StartupTalky

Tag: 🔍Insights

  • EV Investments Up, But Hopes Pinned on Govt Policy Push

    Everyone is salivating at the electric vehicle market pie in India! If the recent spate of investments is anything to go by, the EV segment is touted to be among the leading hero sectors driving India’s growth. However, stakeholders seek clarity and concrete policy initiatives from the government to make further inroads into the segment.

    “Several factors contribute to the increasing investments in India’s electric vehicle (EV) segment. India boasts the world’s largest untapped market, particularly in the two-wheeler sector, presenting an enticing investment opportunity. Growing demand, driven by a young and affluent population eager to embrace new technologies, further fuels investment interest,” said Arindam Lahiri, chief executive officer of the Automotive Skills Development Council.

    The 2022–23 Economic Survey tabled in Parliament in December last year had pegged EV sales at 1 crore and 5 crore jobs in the sector by 2030. Leading think-tank, the Centre for Energy Finance, expects India’s EV market to be $206 billion by 2030.

    There is no denying that demand for EVs has been on the rise. According to the Ministry of Road Transport and Highways, electric vehicle purchases spiked by 51% year over year to 740,000 in April–September. This number is expected to cross a record of 1.5 million during the entire fiscal year.

    StartupTalky takes a closer look at this demand, the reasons behind the rise in investments, and the roadblocks that need to be addressed.

    India Electric Vehicle Market Size, 2022 to 2032

    Investments Galore
    Harsh Ground Reality

    Investments Galore

    If the recent spate of investments is anything to go by, the EV market has piqued the interest of investors, both in India and abroad.

    Earlier this week, Paytm Chief Executive Officer and Co-Founder Vijay Shekhar Sharma launched a ₹30 crore fund to solely invest in EV and artificial intelligence startups.

    Earlier this week, electric vehicle and appliance manufacturer–Wardwizard Innovations & Mobility said it would invest ₹2,000 crore for the development of an electric vehicle ancillary cluster in Gujarat. Other states are not too far behind. Karnataka is said to have received investments worth ₹25,000 crore so far in the EV and ancillary space, newspaper reports quoted a state minister as saying.

    Earlier this year, British energy giant BP invested in EV delivery company Magenta and BluSmart Mobility, an EV-only ride-hailing company. Last year, global energy giant Shell backed the fund-raising exercise of Gurugram-based EV charging network company Statiq.

    One of the reasons for this frenetic activity in the EV segment is because of the huge potential that India holds. S&P Global Ratings has pegged India’s EV penetration at 1.1%, a far cry from the 17.3% average in Asian countries.

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    Harsh Ground Reality

    Despite the investments in the EV and clean technology sectors, there is still a long way to go for demand to remain persistent, say venture capitalists and companies that StartupTalky spoke with. According to them, some key areas that need to be addressed in the EV segment include:

    Charging Infrastructure

    According to a report released by the Confederation of Indian Industries in June this year, India may need 1.32 million charging stations by 2030 to meet the government’s ambitious sustainability targets. As of January 2023, there were 5,254 charging stations in the country, as per data disclosed in the Lok Sabha by Union Minister RK Singh.

    “India’s growing EV market penetration and battery development ambitions also introduce new barriers, including supply-chain worries related to the price and availability of semiconductors, metals and minerals, and battery cells, as well as concerns about insufficient charging infrastructure and electricity grid readiness,” a report by the International Institute of Sustainable Development said in August 2022.

    Some state governments, such as Uttar Pradesh, have already started work on installing charging stations along five main express highways in the state.

    Empowering Local Manufacturing & Research

    Apart from improving infrastructure, incentives also need to be provided to component manufacturers and for R&D (research and development), analysts and corporations.

    “In the last five to six years, funds have been going into battery manufacturing and battery technology companies, but that money is not there for the kind of R&D we need. It is slowly coming in. But the frugality with which Indians work is what we must leverage,” said Rohan Shravan, founding CEO of Tresa Motors, pointing to the higher cost of manufacturing.

    Imported lithium batteries in EVs constitute around 50–60% of the cost of EVs, making them much costlier.

    “The indigenous availability of the vehicles’ batteries and spare parts will also impact the consumer mindset and also the manufacturer’s mindset, as it will make it even cheaper for us to manufacture and sell,” said Kanchi Patel, director and co-founder of two-wheeler electric bike manufacturer Abzo Motors.

    Co-founder of angel investing firm The Startup Capital–Aditya S. Kapur, however, feels looking out for newer innovative technology and incubating these ideas at home is far more important than just manufacturing.

    “Our main concern is not to run our car on electricity. Our real problem statement is that we want a non-polluting automobile. We cannot call a car running on electricity completely clean. The whole process of innovation is completely linked to exploring. We need to give time to the stakeholders and allow them to explore things,” Kapur said.

    Policy Push

    Companies and investors are now looking to the government for easier policy regulations.

    In 2015 and subsequently, in 2019, the government launched the Fast Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India. Under this initiative, buyers of EVs were incentivized by an upfront reduction in costs. However, owing to reports of malpractice, the government tweaked this initiative and reduced these incentives.

    At present, the Department for Promotion of Industry and Internal Trade (DPIIT) is said to be working on a scheme to extend subsidiaries to electric four-wheeler makers based on the investments they make to manufacture locally, The Economic Times reported earlier this week.

    Many stakeholders are also wary of putting their fingers into the EV pie as they are waiting for more concrete steps from the government.

    “Till infrastructure is in place, heavy vehicles or large commercial vehicles are only bidding time, said Manas Pal, co-founder of Pedal Start, a Gurugram-based accelerator. He added, “The supporting component of this sector will play a very important role. Something on the charging stations, something on the battery development side, something on the battery manufacturing side, something on the battery recycling side, something on providing doles to people buying these commercial vehicles, something on the loan side will impact a lot,” Pal said.

    Conclusion

    The road to a pollution-free commute may seem like a long one, but at least the right noises have been initiated by stakeholders, including the government and investors. It, however, remains to be seen if India manages to hit a sweet spot in the EV sector. For now, this can be possible only with a concrete roadmap from the government, persistent corporate investments, and an ingenious sustainability model from think tanks.

  • Innovative Marketing Strategies of Forever 21

    In the era of Western Fashion, Forever 21 is no stranger! The very prominent apparel brand was founded by Do Won Chang and his wife, Jin Sook Chang. Forever 21 is an American-based brand, headquartered in Los Angeles, California, United States.

    In the beginning, the brand was called Fashion 21, which was later grown into a huge clothing line of shops under the brand names Love 21, Heritage, XXI Forever, and Forever 21. The American fashion brand was founded in 1984, and ever since its establishment, the company has seen immense success. In fact, today, Forever 21 owns over 550 stores across the globe.

    Forever 21 was established to offer a broad range of women’s clothing, but now, the brand has widened its categories and included various sections like Men, girls, kids, lifestyle accessories, and others.

    A huge fraction of the apparel manufactured by Forever 21 is from China and then exported to other countries like the United Kingdom, the Middle East, and the United States. The company functions with annual revenue of $4 billion. In this article, we will discuss the marketing strategies of Forever 21. Let’s get started!

    Product Marketing Strategy of Forever 21
    Target Marketing Strategy of Forever 21
    Pricing Strategy of Forever 21
    Distribution Strategy of Forever 21
    Promotion and Advertising Strategy of Forever 21

    Product Marketing Strategy of Forever 21

    Range of Products offered by Forever 21
    Range of Products offered by Forever 21

    Forever 21 has been around for a long time now, it offers a wide range of clothing in all categories for men, women, and kids. The brand has a very strong position in the global market with a diverse range of product portfolios.

    From kids to adults, you can find clothing for all ages. Its main target for clothing products is adults, kids, and toddlers. Forever 21 provides jeans, tops, jumpers, lingerie, and many other clothing products.

    Besides its clothing section, Forever 21 also provides accessories sections, including belts, ties, hats, gloves, sunglasses, and many more. Moreover, its jewelry section includes products like watches, body jewelry, pins, brooches, and others.

    Apart from this, Forever 21 also offers footwear products like loafers, wedges, sandals, boots, and heels. Forever 21 keeps its product range distinct and with great customer engagement.

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    Target Marketing Strategy of Forever 21

    Forever 21 puts its major focus on attracting women of all ages. Its products are specially designed in such a way that they satisfy the fashion sense and style of women, from teenagers to adults.

    Forever 21 is ranked at 121st position in the list of top 1000 Internet retailers in 2023 (according to Digital Commerce 360), This is a significant drop from its previous rank of 2nd in 2019. Around 45% of the brand’s entire online customers are millennial women.

