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  • Web3’s Impact on Indian Economy; $1.1 Trillion Growth by 2032

    Web3 to add $1.1 trillion to India’s GDP by 2032. Over 450 Web3 startups in India raised $1.3 billion in funding by April 2023.

    Web3 is the next generation of the internet, built on blockchain technology. It is a decentralized and open web that gives users more control over their data and privacy. Web3 is still in its early stages of development, but it has the potential to revolutionize many industries and sectors.

    Web3 is impacting the Indian economy in several ways. One of the most significant impacts is on economic growth. A report by the US-India Strategic Partnership Forum found that Web3 could add $1.1 trillion to India’s GDP by 2032. This growth would be driven by several factors, including the creation of new jobs, the expansion of existing businesses, and the development of new industries.

    A report by NASSCOM found that over 450 Web3 startups in India had raised $1.3 billion in funding by April 2023. This funding is being used to develop new Web3 products and services and to hire new employees. The Web3 job market in India is expected to continue to grow in the years to come, as more and more businesses adopt Web3 technology.

    Another way that Web3 is impacting the Indian economy is by promoting financial inclusion. Web3 could help to bring financial services to millions of Indians who are currently unbanked or underbanked. For example, decentralized finance (DeFi) applications can provide loans and other financial services to people without a bank account. It is also fostering innovation in a wide range of sectors, including finance, healthcare, and education. For example, Indian startups are developing Web3-based applications for everything from supply chain management to medical records. These applications have the potential to improve efficiency, transparency, and security in a variety of industries.

    Key Impacts of Web3 on the Indian Economy
    Opportunities and Challenges for Web3 to Grow in India
    Role of Government and Private Sector in Supporting the Growth
    Web3’s Impact on Key Indian Industries

    Key Impacts of Web3 on the Indian Economy

    Mr. Alankar Saxena, CTO of Mudrex, said, “Web3 is starting to transform the Indian economy already. It enables secure digital identity solutions, reduces fraud, and improves supply chain transparency. NFTs and decentralized finance (DeFi) platforms are gaining traction, opening new investment opportunities. Overall, Web3 is poised to reshape various sectors, fostering innovation and economic growth.”

    As per a recent report published by Chainalysis, India ranks first globally in Grassroots Crypto Adoption. In terms of the raw volume of transactions, the country has the second-greatest number in the world, beating out those of several other, wealthier nations. About 75,000 people in the country are engaged in the sector at present. This number constitutes 11% of the global talent.

    Mr. Dilip Chenoy, Chairman of Bharat Web3 Association said, “The widespread adoption of Web3 in the country is visible across the spectrum of applications that have evolved out of the technology. For example, consider DeFi. The country has been the number one adopter of DeFi in terms of value received on the chain, with an estimated $88 billion received in 2020-21. The NFT market alone generated a revenue of $9 million in 2023 and is expected to grow significantly over the next few years.”

    Further, he also mentioned that use cases of the technology have emerged across sectors over the years with public and private sector organizations implementing Web3 for solutions related to education, lending, real estate, service delivery, healthcare, and more.

    The government of Maharashtra recently issued caste certificates to its 65,000 residents via LegitDoc — a polygon public blockchain-based platform. Further, the Delhi Forensic Science Laboratory (DFSL) and the Delhi Police have integrated blockchain technology into their e-forensic application, ensuring an immutable and transparent record of the chain of custody for evidence.

    Investments in Indian Web3 Startups
    Investments in Indian Web3 Startups

    Opportunities and Challenges for Web3 to Grow in India

    Mr. Trishneet Arora, Founder and CEO of TAC Security pointed out a few key opportunities and challenges existing in the Indian Web3 space.

    Opportunities

    • Decentralized Finance (DeFi) Adoption: India’s financial landscape is poised for transformation with DeFi. The opportunity for decentralized lending, borrowing, and trading platforms to provide financial inclusion and accessibility to millions of unbanked or underbanked Indians is immense.
    • Blockchain-based Supply Chains: India’s supply chain challenges, particularly in agriculture, can benefit from blockchain’s transparency and traceability. Blockchain-based solutions offer the opportunity to streamline supply chains, reduce fraud, and improve food safety.
    • Digital Identity Solutions: India’s push for digital identity solutions is an opportunity for Web3 to provide secure, self-sovereign identity solutions.
    • NFT Market Growth: India’s thriving art and entertainment industry can benefit from NFTs, allowing creators to monetize digital assets.
    • Smart Contracts for Legal Tech: Smart contracts can revolutionize the legal industry by automating agreements and reducing the need for intermediaries.
    • Data Privacy and Ownership: The growing concern for data privacy and ownership provides opportunities for Web3 solutions that empower individuals to control their data.
    • DApps for Business: Decentralized applications (DApps) built on blockchain offer increased transparency and security. They can find applications in supply chain management, finance, and more.

    Challenges

    • Regulatory Uncertainty: The evolving regulatory landscape for cryptocurrencies and blockchain in India poses a challenge.
    • Cybersecurity Threats: With the growth of Web3, cybersecurity threats become more complex. TAC Security faces the challenge of staying ahead of emerging threats and vulnerabilities to provide robust cybersecurity solutions.
    • Lack of Awareness: Widespread adoption of Web3 technologies in India may be hindered by a lack of awareness and understanding. TAC Security can contribute to education and awareness efforts to address this challenge.
    • Infrastructure and Connectivity: Web3 relies on a robust digital infrastructure and reliable internet connectivity. Addressing infrastructure gaps and improving connectivity in remote areas can be challenging but essential for Web3 growth.
    • User Trust and Adoption: Building user trust in Web3 applications and encouraging adoption is crucial.
    • Scalability: As Web3 platforms gain popularity, scalability becomes a challenge.
    • Interoperability: The interoperability of different Web3 technologies and blockchains is vital for seamless integration.

