We are in the midst of tremendous change all over, driven by technology, a very young population and rising aspiration. The business climate is changing for the better. Crony capitalism, both at the business level and at the political level, is seeing a pushback, with inquiries and broad-based revulsion at the citizen level. In the field of natural resources, a new paradigm of open auctions is becoming the de facto standard. Overall, the feeling of despondency at an inactive polity and large-scale corruption is giving way to the hope that it will surely bring in better policies and an upsurge in entrepreneurship.
Our youth are, as usual, showing the way. All over India, more and more youngsters are banding together and starting their own businesses. Many with off-beat ideas, selling groceries, growing vegetables, branding fruit, growing rare varieties of rice, creating new agricultural implements to increase agricultural productivity, and the like. Many small cities are the new homes of such start ups. Entrepreneurship is cool and something youth want to try and take the risk, in increasing numbers. Bengaluru has emerged as the start-up capital of India. Sadly, the areas chosen are largely those linked to services or technology, rather than manufacturing. Govern-ment failure still deters entrepreneurs and we should be concerned.
This upsurge is driven by certain factors.
The mobile revolution has connected people like no other phenomenon. Over 90 crore connections are in use with more than 70 crore actual users. 2014 may see the magical 100 crore being crossed. Internet usage is around 15 crore users, and galloping. Most young people are connected and using the mobile as their window to the world. They are using it to purchase bus tickets, train tickets, for movies, clothes, etc., in ever larger numbers, some enticed by great discounts and convenience, at e-commerce sites funded by overseas funds looking to strike rich with the next great e-company from India. 2014 will see an inflexion point in this upsurge. These are the children of the Liberalisation generation, unconstrained by the shackles that bound earlier generations.
Our shopping habits are changing, at the margin almost revolutionary but on the base very evident! Many old bookstores have shut down, driven to closure by readers going to the online bookstores, thanks to the fat discounts available as well as the convenience. Of course, there is the flip side -- money invested by overseas funds are covering up the losses incurred due to the deep discounts that Indian e-commerce sites find necessary to offer in order to grow revenues, and the Competition Commission of India is turning a blind eye to predatory pricing practices that have destroyed brick-and-mortar bookstores. This trend is spreading across many other consumer sectors. 2014 will show up the deep impact of a change in habits across a much bigger section of consumers.
Start-ups are changing the way we interact with restaurants, boutiques, travel agencies. Many portals are intermediating between the consumers and suppliers based on consumer comments and preferences. Music, movies, entertainment are being driven by Web marketing. Social media is becoming a country in itself, creating new marketing channels. Instantaneous news, individual comments, greater flow of information are creating a new reality with individual power at the finger tips impacting political behaviour, too.
Every consumer has a voice, and their voices are changing supplier responses. No longer can businesses afford to ignore consumer experiences as their responses are widely read. Costs are being driven down, better deals offered, convenience beginning to dominate, and the marketing field levelled between businesses as the Web becomes more dominant. This trend will accelerate in 2014 and the Web will become the dominant new medium of commerce.
Organised Retail, too, has reached a critical size. With over 40 crore people living in urban areas and most towns and cities saturated by malls and shopping plazas, people are beginning to realise the benefits of organised retail. The massive increase in onion prices, in vegetable prices and other daily needs has turned the gaze to the benefits of organised retail. Malls have become the new hang-outs for our youth and part of their daily routine. 2014 may well see this becoming ubiquitous, driven by a new government and change in policies.
Our business heroes have been around for some time and most peaked out last decade. Many carry on, building on their past achievements. 2013 saw some successes but the stake was smaller. 2014 will see the emergence of new heroes. With a more vibrant market, larger scale, more confidence, the coming year may see the rise of a new generation of business leaders who had taken the plunge a few years ago, pioneering change through e-commerce. Their success will spur a larger move towards entrepreneurship. Over the last decade, many start-ups struggled in an immature system. But their pioneering moves will bear results soon. They have, across many areas, reached a reasonable scale, which will make them more visible and their debut in the market will throw the spotlight on them.
The economic scenario will change in 2014. Not only will we see a new crop of business leaders emerge, change in consumer habits driven by technology across sectors, retail getting bigger, but the economy may see the start of a secular growth phase, driven by more optimism.
We will have a new government, a new government forewarned by a young electorate, who are against cronyism, corruption and the old style of governance, who have made their preferences clear through the Aam Aadmi Party’s victory. They dislike the politics of poverty and want the politics of jobs. Jobs are the No. 1 priority for the 50 crore voters under the age of 40 who will be the dominant voting force in 2014. Partition, Pakistan, religion, caste, doles, etc., no longer resonate with our young voters. They want jobs, growth, the good things of life, a chance to make a decent living. This change in the voters, change in preferences, will be transformational, and 2014 will see the start of a new era in India. Hopefully, a new generation of leaders will arise in politics and government, too.
2014 will be the year that will change India, for the better!
(T.V. Mohandas Pai is chairman of Aarin Capital Partners)