    With these high-rated customers, Forever 21 makes a fancy annual revenue of around $4 billion, which certainly is a huge figure. And that’s why it mainly focuses on females from all categories. Although the brand does offer men’s collections, its major market revenue source is women.

    Rise and Fall of Forever 21

    Pricing Strategy of Forever 21

    Forever 21 is widely famous for its strategic pricing techniques. The brand offers great pricing deals according to the demands of the fashion product. Forever 21 is receiving great responses from the customers as well. Brand’s valuation in the global market is increasing by great percentages. The brand is one of the top fancied brands with its incredible marketing policies and strategic planning.

    Forever 21 is able to keep its prices low by controlling its costs. The company has a vertically integrated business model, which means that it controls all aspects of the production process, from design to manufacturing to retail. This allows Forever 21 to eliminate middlemen and reduce costs. Forever 21 often offers bundle pricing on its products. This means that customers can buy two or more products for a discounted price. This strategy helps the company to increase sales and reduce inventory levels.

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    Distribution Strategy of Forever 21

    Forever 21 began its journey from Los Angeles, California, and today, the brand has spread across Europe, Asia, Africa, the Middle East, and America. The brand owns over 550 retail stores in 27 countries.

    In fact, Forever 21 has reached countries like India, Australia, Costa Rica, Japan, Brazil, the United Kingdom, and Germany. Forever 21 functions with very strategic distribution and marketing planning.

    With such an immense network, the brand is looking forward to establishing its outlets in Malaysia, Greece, Israel, and Russia.

    Forever 21 retail stores are well-designed and large, suiting its fashion styling. The brand has a huge networking channel for distributing its products and services across the globe. Its distribution network includes Suppliers, Vendors, and franchise owners.

    Promotion and Advertising Strategy of Forever 21

    Forever 21 carries a very strong social media presence in order to promote its services and products. It works on improving customer service and relations with all prospects.

    Forever 21 promotion strategies are entirely based on increasing the brand’s reach and capitalizing on its market share. Social media platforms like Facebook, Twitter, Instagram, and Pinterest have worked promptly towards enhancing brand awareness among the global audience.

    They also believe that marketing their children’s products vigorously is important. Bright colors and lively displays are used throughout Forever 21 stores to make them enjoyable and enticing to children. Kids are often exposed to the kids’ section of each store as soon as they enter because it is typically found at the front of the store.

    Forever 21 functions very strategically when it comes to advertising and promotions of the brand. Forever 21 popularity can be easily estimated from the number of followers the brand has on its official website. Its prominent advertising and promotions are done through social media channels.

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    Conclusion

    The marketing strategies of Forever 21 are pretty straightforward and reliable. The brand offers custom, fast-paced, and low-priced clothes to gather its audience and build strong customer support.

    Although the brand still requires a few improvements and alterations to the quality of its products, the quality isn’t resisting. Forever 21 offers a huge range of fashion clothes and accessories to its customers with great offers and discounts. And that’s what attracts more customers to the brand.

    Forever 21 always keeps up with the trends and prefers experiments on its products. Forever 21 is set for more uprise success flow in the upcoming year.

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    FAQ

    Does Forever 21 offer clothing for kids?

    Yes, Forever 21 offers clothing for kids. The company has a dedicated kids section on its website and stores.

    What is the target market of Forever 21?

    The target market of Forever 21 is young consumers and kids.

    What is Forever 21 marketing strategy?

    Forever 21 carries a very strong social media presence to promote its services and products.

    Who is the founder of Forever 21?

    Do Won Chang and Jin Sook Chang founded Forever 21 in 1984.

  • Shine Bright: Small Businesses Strategies to Outshine Big-Bang Festive Offers

    The festive season is indeed colorful, but it can get noisy at times! This holds true for the digital e-commerce and retail segments as well. Retail giants and online marketplaces go all out to grab eyeballs and purse strings during the festival season, while the smaller companies and startups are left struggling to remain visible. StartupTalky spoke to a few digital marketers and small and medium companies to try and find out some simple ways small businesses can make the most even amid a deluge of festive offers.

    Be it the Great Indian Shopping Festival by Amazon India or the Big Billion Days by Flipkart, you cannot ignore the demand that these giants churn out single-handedly.

    On Sunday Flipkart’s Chief Executive Officer, Kalyan Krishnamurthy said in a statement that the Big Billion Days sale got 1.4 billion visits during its festive offering between Oct 7-Oct 15, two times “crorepati seller growth” over the previous year. Meanwhile, Amazon’s Great Indian Shopping Festival is expected to clock blistering sales.

    A survey conducted of 1,000 mobile users by imobi and Glance showed that 84% of Indian consumers reported an increase in their online shopping budgets from a year ago during the current festive season. Around 66% of the surveyors intend to shop for items over ₹25,000.

    “What happens during the festive season is that big brands have bigger budgets and larger-than-life campaigns that they allocate, and smaller companies get lost in that chatter,” said Vivek Kumar Anand, Chief Business Officer at DVIO Digital, which handles marketing for aggregators like Flipkart and Meesho.
    In 2022, the advertising sales of e-commerce giants were tipped at a mind-boggling $1 billion, according to Sankalp Mehrotra, VP of Monetisation at FlipkartPitch during an event in February this year.

    The best way to deal with the sale season is to just accept their might and pick niche products to market, digital marketers said.

    “We try to avoid competition. For example, if someone is selling a product on Amazon, we try to avoid those sales and focus on some other products, through which we can avoid the competition because we understand that there are budget constraints and we cannot be with these giants,” said Abhyudaya Tripathi, vice president, business operations at digital marketing firm Tangence.
    Spending on advertising during the festive season is also of little use, as returns may not be equivalent, Tripathi added.

    Babycare retailer Citta’s Co-Founder and CEO, Akansha Sharma, expresses the anguish of putting up search engine marketing ads during the festive season. “You definitely have to increase (the budget on ads) during the festive season because everyone is doing that. So, you know, bidding is very competitive for ads. So if the other person is going to bid more, your bid automatically has to increase. It increases easily by 15-20%.”

    Therefore, several smaller companies are left with no choice but to sell on aggregator sites, even though it may eat into their margins.

    Many smaller companies struggle for visibility despite increased marketing budgets and high demand.

    “There are a lot of Indian and international brands with deeper pockets and a much larger infrastructure base that come up with offers, discounts, and product ranges which are almost impossible and unviable for the smaller players from the MSME sector to compete with. Thus, we see an overall increase in sales from a market perspective, but MSMEs end up taking a hit,” said Navin Rao, co-founder of The Kaftan Company.

    Maintain Exclusivity

    The huge discounts offered on e-commerce sites tend to divert even loyal customers away from a company’s home website. One way to stay relevant during the festival season is to have exclusive products on your company website.

    “There is the entire collection on Myntra and Amazon (by our company), but there might be a small capsule of, say, footwear, which is available only on our website, that would just create a differentiated element for the customer to come to our website and shop from this website,” said Shalvi Govil, Head of Digital Business at clothes retailer–The Indian Garage Co.

    Companies can also get creative and offer services that are available only on their website. Clothes retailer TryndBuy has a virtual try-on room where a customer can try on clothes virtually. The company has granted 30 patents internationally for this feature and has already won several awards for it.

    Citta tries to invest in fostering client relationships during the holiday season rather than getting down to intensive marketing. “We’re planning to have a few more festive-oriented talks on Instagram, like storytelling for kids or something that will get them that is centered around the festivals. It’s still a more genuine way to connect with people than just marketing,” Sharma from Citta said.

    A recent survey by consumer data intelligence company Axis My India, 33% of the 5,452 people surveyed are more likely to interact with brands on social media when presented with compelling offers. While 39% of respondents cherish the classic touch, choosing not to interact with brands on social media for festive deals.

    Sometimes small tweaks on the digital interface can cascade into bigger returns, even amidst the frenetic buying spree.

    “Even if you change the meta tag and the meta description of the SEO (Search Engine Optimization) words, then you will be up in the game in terms of higher CTR (click-through ratio) for the festive season. Let’s say instead of having a plain vanilla kind of description for your SEO ranking, you are having 70% off during the festive season for the selected product; automatically, you will have a higher CTR,” said Anand.

    Anand also suggested handing out coupons and discounts well ahead of time and keeping note of the buying behavior of customers. For example, luring buyers during the Shrad period is typically considered a lull period for purchases.
    Some entrepreneurs try to look at the positives and focus on networking and building ties.