    Web3 presents a transformative potential for India, with opportunities spanning finance, supply chains, digital identity, and more. However, it also comes with regulatory, cybersecurity, and infrastructure challenges that TAC Security must address to facilitate its growth and secure its implementation effectively.

    Mr. Kumar Gaurav, Founder and CEO of Cashaa said, “Until the uncertainty in regulations persists, the investment community cannot go full steam in backing this technological development in the country and large-scale mass adoption will also not be possible. Educating the user base about the potential and challenges of this technology is also lacking at the moment.”

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    Role of Government and Private Sector in Supporting the Growth

    The Government has taken a keen interest in the development of Web3 in the country with the Ministry of Information and Technology (MeitY) working to develop the National Blockchain Framework and advance the National Blockchain Strategy. The Bharat Web3 Association (BWA) also conducted a workshop in collaboration with the Ministry of Information and Technology as part of a larger effort to demystify Web3 and bridge the gap between the government and the private sector.

    Mr. Chenoy, of Bharat Web3 Association, said, “The government and private sector have also been collaborating on Capacity Building and Education in the Web3 space. Private as well as government universities are increasingly integrating dedicated Web3 curriculums and programs to familiarize students with the nuances of Web3 and develop a specific skill set for future growth within the sector.”

    He further mentioned that the governments can also provide financial support to startups engaged in the Web3 space through funding programs, grants, tax breaks, and other incentives to incentivize the growth of the Web3 sector in India.

    India has also seen major developments in terms of regulation over the past 2 years. The major developments include MeitY releasing the National Strategy on Blockchain, The Advertising Standards Council of India releasing guidelines for advertising VDAs, inclusion of VDAs under the purview of the Income Tax Act, 1961, The Indian Computer Emergency Response Team (CERT-In) issuing guidelines for Virtual Asset Service Providers (VASPs) under the IT Act 2001, National Cyber Crime reporting portal creating a channel for customers to report fraud in the industry, and Prevention of Money Laundering Act registering VASPs as ‘reporting entities’.

    Additionally, state governments have also taken a proactive approach to the growth of the Web3 sector. This can be seen through the development of regulatory sandboxes, which provide a controlled environment for testing and experimentation with Web3 technologies in a compliant manner. The Telangana Regulatory Sandbox initiated by the Government of Telangana, allows startups, innovators, and corporates to test their solutions in a controlled environment over up to 6 months. Several state governments are now interested in the creation of a regulatory sandbox to promote the growth of Web3 startups in their states.

    Mr. Arora, of TAC Security highlighted several key developments in India’s Web3 landscape. Private sector entities, particularly startups, are actively driving Web3 solutions across sectors like finance, healthcare, and supply chain, bolstering Web3 technology’s growth. Private investors and venture capital firms provide essential funding, expediting innovation. Companies are integrating Web3 tech into their operations, such as blockchain for supply chain management and DeFi in finance. Collaborations between private organizations and educational institutions are addressing the skills gap in the industry, while advocacy groups promote Web3 technologies. Additionally, private cybersecurity firms, including TAC Security, are enhancing security for Web3 platforms. Mr. Arora stressed the significance of public-private collaboration in India, with the government working on regulatory frameworks and digital infrastructure, while the private sector fuels Web3 innovation, investment, and adoption, ensuring its sustainable growth in the country.

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    Web3’s Impact on Key Indian Industries

    Nishant Sachdev, VP-Strategy, Compunnel, mentioned that India’s extensive tech population has the potential to significantly contribute to Web3. He highlighted that Compunnel’s AI-supported recruitment platforms are dedicated to matching the appropriate talent with the changing requirements within this domain.

    He also pointed out the significance of the rising middle class and how it can impact business dynamics. Nishant Sachdev emphasized that their market research, powered by OpenAI, is focused on identifying the evolving investment trends within this demographic. This research aids businesses in customizing their offerings to align with the changing preferences and needs of the middle class.

    Web3 technologies have the potential to impact a wide range of industries in India. While their influence can extend to many sectors, some specific industries are likely to be significantly impacted by Web3:

    • Finance and Banking: Web3 technologies, especially blockchain and decentralized finance (DeFi), can revolutionize traditional banking and financial services. They offer opportunities for faster and more cost-effective transactions, financial inclusion, and secure digital assets management.
    • Supply Chain Management: Blockchain-based supply chain solutions can enhance transparency, traceability, and efficiency in industries like agriculture, manufacturing, and logistics. This can lead to reduced fraud, improved product quality, and streamlined processes.
    • Healthcare: Web3 technologies can secure and streamline electronic health records, ensuring data privacy and interoperability. Smart contracts can automate insurance claims, and telemedicine can benefit from decentralized applications (DApps).
    • Government and Governance: Blockchain has the potential to enhance government services, such as land record management, voting systems, and identity verification. This can lead to reduced corruption, increased transparency, and efficient public service delivery.
    • Art and Entertainment: Non-fungible tokens (NFTs) on Web3 platforms have opened up new avenues for artists, musicians, and content creators to monetize their digital assets. The entertainment industry can leverage blockchain for rights management.
    • Education: Blockchain can be used to verify academic credentials and qualifications, reducing fraud, and simplifying the verification process for educational institutions and employers.
    • Real Estate: Property transactions and land records can be made more secure and efficient with blockchain technology, reducing the risk of fraud and disputes.
    • Agriculture: Web3 can help farmers by providing transparent and secure supply chain solutions. It can also facilitate access to financing and markets for agricultural products.
    • Energy and Utilities: Blockchain can enable transparent energy trading and reduce fraud in utility billing. Decentralized energy grids can enhance energy distribution efficiency.
    • Legal Services: Smart contracts on blockchain can automate legal agreements, making legal processes more efficient and cost-effective.
    • Insurance: The insurance industry can benefit from smart contracts for claims processing and more accurate risk assessment.
    • Retail and E-commerce: Web3 technologies can enhance customer trust through transparent supply chains and secure online transactions.
    • Cybersecurity: With the adoption of Web3, the need for robust cybersecurity solutions to protect digital assets and user data becomes even more critical.

