it virtually gets the cost to move around to zero. During my time in India, I noticed that 1 out of every ten scooters was EV-powered, specifically, Ola’s scooters. Ola’s founder, Bhavish Aggarwal, is no foreign to bringing audacious goals to fruition. As per this Business Standard article, the company raised $300M in May 2023, bringing its total valuation to $6B. Ola Electric has already captured 34% of the e-scooter market and has plans to ramp up production to sell 1M scooters by the end of this year. It is worth noting that while Ola’s sales ramped up, its competitors’ sales, which involve startups and established brands like Hero, have slumped. I also find it interesting that Ola copied a page from Tesla’s book and sold scooters directly to consumers.

- Illegal drugs consumption has been on the rise

While not a tech trend, drug usage has increased among Indian youth. I am not entirely sure how this shift occurred, but maybe the nation is trying to mimic the West — in good and bad ways. I was traveling between two cities in my car and got stopped by the cops five times during a 6-hour drive, driven by the heightened security to capture the person responsible for smuggling $3M worth of heroin. While the usage of drugs has been in the news lately due to the government’s recent push towards a “zero-tolerance policy” against drug trafficking and use, overall consumption of illegal substances has been on the rise for the last ten years, pushing past 1.5 million drugs addicts in the nation.

Parting observations

I remain bullish on the Indian market. India is the fifth largest economy in the world and has the third largest purchasing power. With the West’s souring relationship with China, India can see accelerated economic growth, given the country keeps fostering open trade relationships. It would be interesting to see how the nation improves its infrastructure, handles unemployment, and responds to regional geopolitical threats.