    “These few months are a great time to get to know all the people involved, like a retailer or any other business partners. It’s a very good time to start building relations with people involved, such as retailers or other business partners. We ensure that we’re gifting something to our business partners and maybe meeting them,” Sharma from Citta said.

    Direct-to-consumer skincare retailer Foxtale says it empowers customers through transparency.

    “Whether it is through our ingredient list or our lab trials where the customer is privy to reviews of our products before they can make an informed decision, we try and empower our customers to make the right choice for themselves when picking out a product,” said Aditi Sahu, VP Product, and Development at Foxtale.

    Conclusion

    The big retailers and giants may take the thunder away as far as festive discounts are concerned, but smaller companies can also make hay while the festive sun shines. Brainstorming with creative strategies and looking at consolidating your existing clientele can go a long way in maintaining brand loyalty, irrespective of the festive boom.

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  • Marketing Strategy That Shot Inshorts to Fame

    Condensing news articles into sixty-worded shorts of crisp information, Inshorts has become popular among people in the digital world in a very short span of time. This company was founded in 2013 by Azhar Iqubal, Deepit Purkayastha, and Anunay Arunav.

    Inshorts summarise news and blogs that can be swiped up one after the other, like stories. This article will discuss the marketing strategy that made Inshorts shoot up in popularity.

    Their strategies become all the more noteworthy because of their success despite the evident oversupply of news channels and blogs in the digital era. It takes careful planning and execution to stand out in such a hyper-competitive market world.

    Finding the Right Niche
    Using the Right Criteria
    Being User Friendly
    Allowing Customisation
    Analyzing the Data Right
    Consumer Based Service
    Using the Right Tools
    Knowing When to Stop

    Finding the Right Niche

    The founders of Inshorts did thorough research on the contemporary market condition before they organized the ways in which their app should function. During that time, people were heavily dependent on blogs and Facebook posts to keep themselves updated with news in the fast-paced world where they could not follow TV channels. However, these sources bombarded them with many links, images, information, and unnecessary notifications.

    The need for a crisp news provider that gives the right information in a short span of time was very important. The master brains behind Inshorts were able to identify this gap and came up with the idea of 60-word stories that users can easily read based on their preferences.

    Annual Revenue of Inshorts
    Annual Revenue of Inshorts

    The company was able to raise revenue from $13 million in 2021 to $18.9 million in 2022. The revenue growth rate of 44.9% demonstrates how successfully the app effectively serves its target users.

    Inshorts: Exceptional Circulation and Its Rapid News Model
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    Using the Right Criteria

    What determines the success and loss of any venture, for that matter, are the criteria that we look at. As far as Inshorts is concerned, they were not bothered about their content going viral or the amount of time spent on it. They focused on the number of screens that each user goes through. As of now, an average user will go through over 80 screens every day and spend 6 hours and 58 minutes per day on screens connected to the internet. Engaging the user became the priority over making the content viral.

    Being User Friendly

    User Experience of Inshorts
    User Experience of Inshorts

    Inshorts made sure that their user experience was extremely comfortable within their app. Each story is short and without any additional links. There are no prompts to go further into the story or to the next story. It is completely up to the user.

    They have also not focused much on the sharing aspect of it, which has helped the user immerse into their own little world while going through this news. Their primary intention was to get more people to come back to the app rather than getting the news shared.

    Allowing Customisation

    In this small world, everything is news. In that context, it is important to give the user exactly what they want. Most of the users come to Inshorts to not be bombarded with unnecessary news and information like other similar apps and websites. To not give a similar experience, they have developed filters to ensure the kind of news or blogs that they would like to see on their feeds. In this way, the user does not feel overwhelmed with the flooding of information.

    How to Use the app Inshorts

    Analyzing the Data Right

    Today, accessing information is no longer a difficult task. What makes all the difference is the way in which the available data is used for the company’s development. Inshorts is a company that gives a lot of importance to such inferred data. They decide on their strength and weaknesses based on their inferences. For example, being a news discovery app, they had to choose whether to prioritize their editorial team or should they focus on the products they launched. They were successfully able to narrow down their primary focus to strengthening their editorial team based on the data that they received from the time that each user spends on a screen.

    Valuation of Inshorts
    Valuation of Inshorts

    Consumer Based Service

    Information is consumed by all people irrespective of where they come from and what their qualifications are. However, how they consume this information will vary. The same product that is used in tier 1 cities cannot be pushed into tier 2 and tier 3 cities. The way they engage with the internet, the kind of news they like, and how they use the app will all differ. Inshorts earns revenue primarily through advertising on its mobile app.

    Inshorts has ensured that they deliver differently in different areas, respecting their consumer’s requirements. They have recently launched a different app that focuses on video content more than written ones. Through a separate app, people can watch more videos, while those who prefer the regular summaries are not disturbed.

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    Using the Right Tools

    Depending on what your USP is, it is of prime importance to use the right tools to enhance better engagement with the content. Inshorts did not go wrong there as well. They, after various tests and surveys, realized the importance of the right image in every news.

    The content, being only 60 words, demands so much from the accompanying picture. The founders of Inshorts have confirmed the difference that a good picture will make in the way in which each user engages with the stories.

    Knowing When to Stop

    It is only a thin line between when information can be informed and menace. One of the biggest problems that people using mobile phones face is the deluge of notifications. It can be very distracting. However, Inshorts has saved itself from this bad reputation by ensuring that the users will only get a fixed number of notifications every day.

    By using the data of engagement and their preferences, they choose which possible stories are most relevant to the user and will only notify the details of those stories. In that way, the app maintains a safe distance and also stays connected with the user at the same time.

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    Conclusion

    It takes constant planning and persistence to be a successful app in such a competitive market. They have proved that you don’t have to do different things to be successful, but what matters is doing things differently.

    Today, Inshorts has become a name in itself for short news rather than being known as an app. They have identified the gaps and bridged them like no other. Their success lies in focusing on and optimizing the right variables instead of going on the regular ideas of popularity and virulence. The company’s marketing strategy has been extremely effective. The app has developed dramatically in recent years, and it is currently one of India’s most popular news apps. Inshorts’ emphasis on information, customization, accessibility, and affordability has made it a vital resource for people searching for a convenient method to remain up to date on the latest news.

    FAQs

    What are the marketing strategies employed by Inshorts?

    Inshorts ensures it doesn’t deliver the same information that it delivers to tier 1 cities to tier 2 and tier 3 cities. The founders of the app focused on keeping the users informed and engaged rather than delivering viral content.

    What is the current revenue and valuation of Inshorts?

    The revenue of Inshorts stands at $18.9 Million, and its valuation is $550 Million (as of July 2021).

    Why is Inshorts successful?

    Inshorts provides news in less than 60 seconds without bombarding users with unnecessary news and viral content, which is why its users prefer coming back to the app.

  • Inshorts: Exceptional Circulation and Its Rapid News Model

    Data and information are two key concepts in the modern world. Data is raw, unprocessed facts or figures that can be collected from various sources. Information, on the other hand, is data that has been processed and organized into a meaningful form. Both data and information play an important role in decision-making processes across industries as they help organizations make more informed decisions to drive their business forward.

    In today’s society, original news is more important than ever. With the rise of social media and other digital platforms, it can be hard to tell what information is true or not. Fake news has become a major problem in recent years, resulting in confusion and distrust among readers. This makes it even more vital that people are able to access reliable sources of original news and analysis.

    Original news stories provide an unbiased look at current events with accurate facts and reporting. It allows for a greater understanding of the issues being discussed by providing background information on topics and giving both sides of an argument equal coverage. In addition, these stories often feature interviews with experts who can help explain complex concepts in easy-to-understand language. Without original news people and society at large can go directionless.

    This generation can also be more easily distracted by technology, with the average attention span now being 8 seconds. To counter this, it is important to create content that is concise and engaging. This could include using shorter sentences, breaking up long paragraphs into smaller blocks of text, or creating visuals such as infographics or videos to help break up information and keep people engaged.

    Additionally, providing interactive elements such as quizzes or polls can also help maintain attention spans. News in this format can be a game-changing business, and there exists one business that does exactly the same. Inshorts is an Indian news app that does the same. They have been growing with good numbers. Let us see how they are able to do this. This article talks about Inshorts, their rage, and the reason behind the growth.

    About Inshorts
    The Famous Inshorts App
    Technical Facts About Inshorts
    User Psychology
    Reasons Behind Inshorts Success

    About Inshorts

    Inshorts is an Indian news and content discovery platform founded by Azhar Iqubal, Anunay Arunav, and Deepit Purkayastha. Iqubal is all set to be the new judge in Shark Tank India, season 3.