    Mr. Chenoy mentioned that Apollo Hospitals is employing the Metaverse for various purposes, including patient consultations before and after surgeries. Additionally, they are utilizing it for staff training to facilitate patient counseling in a virtual reality setting. The objective is to enhance patient outcomes by offering a personalized approach to each patient, ultimately leading to increased patient satisfaction.

    Furthermore, Flipkart has introduced the Flipverse, a marketplace designed to foster more immersive interactions between consumers and brands. It achieves this by granting access to brands, supercoins, and digital collectibles. The Flipverse is designed to provide gamified, interactive, and immersive shopping experiences.

    In the automotive sector in India, several manufacturers have ventured into the world of the metaverse. At the recent Auto Expo 2023, MG Motor India unveiled the MGverse, a futuristic 3D metaverse platform. This platform allows users to virtually explore the MG Pavilion at the Auto Expo 2023 from any location, offering a virtual tour of the event.

    Also, in West Bengal, the New Town Kolkata Development Authority (NKDA) has outlined plans to release 500,000 non-fungible tokens (NFTs) to enhance the land mutation process. Land mutation is a legal procedure involving the registration and transfer of land ownership.

    While these industries stand to be significantly impacted, it’s essential to note that Web3 technologies are highly versatile and can find applications in various sectors, contributing to innovation and transformation across the Indian economy.

  • Government GPU Cluster Plan: Industry Cheers but Roots for Upskilling

    The Indian government’s plan of setting up graphic processing unit (GPU) clusters for startups in the artificial intelligence industry may be a step in the right direction but will reap benefits only when complemented with adequate development of skills and technical know-how across the country, according to a few industry experts that StartupTalky spoke with.

    On September 22, Union Minister Rajeev Chandrasekar said the government plans to set up a major GPU cluster under the India AI (Artificial Intelligence) program. There have also been media reports citing that the officials in the Ministry of Electronics and IT have been discussing a proposal to set up a cluster of 25,000 GPUs under a public-private partnership (PPP model) for AI start-ups.

    Unlike CPUs (Central Processing Unit) of a computer which performs simple computations; GPUs perform more complex and heavy computations. For instance: processing images, special effects, highly intensive applications such as video games, and artificial intelligence.

    AI Boom
    Skills – Need of the Hour
    Skill Development Initiative

    AI Boom

    At a time when the AI sector in India is expected to boom, this move by the government has sent a wave of initial optimism among startups and industry leaders. 

    “…this forward-thinking initiative could be a game-changer for India’s AI startups, including companies such as Josh in the content creation space,” said Sunder Venketraman, Head of Content, Creator and Monetization Ecosystem, Josh App, VerSe Innovation. “At Josh, we’ve been leveraging AI to empower creators across Bharat and this development gives the motivation and confidence in the future of content creation in the country,” Venkataraman said.

    The International Market Analysis Research and Consulting Group expects the AI market in India to witness a sharp growth of around 33% during 2023-2028 to touch $3.9 billion by 2028.

    As of now, the key manufacturers in the GPU market are NVIDIA and AMD, both headquartered in California. According to global trade data provider Volza, India is the top importer of GPUs in the world as of May 2023. As of May 31, India’s GPU imports stood at 31,022 shipments.

    There has been a sudden surge in demand for GPUs as AI companies look to integrate them into applications and programs. During his recent visit to India, Nvidia Corp. Chief Executive Officer Jensen Huang touted India to be “One of the largest AI markets in the world”.

    “India will have to walk on both legs, balancing manufacturing as well as the service sector, with the private sector driving the tailwinds of the Indian economy,” said CRISIL chief economist D.K. Joshi.

    Setting up GPU clusters will eventually translate into speedier processing and a shorter turnaround time for processing vast data.

    Skills – Need of the Hour

    However, as automation and the AI industry mushroom in the country, there is a dire need to develop skills to complement this change.

    Partner at Optimyze Finance LLP Manu Gupta told StartupTalky, “This is an important move as the world is coming to consume content in the video. The world is less about text today and moving about images and video. Tax incentives are a very powerful tool that the government has, to attract investment. But at the end of the day, this is a very knowledge-based industry. It is the skills of the people which will make somebody set up shop.”

    Recently, JLL in its report said it expects India’s data centre industry to add 693 MW of capacity by the end of 2026. This sharp rise is expected on the back of increasing digital growth, digital public infrastructure, 5G rollout, and new AI applications like machine learning coupled with data protection laws and state incentives.

    “To use the automation, I need to have the skill set. This learning process needs to be imparted to people. I need manpower for AI, which needs to be implemented right at school and college levels to develop the skill set. Secondly, general people need to be educated through ads or public awareness, training programs on how to simultaneously upgrade or update AI process and skill sets,” said the India operations Chief Financial Officer of a large France-based digital solutions company who requested anonymity.