    Inshorts was launched in 2013 with the aim of providing short, crisp, and relevant news to its users. The company, which is based in Noida, serves over 30 million monthly active users and has been backed by investors such as Tiger Global and Sequoia Capital. Inshorts was started in 2013 and was just a Facebook page to provide news in a snakebite format. By the end of their first month, the page had a little over 20K followers. Now their app distills news stories into 60-word summaries.

    It offers a personalized news feed where users can choose topics and sources of news they are interested in. It also offers an AI-powered news feed that provides news stories according to the user’s reading patterns. Inshorts offers news from a range of topics including politics, business, sports, entertainment, and technology. It also provides an in-app video channel, ‘Inshorts TV’, which has news stories from multiple sources.

    Traffic and Engagement in the Last Three Months of 2023
    Traffic and Engagement in the Last Three Months of 2023

    Inshorts is the all-new ultimate news reading experience, delivering users with a quote to spark thought and expand their knowledge. With information on current affairs, politics, business news, and more at their fingertips, Inshorts actively engages with its readers as it summarises long-form stories for convenience. Going beyond mere scanning of articles through catchy video clips and exciting quizzes, this one-of-a-kind platform offers an extraordinary insight into an ever-evolving world – in just 60 words!

    The Famous Inshorts App

    Inshorts has since grown to become India’s largest news platform with over 25 million users. It has been awarded a number of accolades, including being named the best news app by Google Play in 2018. Inshorts has become popular for its unique format which allows users to catch up on the latest news in a matter of minutes. By condensing news stories into 60 words, the app ensures that users can stay informed without having to spend hours reading long articles.

    The app provides users with a range of personalization options, such as selecting their preferred sources and topics, which helps them filter out news stories that do not interest them. In addition to its personalization options, Inshorts also provides a range of features to make it easier to stay informed. These features include a daily digest, which sends users a summary of the top stories of the day, as well as a ‘trending’ section that highlights the most popular stories from the past 24 hours. The app also offers a range of news categories, such as politics, sports, and entertainment, which makes it easier for users to find stories that interest them. Inshorts has become a popular news platform for many users due to its unique format, personalization options, and range of features.

    By providing users with a quick and easy way to stay informed, the app has become a go-to source for news in India. It currently has more than 20 million app downloads. The app wears a crown with a monthly active user base of more than 60 million. Out of them, more than 60% user base is in the age group of 18 to 35.

    Inshorts - Audience Demographics and Age Distribution
    Inshorts – Audience Demographics and Age Distribution

    The Inshorts app is as fun and interactive as it is exciting! Focusing on bite-sized mobile news coverage of current events, Inshorts makes staying informed quick and easily digestible. By serving content in the form of summaries, videos, and infographics, users can quickly swerve from story to story with a few taps of their fingers.

    It can also be used to promote products or services. Examples of news and short-form content include blog posts, tweets, news stories, infographics, and podcast episodes. The advantage of news and short-form content is that it can be more quickly read, watched, or listened to than long-form content. It can also be used to quickly and efficiently convey information or messages to a large audience. Additionally, it can be used to create interest and engagement around a topic or brand. Finally, it can be used to drive traffic to websites and other platforms.

    Technical Facts About Inshorts

    Developing for Inshorts includes working with both Android & iOS integrated languages such as Java & Swift, along with their own back-end APIs for a communication interface between its many components. Plus, implementing real-time analytics provides invaluable metrics to measure user engagement, thus allowing the company to remain prepared and conscious of what’s popular amongst readers of the news.

    The app also has a ‘Share’ feature where users can share stories with their friends and family. In addition to its news offerings, Inshorts also offers features such as ‘Inshorts Picks’ which curates stories from various sources, ‘Top Stories’ which shows trending stories in India, and ‘Today’s Headlines’ which offers a list of the top stories of the day. All these muscles work behind the scenes and make an impact on the lives of many people who stay up-to-date with the latest news through its platform!

    Inshorts App
    Inshorts App 

    The app also has an ‘Explore’ section which allows users to search for and follow topics of their interest. It also has a ‘Bookmark’ feature which allows users to save articles for later reading. Inshorts recently launched a ‘Breaking News’ section which provides breaking news alerts. Inshorts has over 10 million downloads on the Google Play Store and is available in 10 languages. It also has a website where users can access news stories.

    Inshorts was recently in the news for its successful fundraising round. It raised $35 million from Tiger Global Management and other investors, taking its total funding to $100 million. The app has been praised for its simple and intuitive user interface. It has also been lauded for its efforts to make news more accessible to users. Overall, Inshorts is an innovative platform that is changing the way we consume news. It is making news more accessible and is helping users stay informed about the latest developments in India and around the world.

    Inshorts Startup Story – Business Model, Revenue Model, Competitors and more
    Inshorts is an mobile news application that offers news stories summarised in 60 words or less. Lets look at its business model, revenue model and more.
    StartupTalkyAnamika Mahapatra

    User Psychology

    User psychology is an important factor in digital products, understanding how their users think and interact with a product. Proper user research helps to create an experience tailored to their needs and ensures customers remain loyal. It broadens the overall user experience by identifying factors, such as perceived functionality, usability, system performance, and aesthetics, which are essential for delivering value. By accounting for these elements designers can create solutions that are not only aesthetically appealing but offer meaningful experiences through meaningful interactions that make sense to use. User psychology should also inform product road maps as it can help in planning out feature development cycles, enabling a better overall user experience.

    A peek into the minds at Inshorts

    Reasons Behind Inshorts Success

    The app has grown tremendously over the past few years and now enjoys a considerable user base across India. In this article, we will discuss some of the key reasons for its success.

    Unique Concept

    One of the primary reasons for Inshorts’ success is its unique concept of providing short news summaries to readers. The idea was revolutionary at a time when most people were used to consuming long articles on their mobile devices or computers. This innovation allowed users to consume news quickly and easily, making it more accessible to a wider audience.

    Effective Distribution Strategy

    Another important factor in Inshorts’ success is its effective distribution strategy. The app is available on both Android and iOS platforms as well as on the web, allowing users to access news summaries anytime, anywhere. In addition, the company has also partnered with several mobile operators to make its content available through their networks.

    Quality Content

    Inshorts also offers high-quality content that is updated regularly by a team of dedicated editors who curate news stories from leading newspapers and magazines. This ensures that readers get only accurate information which helps them stay informed about current affairs without having to read long articles or watch lengthy videos.

    Engaging User Experience

    Inshorts also offers an engaging user experience. The app has a simple and intuitive interface that makes it easy to navigate and find the news summaries one is interested in. Additionally, users can customize their feeds by selecting topics they are interested in or following specific authors whose work they enjoy reading. This helps make the experience more personalized for each individual user.

    Effective Revenue Model

    Last but not least, Inshorts has implemented an effective revenue model that allows it to generate revenue while providing its services free of cost to users. It does this by displaying ads on its platform as well as through partnerships with other brands and companies who use its content for marketing purposes. These are some of the key reasons for Inshorts’ success. The company has managed to capture a large user base by providing a unique and innovative news summarization service that is easily accessible, offers high-quality content, provides an engaging user experience, and has an effective monetization model in place.

    The Unique Yet Effective Marking Strategies of Inshorts
    Inshorts is a mobile news app that summarizes and presents news in less than 60 words. Here’s a look at its marketing strategies.
    StartupTalkyAnagha S

    Conclusion

    Inshorts is a popular news app that provides users with short summaries or ‘Inshorts’ of daily news stories. The app has become incredibly popular due to its user-friendly interface, easy navigation, and comprehensive coverage of the latest news from all over the world. Additionally, Inshorts also offers personalized recommendations based on user’s interests and preferences, helping them stay up to date with the latest developments in their areas of interest.

    The future of Inshorts looks bright, as the company continues to focus on delivering concise, easily digestible news content to its users. In the coming years, Inshorts is likely to expand its reach and technology to become a leader in the news aggregation and delivery space.

    FAQ

    What kind of app is Inshorts?

    Inshorts is an aggregator app that summarizes news articles in 60 words and covers a wide range of topics, including tech and business.

    Why is Inshorts successful?

    Inshorts generates revenues as a content aggregator by driving users to publishers’ websites and also through advertising commissions.

    Who is the CEO of Inshorts?

    Azhar Iqubal is the co-founder and CEO of Inshorts. He was named ‘Entrepreneur of the Year’ in the media category at the Entrepreneur Awards 2022 organized by Entrepreneur India magazine. Azhar is also all set to be the new judge in the Shark Tank India, season 3.