    Skill Development Initiative

    Recognising this need, Prime Minister Narendra Modi during the recently concluded Group of 20 countries meeting in September called for a huge thrust on upskilling during his interaction with the labour ministry officials.

    “We all need to skill our workforce in the use of advanced technologies and processes. Skilling, re-skilling and upskilling are the mantras for the future workforce. In India, our Skill India Mission is a campaign to connect with this reality,” Modi said. 

    The government has also recently launched the Skill India Digital program which is an online platform to encourage skill development, education, employment, and entrepreneurship within the country.

    Earlier this year, the government also launched “AI for India 2.0”, an online free training program on AI in vernacular languages. This is a joint initiative by GUVI (Grab Your Vernacular Imprint–an IIT Madras and IIM Ahmedabad incubated education technology company) and Skill India.

    Looks like the beginning of a long road to upskilling and learning for a digital India. 

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  • Are Virtual Influencers the New Age Celebrities?

    What do you feel when you read the term “virtual influencers”? Are you mind-boggled, amazed, interested, not sure, intimated, or wondering who they are? – Whatever you feel, one thing is certain: virtual influencers cannot be ignored anymore and are here to stay.

    Who are Virtual Influencers
    Why Brands are Queuing up to Virtual Influencers
    Pros and Cons of Virtual Influencers

    Who are Virtual Influencers

    Let’s simplify who a virtual influencer is. As the name suggests, virtual influencers are not real; they are virtual. They are a set of computer-generated images or videos created by a team of 3D artists, software engineers, art and creative directors, gaming experts, and content creators. They are pretty much like any animated movie character. However, the key difference is that virtual influencers have a public persona, have a solid backstory, and are virtually living their lives on a daily basis, much like any of us! For example, Naina Avatr, with an Instagram following of 156K, is from Jhansi and has relocated to Mumbai. She dreams of being an actor someday and is often papped by the media at celebrity events or even on her way to the Mumbai airport!

    Why Brands are Queuing up to Virtual Influencers

    The world is sitting up and taking notice of these virtual influencers, and the numbers are proof. Brazil’s virtual influencer star Lu Do Magalu boasts a Facebook following of 14 million, almost on par with former Brazilian President Jair Messias Bolsonaro’s 15 million followers on Facebook. India’s very own first virtual influencer, Kyra Onig, has amassed 247K followers since her debut on Instagram in January 2022 and clocks several million views with her reels.

    These numbers are not surprising considering these virtual influencers are grabbing eyeballs by the millions. According to research and analytics firm Demandsage, 60% of the world population (roughly around 4.9 billion), use social media. This number is expected to rise to 5.85 billion by 2027. China, India, and the USA hold the top three slots for having the most social media users in the world. India stands second with 755 million social media users—an impressive penetration rate of 33%.

    For such countries that consume social media much like food, it’s no surprise that companies and brands are making a beeline to hire these virtual heroes. In India, Kyra has already endorsed brands such as boAt Lifestyle, Wow Skin Science, Colors TV, and American Tourister India, to name a few.

    The well-known virtual robot model Lil Miquela from San Francisco has brands like Prada, Dior, and Calvin Klein to her name. E-commerce retailer Myntra recently introduced their virtual fashion influencer Maya to boost engagement with their customers during their recent End of Reason Sale campaign.

    So what makes these virtual influencers attractive brand ambassadors? To begin with, a lot of social media users are hooked on their daily life changes and even their backstories. For example, Kyra’s creator–Himanshu Goel– divulged her backstory on a chat show, about Kyra being the metaverse and having lost her way and her memory. Now, isn’t this almost like watching a soap opera-cum-reality show play out on social media?

    Pros and Cons of Virtual Influencers

    However alluring they may seem, hiring a virtual influencer can be a double-edged sword. 

    Pros:

    • Budget-friendly: Hiring virtual influencers can save a company tons of money. As of today, influencer marketing is a huge industry, as shown by a survey carried out by the research company Statista. As of 2022, the report pegged the influencer marketing industry in India at more than a whopping 12 billion rupees. It is only expected to burgeon further over the next 5 years at a growth rate of 25%. This would value the Indian influencer marketing market at 28 billion rupees by 2026!
    Value of Influencer Marketing Industry in India from 2021 to 2022, With Projections Until 2026
    Value of Influencer Marketing Industry in India from 2021 to 2022, With Projections Until 2026
    • Flexibility: It not only saves money but also a lot of energy and time for companies. There are no appointments, schedules, or travel itineraries to be coordinated; there are no creative disagreements or personal likes and dislikes to deal with. A virtual influencer’s physicality and emotional feel can be tailor-made to suit the product or service.
    • Risk-free: A virtual influencer will say and do exactly what a brand wants them to, unlike a real influencer, who may have a slip of the tongue or suffer from a bad hair day. In short, companies can breathe easy, as it would mean no controversies that could mar the brand image. For instance, a recent incident highlights the need to exercise caution while hiring influencers. In May, market regulator Securities and Exchange Board of India fined and barred a well-known finfluencer (financial influencer) from trading for over a year and even fined him for flouting investment advisory norms.
    • Conversions: Virtual influencers are still taking baby steps, but the results are slowly but surely yielding. According to Japanese media company Dentsu, which has a team of virtual influencers, there has been a 41% hike in profits by brands using special characters in campaigns. This may sound like music to marketing managers who are constantly tiptoeing on a tight budget. And this is only the tip of the iceberg. In a recent report by Dentsu India’s research division—Recogn and Boomlet Group—the virtual influencer market is expected to “grow rapidly” in the coming years. New technologies and trends, such as virtual reality and artificial intelligence, will enhance the potential and capabilities of virtual influencers.

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    Cons:

    • Orchestrated: One area where real influencers have an advantage over virtual influencers is that the former may have more room to improvise, crack an impromptu joke, or even make those instant, real humane connections. Behind every perfectly-looking post of a virtual influencer is a hardworking team of writers and graphic designers scripting out that perfect content.
    • Lack of Authenticity: A virtual influencer can be a good source of entertainment, but his or her authenticity is questionable when it comes to promoting a brand. The younger generation seems to be more open to the idea of a virtual influencer, while the middle-aged and pre-internet generation may take their time to get convinced about products being endorsed by a non-existent person.
    • Ethically Questionable: There is ambiguity about using virtual influencers to endorse products, especially regarding harmful products. With the use of more technologically advanced software, such as deep fake technologies, there is also a risk of fraud, cyberattacks, and false propaganda. To deal with misleading content and ensure transparency, the Government of India in August released guidelines for celebrities, influencers, and virtual influencers in the field of health and wellness. However, there still remains a vast grey area that is outside any purview or regulation.
    • No Mass Appeal – India is a diverse market, from its culture to socioeconomic strata. Virtual influencers may be effective in targeting a small group i.e. social media users who are active and aware. However, a chunk of India lives outside virtual walls in real-life settings. A virtual influencer may thus find it hard to connect to the masses who face harsh ground realities.

    Conclusion

    If the way forward is virtual, virtual influencers are likely to play a major role in this transition. Facebook’s Mark Zuckerberg once famously said, “Nothing influences people like a recommendation from a trusted friend”. Whether virtual influencers can befriend internet users and earn their trust remains to be seen. For now, it’s best to keep an open mind and an empty slate regarding collaborating with the next generation of influencers on the internet.

    FAQs

    Who are Virtual Influencers?

    Virtual Influencers are a set of computer-generated images or videos created by a team of 3D artists, software engineers, art and creative directors, gaming experts, and content creators. They are pretty much like any animated movie character.

    What do Virtual Influencers do?

    Virtual Influencers are designed to interact with and engage audiences on social media platforms. These digital avatars are completely fictional and are created using technology that includes 3D modeling, animation, and artificial intelligence.

    What are different types of Virtual Influencers?

    There are three main types of virtual influencers: animated humans, non-humans, and life-like CGI humans.

    Why do brands use Virtual Influencers?

    Virtual influencers are designed to establish meaningful connections with their target audience. They offer brands a means to steer clear of controversies, provide flexibility, and serve as a cost-effective marketing solution for small businesses.

  • D2C Brands are Bridging the Gap Between Urban, Semi-urban, and Rural India

    D2C brands are using their unique model to reach consumers in Tier 2 and Tier 3 cities, offering them access to high-quality products and services that were once only available in urban areas.

    In a rapidly evolving business landscape, Direct-to-Consumer (D2C) brands have emerged as pivotal players in the dynamic Indian market. Their role in bridging the divide between urban, semi-urban, and rural regions of India is becoming increasingly prominent. By adopting a direct online sales approach, D2C brands are successfully extending their reach to consumers in smaller towns and cities, where traditional retail outlets may be scarce.

    The significance of D2C brands in India transcends mere commerce; they are poised to revolutionize the consumer landscape in Tier 2 and Tier 3 cities. Their value proposition lies in offering top-notch products and services at competitive price points, granting consumers in these regions the same access to quality offerings that their urban counterparts enjoy.

    Challenges and Opportunities of Catering to Consumers in Tier 2 and Tier 3 Cities in India
    D2C Brands Are Bridging the Gap Between Urban, Semi-urban, and Rural India
    Advice for D2C Brands Looking to Expand Their Reach to Tier 2 and Tier 3 Cities

    Challenges and Opportunities of Catering to Consumers in Tier 2 and Tier 3 Cities in India

    One of the biggest challenges for D2C brands catering to consumers in Tier 2 and Tier 3 cities is the lack of infrastructure. Many of these cities have limited access to reliable internet and transportation, which can make it difficult for consumers to shop online and receive their orders. Additionally, consumers in these cities are often more price-conscious than their urban counterparts.

    Despite these challenges, there are also significant opportunities for D2C brands in Tier 2 and Tier 3 cities. These cities are home to a large and growing population of middle-class consumers who are increasingly interested in shopping online. Additionally, consumers in these cities are often more brand-loyal than urban consumers, once they find a brand that they like.

    Mr. Raghunandan Saraf, Founder and CEO of Saraf Furniture, said, “These regions offer immense potential due to their large populations and increasing disposable incomes. However, there are logistical and infrastructural challenges that can complicate reaching these consumers. These challenges include establishing efficient supply chains, navigating diverse cultural preferences, and addressing limited internet connectivity in some areas.”

    Moreover, he emphasized the significance of localized marketing strategies and after-sales support. He highlighted that despite these challenges, considerable opportunities exist. He drew attention to the fact that Tier 2 and Tier 3 cities are experiencing a surge in aspirational consumers who are actively seeking quality products. He underscored the idea that D2C brands can capitalize on this demand by delivering value-driven propositions and tailoring personalized experiences.

    Ms. Shalvi Govil, Head of E-commerce & Operations of The Indian Garage Co., mentioned the key challenges and opportunities of catering to consumers in Tier 2 and Tier 3 cities in India.