    Is Inshorts a social media?

    Inshorts is a news aggregation app that lets users summarise news in 60 words. The latest addition to its portfolio – the Public app – is a local social app that provides users with videos about the places they live in.

  • The Dunzo Saga: From Humble Beginnings to Disrupting Delivery, with Twists Along the Way

    ‘Dunzo karle!’ has now become a common phrase when it comes to delivering groceries and packages. How many companies can claim to have become synonymous with the products or services they offer? Bangalore-based fast delivery app Dunzo’s journey has been a rollercoaster ride like no other. Even now, Dunzo finds itself in the news for all the wrong reasons—layoffs and board members exiting. All eyes are now glued to this startup starlet’s next move; some are even secretly hoping that it could rise from the ashes like a phoenix!

    In this article, we revisit Dunzo’s incredible story and explore what lies ahead for this unicorn startup.

    How It Began
    How’s It Going
    Layoffs and Exits

    How It Began

    Dunzo’s incredible story has a lot to do with its co-founder and CEO, Kabeer Biswas. Biswas was idling and doing nothing much after a stint at Airtel and a few startup ventures later. In 2015, he casually asked three of his friends on WhatsApp what they needed for the day while he ran from store to store to fulfill them. In three months, his customers had grown to 100 through positive word of mouth!

    Soon after, Biswas and his team scaled up operations in several cities and registered blistering growth.

    It even caught the eye of the big daddies of business across the globe. Reliance Retail picked up a 25.8% stake in the company, making it Dunzo’s single largest stakeholder. Meanwhile, Google chose Dunzo as its first direct investment in India. At present, Google is the second-largest stakeholder, at under 20%.

    In its first year of operations, Dunzo dodged the typical startup obstacles, just like one of its delivery boys zigzagging on his bike, by clocking revenues of ₹0.8 crore. Since then, revenues have spiked to ₹67.7 crore in 2022.

    Dunzo's Revenue Growth from 2018 to 2022
    Dunzo’s Revenue Growth from 2018 to 2022

    Dunzo follows a hyperlocal model of business wherein the demands of the customer are sourced through local shops and on its app.

    Quick commerce companies promise door-to-door delivery of essential grocery items at the doorstep of the consumer “quickly”. In Dunzo’s case, this was 19 minutes, to be precise. The COVID-19 pandemic further helped bolster Dunzo’s image. The pandemic elevated the Quick Commerce segment players as saviors. Millions of people stuck indoors were at the mercy of food delivery companies such as Dunzo for essential services.

    In a market that was already dominated by delivery giants like Swiggy and Zomato, putting a foot in this sector would mean deep discounts and free deliveries to attract customers. Dunzo had officially bitten the quick commerce bullet. Dunzo’s losses were too huge to be ignored, at ₹464 crore in 2022, around two times what they were a year ago.

    “Our best cities generate 14–15% of gross margins. We take that cash, literally a couple of crores a month, and plough it back into our new cities, where we still need to lose money for delivery because we don’t have enough order volume for the delivery cost to drop. But as the (volume) grows, the cost of delivery will drop, and it will start showing the economics that are showing in our most mature cities,” Biswas said in another media interview.

    The cash being pumped into Dunzo from its investors didn’t help either.

    Since its inception, Dunzo has already raised a massive ₹3,251 crore, according to data researcher Private Circle. This has been done through 12 rounds of funding.

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    How’s It Going

    With the world returning to normalcy after the pandemic, there has been a deep correction in the demand surge that Quick Commerce players experienced a few years ago. This has hit hyper-local players below the belt.

    The freebies that Dunzo offered came back to bite Dunzo, and its business model had to be restructured. According to a report on Entrackr, Dunzo was losing ₹240 on each of its orders. The speed delivery app was left with no choice but to increase its speed delivery charges and slap additional handling charges onto the customer.

    The backbone of Dunzo was its happy customers, who loved the delivery system and the user interface. Soon, there were signs of cracks in this backbone too, as many were not happy with the additional costs.

    According to a survey conducted by market research firm Recogn in August–September 2021, only 11% of hyperlocal consumers prefer to use Dunzo. This is just a slice of the pie dominated by Zomato, which has 50% of consumer loyalty, followed by Swiggy at 35%.

    Biswas had learned his lesson the hard way. In a media interview two years ago, Biswas said, “We understand why we are spending money, and we have been at fault. We have gotten lucky. We have made mistakes in which money got spent incorrectly, and I very humbly accept the fact that our investors were very nice enough to go ahead and say, haa galti ho gaya iss time (you made a mistake this time), but don’t go ahead and do this mistake again.”

    Layoffs and Exits

    In the last few months, Dunzo has been on a massive organizational rejig, which may well be a planned one.

    According to media reports, Dunzo has laid off 30% of its employees since its fund infusion in April and has deferred salaries as well. Dunzo is shutting down its dark stores nationwide; from 250, it is now less than 10. Dark stores are retail distribution centers that are not open to the public and cater solely to online shoppers.

    Another report also talked about Dunzo’s plans to withdraw from its direct-to-consumer model and focus on its merchants, explaining why it was shutting down its dark stores.

    In an interview with CNBC-TV18 in February this year, Biswas hinted at layoffs. “This year, there might be changes in the way we have designed the organization and how we have organized the company. Last year, we were organized around just plain growth. But this year onwards, I think because we have found a really large market, a large part of the organization looks at scalable business models, and a smaller one goes ahead and looks at growth. So when you go ahead and do that reorganization, there could be some changes that could happen.” Biswas has said.

    Dunzo is also hoping for another round of fund infusions from its investors to the tune of around $20 million, which would pump some oxygen into the beleaguered company. However, it has been unable to garner funds due to valuation disagreements.

    However, sirens have now started blaring, with co-founder Dalvir Suri exiting the board a few weeks ago. The latest to join the list of exitees is Head of Finance Sudarshan N, amid reports of another co-founder, Subhas Jha, also quitting.

    The spate of bad news seemed to continue for the delivery company as board members Vaidhehi Ravindran from Lightrock and Rajendra Kamath and Ashwin Khasgiwala from Reliance Retail too seemed to have stepped down from the board, according to a newspaper report. The report further said that the members might resume the board once the company locks in another round of funding. The investors seemed to have shown Dunzo ‘the hand’ as far as additional funding.

    Conclusion

    Given its financial situation, Dunzo has little choice but to rejig its operations and look at other viable options that can keep the company afloat.

    The layoffs could help the company with its cash crunch to some extent. Meanwhile, the company has now reportedly shifted focus to Dunzo Merchant Services, its direct business-to-business delivery vertical.

    However, time is running short for Dunzo, as its investors would want to buy out the company at lower valuations, in case of irreparable damage. Reliance Retail has a track record when it comes to acquiring companies through distress sales. For instance, furniture retailer Urban Ladder and milk and grocery retailer Milk Basket that it acquired in 2020 and 2022 respectively.

    A lot will depend on Biswas’ leadership and how he navigates the company through these bumpy roads. Just like its delivery boys, this time around, Dunzo will have to ensure it delivers its worth on time or succumb to overbearing investors.

    FAQs

    What exactly does Dunzo do?

    Dunzo is an on-demand delivery service operating in India. This company offers a wide range of items and services for delivery, catering to a variety of needs, all at competitive delivery rates.

    Who are the founders of Dunzo?

    Kabeer Biswas, Ankur Agarwal, Dalvir Suri, and Mukund Jha are the co-founders of Dunzo.

    When was Dunzo founded?

    Dunzo was founded in the year 2014.

  • How China’s Economic Woes Reshape Global Trade Dynamics

    The name China brings one word to our minds- Economy! That’s because China’s economy has always been in the limelight due to several reasons.

    China’s economic ascent from the late 20th century until the global financial crisis of 2008 is nothing short of remarkable. In the late 1970s, China embarked on a series of economic reforms under the leadership of Deng Xiaoping, transitioning from a centrally planned economy to a more market-oriented one.

    This shift unleashed a wave of transformative changes that catapulted China into becoming the world’s factory.

    A surge in exports, massive infrastructure development, and a burgeoning consumer market resulted in the annual GDP growth rates consistently exceeding 9%, with some years witnessing double-digit growth.

    The skylines of Chinese cities transformed at an unprecedented pace, with towering skyscrapers symbolizing the nation’s economic prowess. The world marveled at China’s ability to lift hundreds of millions of people out of poverty while becoming an integral player in international trade.

    That brings us to the main crux of the article, where we will discuss how the current crisis in Chain’s economy is impacting international trade.

    Growth Rate of Real Gross Domestic Product (GDP) In China From 2012 to 2022 With Forecasts Until 2028
    Growth Rate of Real Gross Domestic Product (GDP) In China From 2012 to 2022 With Forecasts Until 2028

    The Beginning of the Economic Crisis

    While the Chinese economy was flourishing till 2008, that year gave a huge setback to the economy of the whole world as well as China.

    Post-2008, China faced a series of economic challenges that contributed to a slowdown in its once-explosive growth.

    One major issue was the aftermath of the global financial crisis, where China’s export-dependent economy felt the impact.

    As the demand worldwide fell, China’s twin growth factors- FDI & exports, both fell to 36.5% and 2.2% respectively during this period. It is here, that China realized its huge dependence on foreign countries and their markets.

    Skipping ten years later, this economic cancer kept growing due to different reasons like failed economic policies, booming real estate sector, pandemic restrictions, diversification of businesses around the world, unemployment & many more factors which have now crippled the Chinese economy.

    Let’s see in depth about all these economic woes that are shaking the base of this huge economy.

    China’s Economic Woes

    Effects of China’s Economic Crisis on Other Countries

    China’s Economic Woes

    Demographic Crisis

    China is grappling with a demographic decline characterized by an aging population and a shrinking workforce. As a consequence of the long-standing one-child policy, implemented from 1979 to 2015, the proportion of elderly citizens has surged.

    According to data, the percentage of China’s population aged 60 and above reached 18.7% in 2020. To address this challenge, the Chinese government has implemented a two-child policy since 2016, aiming to boost the birth rate. Despite this policy shift, the impact of decades of population control measures is expected to persist resulting in declining domestic savings and investments.

    Soaring Local Government Debt

    After the 2008 crisis, China decided to move from an export-led growth strategy to local infrastructure-led growth. As a result, the Chinese officials unveiled a four trillion yuan ($586 billion) fiscal package.

    But the initiatives, which were centered on government-sponsored infrastructure projects, also brought about an unprecedented increase in credit and a huge rise in local government loans.

    In a similar situation now, due to the huge expenditure that the local governments had to incur for recurrent lockdowns, mass testing, and setting up quarantine facilities for implementing the Zero-Covid policy, the government coffers have once again drained resulting in high local government debt.

    China’s overall debt, public and private including all sectors of the economy, has piled up to $51.9 trillion, almost three times China’s GDP.

    The Property Market Crisis

    For many years, China’s economy relied on its expanding real estate market, which was supported by population growth. For China’s expanding middle class, the property market was a source of employment and they were highly optimistic about it & poured all their savings into it. However, due to several factors including stricter government regulations, the real estate prices declined.

    China’s two major real estate developers, Country Garden, and China Evergrande have reported huge losses of billions of dollars leading the public into a state of panic and distrust.

    Deflation

    Deflation has cropped up as a resultant major issue in the Chinese economy.

    By the end of 2020, the Chinese economy saw a major deflation due to a fall in the prices of pork, which forms a major portion of China’s meat consumption.

    Falling exports, zero-Covid policy, slowdown in property and banking sectors, unemployment, demographic crisis, and many other factors have joined hands in causing a situation of deflation in the economy.

    All this said, do the other countries need to worry about this current crisis in China?

    The next section explains how other parts of the world might be affected due Chinese economic crisis.

    China’s Rising National Debt Crisis
    National debt refers to the outstanding financial obligation of a particular country and what the central government owes to its creditors.
    Kinnary NenseeStartupTalky

    Effects of China’s Economic Crisis on Other Countries

    Global Supply Chain Disruptions

    China is pivotal in the global supply chain, particularly in manufacturing and exports. An economic crisis in China is very likely to disrupt the production and supply of goods, affecting industries worldwide. Reports say that China’s overall share of global goods exports was 14.4% in 2022 and as a result, interruptions in this could lead to shortages and increased production costs.

    Reduced Global Demand

    China is a major consumer of goods and services from around the world.

    A slowdown in the Chinese economy would likely result in decreased demand for imports, affecting economies heavily reliant on exporting to China. Reports say that imports into China had dropped by 7.3% in 2023.

    Industries such as commodities, luxury goods, and technology could experience a decline in sales and revenues.

    Financial Market Volatility

    Given its significant position in the global economy, any signs of a financial crisis in China may lead to increased volatility in international stock markets.

    Investors worldwide may react to uncertainties in China by adjusting their portfolios, impacting global financial stability. Also, a weakened Chinese economy might lead to fluctuations in currency exchange rates & trade balance.

    Impact of Deflation

    Among all this crisis, there is a silver lining too. The crisis in China has the potential to drag down global oil prices. Also, deflation in China will reflect in lower prices of goods that are being exported benefitting many other countries.

    Deflation is Amplifying China’s Economic Woes

    Impact on Developing Economies

    Many developing economies heavily depend on China as a trading partner and a source of investment.

    A downturn in the Chinese economy could lead to reduced demand for commodities, affecting countries that export raw materials to China.

    Countries receiving Chinese investments for infrastructure projects may also face challenges if China’s economic crisis results in reduced overseas investments.

    Conclusion

    In today’s globalized world, we cannot deny that such an economic crisis in one country or part of the world will definitely have a spillover effect worldwide. This makes it mandatory for us to keep a watch on all the global events & be adequately prepared for any such spillover effect.

    FAQs

    Is China going through an economic crisis?

    China, the world’s second-largest economy, is currently experiencing its most significant economic downturn. Over the past couple of years, it seems that the rate of economic growth has been nearly halved.

    What is China’s overall debt?

    China’s overall debt is around $51.9 trillion almost three times China’s GDP.

  • Slice-North East Small Finance Bank Merger: What Fintech Cos Should Take Note Of

    Diwali festivities seem to have started a wee bit early within the fintech ecosystem. Spirits are high after the tough taskmaster and India’s banking regulator Reserve Bank of India gave a no-objection certificate to what is being touted as a rare merger. 

    Digital payments app company–Slice Pay–merging with the lesser-known Guwahati-based North East Small Finance Bank has certainly piqued the interest of stakeholders. This move effectively gives Slice the power to raise deposits, and lend and offer their own unique products to customers of NESFB.

    Slice began operations in 2016 and was essentially a prepaid card with a credit line. According to data tracking platform Tracxn, the Bengaluru-based unicorn fintech company was valued at $1.8 billion as of March 2023. Meanwhile, NESFB’s valuation has been pegged at around $72.4 million.

    For financial technology companies, this move comes as a lifeline as it opens up another avenue for scaling up operations.

    In this article, we explore how fintech companies can lay the foundation and prepare for a probable merger-like scenario with a bank in the future.

    License VS Merger
    Points to Be Noted

    License VS Merger

    Getting a banking license in India is a big deal. RBI scrutinizes applications under a microscope. Earlier this year in July, the RBI rejected three applications for small finance bank licenses, maintaining its reputation for being a taskmaster. In 2022, the regulator had rejected 6 licenses as it found it unsuitable.

    One exception was the central bank’s green signal in 2021 to Resilient Innovations Pvt. Ltd (owned by fintech unicorn BharatPe) to buy a 49% stake in Unity Small Finance Bank. But, then this was a distress sale, where RBI was doing its job of safeguarding the deposit holders’ interest.

    PwC’s 2021 report on neobanks in India delved into the ambiguity surrounding regulations for smaller digital financial institutions. Neobanks is a term used for financial institutions or fintech companies that operate digitally, without a physical presence. “Currently, unlike neobanks, the regulatory regime does not envisage a completely digital method of offering financial products. It is extremely critical that the current indirect regulations are relooked at in light of the digital offerings of neobanks and their relationship with financial entities.”

    Transaction Value in the Neobanking Market
    Transaction Value in the Neobanking Market

    For a fintech company, opting to go through the due diligence of getting a bank license and following regulatory norms can prove to be a headache. At present, RBI rules state that a payments bank or an NBFC with a successful track record of 10 years is eligible to apply for a bank license. This may seem like a long wait for a fintech company as it may take years for some companies to even break even.

    A fintech company usually has three options when it comes to the renewal of its license. One, it either applies for a non-banking finance company license with the RBI. Two, it can choose to join hands with another fintech company. And three, taking the heartbreaking decision of shutting shop in case they don’t rake in enough value. The option of merging with a small finance bank as a business objective was never really given much thought, until now.