    Challenges

    1. Awareness and Brand Perception: Building brand awareness and establishing a positive perception among consumers in these cities can be challenging.
    2. Price Sensitivity: Consumers in Tier 2 and Tier 3 cities tend to be price-sensitive and have limited purchasing power. 
    3. Distribution and Supply Chain: Setting up an efficient distribution network in these cities can be challenging due to limited infrastructure and connectivity. Maintaining a consistent supply of products to meet demand can also be difficult.
    4. Cultural Diversity: India has diverse regional cultures, and brands need to understand the preferences and tastes of consumers in different cities. They may need to adapt their product offerings to suit local preferences.

    Opportunities

    1. Growing Middle Class: Tier 2 and Tier 3 cities in India have a rapidly expanding middle-class population with increasing disposable income. 
    2. Untapped Market Potential: Many Tier 2 and Tier 3 cities in India are relatively untapped by fashion brands, offering a first-mover advantage and the opportunity to establish market dominance.
    3. Rising Urbanization and Changing Lifestyles: As urbanization increases in these cities, there is a shift in consumer lifestyles and preferences. This presents an opportunity for fast fashion brands to cater to the fashion-conscious urban population.
    4. Digital Penetration: With the rise of internet penetration and smartphone usage in Tier 2 and Tier 3 cities, e-commerce platforms provide a cost-effective way for a brand to reach a broader consumer base and overcome distribution challenges.
    5. Localization and Customization: Brands can leverage the cultural diversity of these cities by offering localized products that align with regional tastes and preferences. Customization options can also enhance the brand’s appeal and cater to individual consumer choices.

    “Overall, while there are challenges, fast fashion brands like The Indian Garage Co., catering to consumers in Tier 2 and Tier 3 cities in India can benefit from the growing market potential, changing lifestyles, and the availability of digital platforms,” she added.

    D2C Brands Are Bridging the Gap Between Urban, Semi-urban, and Rural India

    D2C brands are using a variety of strategies to bridge the gap between urban, semi-urban, and rural India. One common strategy is to offer regional language support. This makes it easier for consumers in non-urban areas to shop online and understand the product information. Additionally, many D2C brands are partnering with local retailers to offer offline sales and customer support. This helps to reach consumers who may not be comfortable shopping online or who do not have access to reliable internet.

    Mr. Saraf said, “At Saraf Furniturе, we see our D2C brand as a bridgе that connеcts urban, sеmi-urban, and rural India. One of our kеy stratеgiеs is to leverage thе digital rеvolution in India, making our products еasily accessible onlinе. Wе hаvе invested in user-friendly websites and mobilе apps that catеr to a widе rangе of consumеrs, including thosе with limitеd intеrnеt connеctivity. Furthermore, we offer a divеrsе product rangе that catеrs to various tastеs and prеfеrеncеs, еnsuring that our furniturе appеals to both urban and rural sеnsibilitiеs. Additionally, we have established rеgional warеhousing and fulfillmеnt cеntеrs to еxpеditе dеlivеriеs to Tiеr 2 and Tiеr 3 citiеs, еnsuring a sеamlеss customеr еxpеriеncе. Our customеr support tеams arе trainеd to addrеss local concerns and prеfеrеncеs, fostеring trust and loyalty among our customеrs in thеsе rеgions.”

    Similarly, Ms. Govil also mentioned that they have a comprehensive approach that involves tailoring products to match local tastes, ensuring affordability for price-sensitive consumers in semi-urban and rural areas. Additionally, there are offline touchpoints established through our collaboration with Fashion Factory, and our digital presence spans our e-commerce website and partnerships with local online marketplaces.

    Advice for D2C Brands Looking to Expand Their Reach to Tier 2 and Tier 3 Cities

    For D2C brands that are looking to expand their reach to Tier 2 and Tier 3 cities, it is important to understand the unique needs and preferences of consumers in these markets. It is also important to invest in regional language support and offline sales channels. Additionally, D2C brands should focus on building trust with consumers in these markets by offering high-quality products and services at competitive prices.

    Mr. Saraf also advised D2C brands targeting Tier 2 and Tier 3 cities that are looking to expand their reach.

    1. Invest in understanding thе local markеt dynamics, including consumеr behavior, prеfеrеncеs, and spеnding pattеrns. This knowledge will bе instrumеntal in tailoring your product offеrings and markеting stratеgiеs to rеsonatе with thе targеt audiеncе.
    2. Focus on building a robust and еfficiеnt supply chain network. Timеly and rеliablе dеlivеriеs arе crucial for gaining the trust of customers in thеsе rеgions. Collaborating with local logistics partnеrs can oftеn bе a wisе choicе. 
    3. Invеst in customеr еducation and support. Many consumеrs in Tiеr 2 and Tiеr 3 citiеs may bе nеw to onlinе shopping, so providing clеar guidancе on how to placе ordеrs and accеss aftеr-salеs support is еssеntial. Building trust through еxcеllеnt customеr sеrvicе is kеy to long-tеrm succеss.
    4. Bе patiеnt and adaptablе. Expanding into thеsе rеgions may takе timе, and thеrе may bе unforеsееn challеngеs. Adaptability and a willingness to itеratе on your stratеgiеs arе critical for succеss in this divеrsе and promising markеt. With the right approach and a commitmеnt to understanding and sеrving thе uniquе nееds of consumеrs in Tiеr 2 and Tiеr 3 citiеs, D2C brands can unlock significant growth opportunities in India’s hinterlands.

    With the right approach and commitment to understanding and serving the unique needs of consumers in Tier 2 and Tier 3 cities, D2C brands can unlock significant growth opportunities in India’s hinterlands.

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  • Uttar Pradesh to Play Big Role to Make India 3rd Largest Economy by 2030

    Uttar Pradesh with an aim of becoming a $1 trillion economy is currently the fastest growing state-economy in the country. Investors in Uttar Pradesh are bridging credit gaps in the thriving MSME sector. The state will play a big role in making India the third-largest economy in the world.

    Uttar Pradesh is leading the growth of the Indian MSME sector with the highest number of MSMEs in India. The largest and most populous state boasts more than 96 lakh MSMEs, making the state one of the fastest-growing state-level economies in the country.

    President Draupadi Murmu, in her address at the inauguration of the first UP International Trade Show, stated that over 200 manufacturers from the state were displaying their products to more than 400 buyers from a total of 66 countries. The event provided a platform for local manufacturers and small businesses to showcase their products in the national and international markets.

    The President also mentioned that Uttar Pradesh, despite being a landlocked state, has experienced remarkable growth in exports, with the value increasing from around Rs 88,000 crore in 2017-18 to Rs 1,75,000 crore in 2022-23. She attributed this growth to the proactive steps taken by the state government to promote economic growth and attract investments.

    “Uttar Pradesh is now among the fastest growing state-level economies in the country due to simplification of the investment process, ease of doing business and acceleration in infrastructure development,” said Murmu.

    In the same event, Union Minister Narayan Rane stated that India is expected to become the third largest economy by 2030 and UP is going to play a major role in it. He also emphasized the necessity of enhancing citizens’ per capita income to address migration, underscoring the state’s goal of reaching a $1 trillion economy. He also highlighted the per capita income disparities between the United States and India to underscore the importance of economic growth in improving people’s quality of life. Using the instance of industrialization in his home state of Maharashtra, Rane pointed out that comprehensive research and analysis are vital to determine the suitable industries and their optimal locations within various areas or districts.

    Key Sectors for Investment in Uttar Pradesh
    Advice to MSMEs Attracting Investment in Uttar Pradesh

    Key Sectors for Investment in Uttar Pradesh

    Mr. Amit Tyagi, CEO, PayWorld highlighted key sectors that offer the most investment in Uttar Pradesh:

    1. Financial Inclusion: Uttar Pradesh, a populous state with a significant number of underserved population segments, is poised for improved financial inclusion. Fintech companies have a crucial role to play in achieving this by providing innovative and affordable financial products and services tailored to these segments.
    2. Agriculture: As a major agricultural hub in India, Uttar Pradesh offers substantial opportunities for fintech companies to revolutionize the agricultural sector. Fintech solutions, including crop insurance, agricultural financing, and supply chain management, can greatly benefit farmers and other stakeholders.
    3. Small Businesses: Uttar Pradesh is home to a multitude of small businesses, presenting fintech companies with the opportunity to offer a range of services. These services encompass digital payments, accounting software, and access to business loans, supporting the growth and success of these enterprises.

    The Uttar Pradesh government is actively promoting digital payments and fintech solutions, leading to an increasing demand for these services. Fintech companies can address this demand by providing solutions for government-to-citizen payments, tax processing, and subsidy distribution.

    Nevertheless, Indian MSMEs have faced a significant challenge in the form of limited access to credit within the market. To address this issue, both government agencies and non-governmental funding institutions throughout the country have made concerted efforts to facilitate easier access to capital.

    Mr Ameet Venkeshwar, CBO, LoanTap Financial Technologies, said that bridging the credit gap for MSMEs requires a combination of innovative products, customer-centric solutions, and collaboration between various financial institutions and businesses. Other than providing MSMEs loans, he said, “We have our own product called AfterPay Merchant by LoanTap, a dedicated credit solution for MSMEs tailored to accelerate business growth.”

    “We partner with large retailers to assist MSMEs, particularly small retail stores, in gaining easy access to funds through a revolving credit line. This support allows them to benefit from extended payment terms, bolstered working capital, and ensures a stable supply. Mostly the small retailers and Kirana stores are often underserved and this allows us to serve them moving more towards our vision of financial inclusion,” Mr Venkeshwar added.

    Mr Tyagi of PayWorld emphasized, “Our extensive network of merchant points provides MSMEs access to digital financial services, empowering them with digital payments, bank accounts, and e-wallets. Collaborations with financial institutions enable us to offer tailored micro-loans, addressing capital needs for UP’s MSMEs.”

    He stated that they are committed to innovation and the development of digital platforms. He mentioned that tailored products and financial awareness campaigns played a significant role in enhancing their commitment to UP’s economic growth. In a landscape where MSMEs sought credit solutions, Mr. Tyagi believed that PayWorld’s extensive reach and unwavering dedication to digital financial services could be transformative, propelling MSMEs toward prosperity and contributing significantly to the state’s development.

    Advice to MSMEs Attracting Investment in Uttar Pradesh

    Uttar Pradesh boasts a vibrant and flourishing MSME sector, which serves as the cornerstone of the state’s economy. These small and medium-sized enterprises contribute significantly to its GDP and generate millions of jobs. For MSMEs in Uttar Pradesh looking to invest in their growth, several key opportunities exist.