    Meanwhile, for a small finance bank, merging with a fintech company is a shortcut to upgrading its technology, staying relevant to the youth, and paring its losses to some extent. North East Small Finance Bank reported losses for the third straight year with losses widening to ₹288 crores in 2022-23. Its net worth dropped to ₹60 crore, much lower than RBI norms of maintaining a net worth of ₹200 crore. A section of the media has raised eyebrows over the shelf-life of this collaboration, given the losses on both sides and the contrasting cultures in both organizations.

    However, the Slice-NESFB merger seems to be a well-planned strategy and not a spur-of-the-moment decision. In March, Slice acquired a 5% stake in NESFB, to get “comfort”. Media reports have also quoted an unnamed source from the company claiming that Slice had been following through with due diligence over the past 15 months to get the deal through.

    True to their nature, startups, and fintech companies prefer to see this merger as a window of opportunity rather than view the deal with scepticism.

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    Points to Be Noted

    Before celebrations begin within the fintech space, it is time for companies to ponder over making the most of this development. How can they be the next in line as far as envisioning their banking ambitions are concerned? Taking cues from this new-age merger, we enlist a few parameters on which fintech companies can buckle up and chart a similar route to growth:

    Self-regulate Prudently

    Fintech companies have long borne the ‘bad boy’ image in the eyes of the regulator.

    In 2022, RBI barred non-banking entities from embedding credit lines in their loading PPIs (prepaid payment instruments) such as prepaid cards or mobile wallets. This decision had hit Slice itself which then applied for a PPI license and received it by the end of 2022.

    Recently RBI Governor Shaktikanta Das asked fintech companies to form a self-regulatory organization. In RBI’s view, such an organization would help to evolve best practices, protect privacy and data norms, avoid mis-selling, and promote ethical business practices.

    “You need to think you are already a small finance bank and create those kinds of capabilities within the organization before the regulator would even consider something like this,” said Yogi Sadana, Founder and CEO of Zype Loan App. He added, “Unlike an NBFC, the amount of opportunities and liabilities that rests on a bank which a banking license allows taking customer deposits, to open bank accounts, that’s a completely different ball game altogether as compared with an NBFC which was not taking customer deposits, in terms of governance standards, in terms of operating stats, cheques, and balances, more importantly, the management. “

    It’s only a matter of time before RBI comes cracking the whip on those who fail to comply, which could in turn tarnish the company’s image.

    “Eventually they (fintechs) should be ready to come under regulation…the framework for regulation may come. RBI does not leave any stone unturned to leave anybody out of their purview,” said Jaslene Bawa, from Flame University who has worked as a financial market researcher in the corporate sector.

    Bawa also said that having rigid mechanisms, assessing credit profiles, regular audits, keeping an easy cash flow, and creating a robust board can help a fintech or an NBFC get bank-ready.

    Play to Your Strengths

    Setting up an intricate financial technology infrastructure for a mid-sized or a small bank is an exhaustive process. In such a scenario, merging with a fintech company is akin to adding a bit of zing to their portfolio. In addition, fintech apps are a popular choice among the youth, giving ready access to a younger customer base, albeit small to begin with.

    “Strategic plan for a fintech should be how nimbly can they set this (technology) up. Can they set it up internally or do they need to acquire an existing company with skill sets and reputation which can marry their reputation, culture, and ethos so that integration of both is seamless and easier,” said Badrinarayan Vedanthan, a banker with 26 years experience across MNCs, SME and MSME/Rural Finance business sectors. Vedanthan, now an independent financial consultant, also previously served as the head of strategy at Suryoday Small Finance Bank.

    Slice’s main target has been the Gen Z and millennial crowd. In a media interview in 2021, Rajan Bajaj, founder of Slice emphasized how they would continue to target the young segment, despite their high-risk profile. “The average age of slice’s customers is 23-24, which differentiates us from the rest. We understand the risk and demand profile of this young customer and know how to help them navigate through their finances. At present, there is no other solution at a slice’s scale in the market that can cater to the needs of this generation in a transparent and scalable manner.”

    Fintech companies should play to their strengths as far as their technological reach is concerned. Digital payments have revolutionized the way Indian banks and organizations have managed to get millions of unbanked individuals into the purview. RBI’s Das acknowledged this feat in his speech at the G20 summit held in September.

    Just a month before the Slice-North East Small Finance Bank merger was announced, RBI Deputy Governor Rabi Sankar took note of the upper hand that fintech companies possess. Sankar said, “An arrangement of financial institutions buying services of fintech companies was “functional” adding, …fintech entities can perform functions where they have a competitive advantage and banks focusing on areas of their expertise. While customers benefit from an improved experience with curated products and services at competitive prices…”.

    Customer is King

    A customer-service-oriented approach will help a financial technology company deepen its stronghold and make it an attractive proposition for merging.

    “Banking is not just a business, it’s a responsible service, so if they wish to merge with any such entity, they have to make sure that the customer is well taken care of,” said former banker and head of department – finance at Lexicon MILE, Dr Manju Chopra. “Secondly, they (fintech companies) can go slow on the entire due diligence, the valuation study. Don’t hurry into valuing or finding these banks, ensure that synergies are very very high,” she added.

    The segment and geographies where a fintech company operates could also end up being their USP (unique selling point). Deepening that stronghold could turn fintech into an attractive proposition.

    RBI’s Das has himself stressed the three key aspects that will make fintech “future-ready”.

    “…key issues which are critical for the Fintech ecosystem to be stable and future ready. In this context, three critical issues, viz., customer centricity, governance, and self-regulation merit attention.”

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    Conclusion

    On the surface, this merger seems like a foot in the door for financial technology companies’ growth, but it has raised many eyebrows for its “unusual marriage” of two contrasts.

    It’s indeed an uphill task for both entities to find a middle ground as far as expanding their customer base, scaling up technology, and customer data sharing are concerned. Only time will tell if these opposites, who have attracted themselves to each other, will result in a honeymoon period for customers.

    Unarguably, the merger has set the ball rolling for a number of possibilities for fintech companies and small finance banks to stay afloat. In the meantime, it only makes sense for these smaller players to clean up their image and books so that they are not caught by surprise when the RBI comes knocking at the door.

  • Analyzing Government Advertising Expenditure in India: Transforming Media Strategies

    The famous Amul girl was probably one of the earliest media influencers that we know of. From there, till today, where we have millions of influencers influencing our lives’ choices on a daily basis, the journey of advertisements has seen a huge evolution.

    Let’s rewind to the 1700s. A British officer stationed in Calcutta named James Augustus Hickey published the country’s first newspaper known as “Hickey’s Bengal Gazette” or “The Bengal Gazette” in 1780. To fund the newspapers and for a few other reasons, Hickey started posting advertisements in the newspaper, thus beginning the journey of advertisements in India.

    Today we’re in a state, where we have to watch not one, but two advertisements before almost every YouTube video. Advertisements have become such an inescapable part of our daily lives.

    Evolution of Media Strategies
    Government’s Expenditure on Advertisements
    What Do Experts Say About the Trends in Print and Digital Advertisements?
    Role of Advertisements in the Country’s Economy

    Evolution of Media Strategies

    Over the past few decades, the landscape of advertising in India has undergone a huge transformative shift, primarily fuelled by the digital revolution. Traditional media, while still relevant, has taken a backseat as digital platforms emerged as the new frontier.

    The 20th and 21st centuries saw a huge transformation of advertisements from newspapers, magazine advertising, radio broadcasting, television advertising, and Out-of-home advertisements which include billboards, transit advertising, and street furniture advertising to digital and mobile advertising.

    Now, in the digital age, reports like ‘Internet in India Report 2022’ say that there are 759 million active internet users in India as of 2022. Also, the numbers are expected to rise to 900 million by 2025.

    As a result, brands have started to redirect their focus towards online spaces, leveraging social media, search engines, and other digital channels to connect with their audience. Today, social media is where ads shine, and influencers play a big role. Thus, from clever memes to touching short films, Indian ads have come a long way since the beginning of advertisements in the 1780s.

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    Government’s Expenditure on Advertisements

    Keeping this evolution story aside, now let’s see some numbers to analyze the actual state and growth of advertisements in the past few years.

    Reports say that the Government’s expenditure on advertisements in print, electronic & digital media has shown a declining trend in the past few years.

    In response to an RTI query, the Ministry of Information and Broadcasting released some numbers in July 2023.

    According to them, the central government’s advertisement expenditure was ₹1180 crore in 2018-19, ₹708 crore in 2019-20, ₹409 crore in 2020-21 and further declining to ₹315 crore in 2021-22.

    Now let’s compare the print & digital advertisements.

    Year Print Digital
    2018-2019 ₹430 crore ₹515 crore
    2019-2020 ₹295 crore ₹317 crore
    2020-2021 ₹198 crore ₹167 crore
    2021-2022 ₹179 crore ₹101 crore

    What’s surprising from the above table is that while the expenditure on print advertisements is expected to fall with the growing digital media, the expenditure on digital advertisements is expected to have risen over the years, which is evidently not the case.

    Earlier in 2021, the Minister of Information and Broadcasting Anurag Thakur had said that the government has cut back on spending on advertisements by limiting the quantity of non-communication advertisements like those that invite bids or post job openings and by providing a small amount of information with links to more information.

    This being the case, reports also say that the expenditure on advertisements by the government has slightly gone up in the financial year 2023 to ₹375 crores.

    The Credit Rating Information Services of India Limited (CRISIL) forecasts, “The revenue of print media is expected to jump 13 to 15 percent this year (2023) on the back of higher spending on advertisements by corporates as well as the government due to upcoming elections”.

    On the same lines, Amit Khurana, deputy chief executive officer, of TechNova Imaging Systems says, “With newsprint prices declining, the newspaper industry is heading towards profitability.”

    Commenting on the digital media trends, media analyst Karan Taurani says, “Over the last few years, radio advertisements have come down sharply, considering their low popularity. But TV advertisements haven’t really fallen.”

    From all these reports & comments, we get a broader picture of where the different forms of advertisements stand, today.

    But why do advertisements need so much analysis? What role do they play in a country’s economy?

    Role of Advertisements in the Country’s Economy

    Advertisements play a multifaceted role in the development of a country, influencing various aspects of society and the economy.

    Advertisements are crucial for economic development as they drive consumer spending. By promoting goods and services, advertisements contribute to increased sales and production, fostering economic growth.

    Also, the advertising industry itself becomes a source of employment and stimulates demand for creative talent, marketing professionals, and media personnel.

    Advertisements provide a platform for businesses & entrepreneurs, particularly small and medium enterprises (SMEs), to reach a wider audience. Effective advertising can help startups and entrepreneurs establish their brands, attract customers, and compete in the market.

    Governments often use advertising to generate revenue. The public service announcements, sponsored content, and partnerships with private advertisers contribute to government coffers.

    Advertisements play a role in shaping cultural norms and values. They reflect and influence societal trends, attitudes, and aspirations. Ad campaigns often contribute to cultural conversations, challenging stereotypes, and promoting inclusivity.

    The media industry is significantly dependent on income generated from advertising. Newspapers, television, radio, and online platforms depend on ads for financial sustenance.

    Advertisements are a means of disseminating information about products, services, and public initiatives. Public service announcements also educate citizens about health, safety, and civic responsibilities.

    Advertisements are powerful tools for social advocacy. Campaigns addressing social issues, such as public health, environmental concerns, and social justice, can raise awareness and mobilize support for positive change.

    For instance, advertisements played a major role in spreading crucial awareness during the COVID-19 pandemic.

    Conclusion

    On the whole, advertisements play a pivotal role in shaping the economic, cultural, and social dimensions of a country. That said, the utilization and expenditure on advertisements also depend on the current economic & social conditions prevailing in a country.

    Yet, in every circumstance, it is important to strike a balance between commercial interests and societal welfare to ensure that advertisements contribute positively to a country’s development.

  • Silicon Valley Bank Failure and Its Impact on India

    On March 10, 2022, the entire business world woke up to this shocking news from the Federal Deposit Insurance Corporation (FDIC),

    “Today, Silicon Valley Bank, located in Santa Clara, California, was shut down by the California Department of Financial Protection and Innovation. The Federal Deposit Insurance Corporation (FDIC) has been designated as the receiver in this case.”

    This news sent shockwaves throughout the sector. This was the largest bank to have failed since the 2008 financial crisis & the second largest in the history of the US. This created huge chaos in the financial market because the shutdown of a bank as large as SVB would mean a very large situational crisis for businesses all over the world.

    About the SVB
    Chronology of the Events Leading to the Downfall

    Impact on India
    Current Status

    About the SVB

    Nestled in the heart of innovation and techie dreams, Silicon Valley Bank stood as the financial bedrock of the world’s most dynamic and groundbreaking industries.

    Since its inception in 1983, SVB has been one of the largest banks in the USA with more than $200 billion in assets. Silicon Valley Bank is a venture debt provider that specializes in funding tech startups all over the world.

    As the financial pulse of the tech mecca, SVB had greatly adapted to the fast-paced rhythms of Silicon Valley.

    This financial powerhouse had been more than a bank to the startups; it was a strategic partner, a mentor to startups, and a catalyst for entrepreneurial success.

    With a client list like Tesla, Uber & LinkedIn, SVB had carved a niche as the go-to financial institution for the ever-evolving needs of the tech community. In 2022, Forbes named SVB among America’s best banks.

    Largest Bank Failures in the United States, March 2023
    Largest Bank Failures in the United States, March 2023

    Chronology of the Events Leading to the Downfall

    Just like the many other important events of the past decade, this too had its genesis in the pandemic. Adding fire to the flame was the Ukraine-Russia war.

    Let’s dig deeper into its roots.

    The Pandemic

    As the pandemic hit and the whole world came to a standstill inside the four walls, the software industry was one among the few others that remained largely unaffected.

    This turned the attention of the venture capitalists towards this industry. This resulted in the tech startups raising a huge sum of money in 2021. These venture capital investments nearly doubled year-over-year to around $329 billion in 2021.

    This further resulted in banks holding a lot of deposits including the SVB. According to data by Bloomberg, it was estimated that as of March 2021, SVB had jumped to $124 billion from $62 billion in the previous year.

    On the other hand, due to the pandemic, the interest rates have gone too low. SVB wanted to make use of this situation & provided high-interest rates to the depositors at around 2.33% while other banks like Bank of America were giving an interest rate of 0.96%.

    This also resulted in many big businesses depositing their money with SVB resulting in a huge influx of cash.

    As a result, SVB invested heavy sums of money in long-term bonds for its Hold to Maturity (HTM) portfolio with 10 years of maturity.

    Everything was smooth until the next major factor came in.

    Ukraine-Russia War

    The war led to an energy crisis all over the world leading to a high inflation rate. According to the Bureau of Labour Statistics, inflation in the US peaked at 9.1 % in 2022. So, as the usual financial procedure goes, the interest rates skyrocketed to 4.33%.

    This led to the lowering of bond values affecting the values of bonds bought by SVB. Also due to high interest rates, businesses, instead of opting for loans for their financial needs, started withdrawing their deposits from the bank. This led to billions of dollars being withdrawn from the bank at the same time.

    To address this liquidity crisis, SVB had to sell a $ 21 billion bond portfolio at a $1.8 billion loss.

    As the news spread, this led to a situation of bank-run further creating a sense of fear in the whole business world and the stocks of SVB plunged by 60% in a single day. As a result, SVB couldn’t carry on further with its banking activities.

    Eventually, the Federal Deposit Insurance Corporation (FDIC) took over and created a new bank called the National Bank of Santa Clara to continue the business activities further.

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    Impact on India

    The Indian Government and the economists had assured that there wouldn’t be much of a contagion effect on the Indian market due to the collapse of SVB.

    Sakshi Gupta, Deputy Vice President of HDFC Bank says, “The SVB collapse is unlikely to turn into a systemic risk. India’s banking system exposure to the SVB collapse is low and the health of the banking system remains sound….”

    That said, we need to understand that some sectors including our tech-based startups and IT firms will be affected to some extent.

    For example, among the startups, specifically those that were funded by the American incubator, YCombinator will have to face the consequences of the collapse. That’s because about 60% of the YCombinator’s startups in India have exposure to SVB.

    Also, this collapse might slow down the funding that the whole startup ecosystem has been getting & result in an overall slowdown of the sector.

    Another important factor to consider is the decline in overall confidence that the public has in the banking system resulting in a drop in deposits & other banking activities.

    As far as SVB’s Indian clients are concerned, their priority should be to determine how exposed they are to the bank and take the necessary precautions to safeguard their assets and enterprises. This may include getting legal help, revisiting loan terms, and looking for other finance and investment options.

    Current Status

    Currently, Silicon Valley Bank is operating as a division of the First Citizen Bank

    Conclusion

    The downfall of a bank as big as SVB is a reminder of the significance of prudent risk management and investing methods, particularly in the financial industry. It also emphasizes the importance of policymakers carefully considering how their choices would affect the financial sector and the overall economy.