    1. Government Initiatives: To support MSMEs in the state, the state government has initiated various programs, including the One District One Product (ODOP) scheme and the Nivesh Mitra portal. These schemes offer financial and technical assistance to MSMEs, streamlining the process of raising investments and saving both time and money.
    2. PM Vishwakarma Yojana Scheme: The Pradhan Mantri Vishwakarma Kaushal Samman Yojana, a central government initiative, provides skill training to traditional artisans and craftsmen. MSMEs in Uttar Pradesh can leverage this scheme to train their employees, enhancing productivity and making their businesses more appealing to potential investors.
    3. Targeting the Export Market: The export market presents numerous opportunities for the state’s MSMEs, with the government actively promoting exports from the state. By tapping into government support and the growing export sector, MSMEs in UP can expand their operations and attract increased investment.
    4. Leveraging Fintech: Uttar Pradesh’s MSMEs can harness fintech solutions to attract investment and facilitate business growth. They can utilize online crowdfunding platforms to raise capital from a wide investor base. Furthermore, fintech platforms can automate accounting and financial reporting processes, enhancing their appeal to potential investors. Collaborating with fintech companies to develop innovative financial products and services is another avenue through which MSMEs in UP can pique investor interest.

    Mr. Venkeshwar also acknowledged that attracting investment can pose a challenge, but it is an attainable goal when the right strategy and approach are in place. Furthermore, with the sector’s growth on the rise, the outlook appears promising, particularly with new initiatives such as financial inclusion aimed at assisting the underserved sector in India.

    Union Minister Narayan Rane also mentioned that there are approximately 9.5 million MSMEs in the state, and when considering the entire country, there are around 63 million functional MSMEs. He stated that through the MSME sector in Uttar Pradesh, small businessmen and farmers have been finding employment opportunities, and they have been significant contributors to India’s growing economy.

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  • India’s Health-Tech Market to Reach $25 Billion by 2025

    The remarkable growth in internet penetration and smartphone usage along with telemedicine, online pharmacies, Electronic Health Records (EHRs), health and fitness applications, and wearable devices have made healthcare more accessible, convenient, and patient-centric than ever before.

    India’s health tech market is projected to reach $25 billion by 2025. Especially post-COVID, the growth has seen unprecedented heights. Though the surge in health tech in India has been fueled by the pandemic, it is actually a series of developments that have paved the way for this surge.

    The growing and aging Indian population has been propelling the surge in demand for healthcare services. Though India has the highest youth population in the world, the growing number of elderly citizens has heightened the need for healthcare services across the board. The increasing healthcare costs in India have made quality healthcare inaccessible to many. This financial strain has created an environment ripe for cost-effective health tech solutions.

    Technological Transformation in Healthcare
    Key Factors Driving Health-Tech Growth
    Ongoing Challenges in Health-Tech

    Technological Transformation in Healthcare

    The remarkable growth in internet penetration and smartphone usage has democratized access to health tech services, making them easily accessible even to the users of Tier 2, Tier 3 cities, and small towns. Telemedicine, along with internet-based features like online pharmacies, Electronic Health Records (EHRs), health and fitness applications, and wearable devices like smartwatches and ECG monitors, have made healthcare more accessible, convenient, and patient-centric than ever before.

    Mr. Amol R Deshmukh, CEO and Founder of MedRabbits, said, “Healthcare and technology have typically featured at opposite ends of the spectrum. Doctors, patients, and the entire healthcare ecosystem were either not willing or not able to adopt technology readily like the other industries. Come the pandemic – everything changed. While doctors and hospitals became inaccessible due to the fear of the virus, technology came to the forefront and coerced patients, doctors, and hospitals to adapt.”

    Mr. Deshmukh also mentioned that following that period, all participants within the ecosystem became at ease with the utilization of technology. Consequently, patients, doctors, and hospitals presently perceive greater advantages in employing technology to meet their healthcare needs and provide services.

    Key Factors Driving Health-Tech Growth

    Mr. Gautam Chopra, Founder and CEO of BeatO, pointed out three key factors that have significantly contributed to the growth of health-tech in India:

    1. Increased Personal Health Awareness: The pandemic has made individuals more conscious and aware of their health. This heightened awareness has resulted in the adoption of health-tracking devices and virtual healthcare consultations especially for non-communicable diseases and chronic conditions like diabetes, hypertension etc.
    2. Greater Tech Exposure Among Healthcare Providers: Hospitals and healthcare professionals have become more tech-savvy, making it easier for health-tech startups to integrate their solutions into the healthcare ecosystem. The familiarity with technologies among doctors and other medical personnel at the secondary and tertiary healthcare levels has lowered barriers to adopting digital tools.
    3. Collaborations with Ecosystem Partners: Ecosystem players like insurance and pharmaceutical companies have ventured into partnerships with health-tech startups. These collaborations have resulted in mutually beneficial outcomes, fostering greater confidence among the ecosystem players. This synergy accelerates the growth of startups by providing access to wider distribution channels and lower costs for the users.

    Ongoing Challenges in Health-Tech

    Mr. Anuj Parekh, Founder & CEO of Bharatsure, shared that health-tech, in India, has definitely experienced massive development in a limited timeframe, but keeping the size of the whole market in mind, the industry is still in its early stages of growth. “Though it has the potential to revolutionize the healthcare system, there are a number of factors that poise as challenges such as government regulation, data privacy, and rural healthcare access,” he added.

    Mr. Parekh also mentioned that India still faces challenges in access to medical professionals, especially on the rural front. While health techs are making it possible to provide healthcare for rural population through telemedicine, the shortage still persists.

    “An increase in the number of medical professionals will help address this and there needs to be talk around human resource development. With the emergence of AI, medical professionals could also be using sophisticated models to create efficiencies in the system. Data exchange and interoperability of systems is still a big issue for health techs. While the national health stack is a step in the right direction, it is a very big challenge to implement primarily with challenges around data security and privacy,” he added.

    The full-scale implementation of the stack is still some time away and health techs will not meet their full potential unless the stack is implemented. Fintech too would not be at its current glory without the support of Aadhaar and UPI.

    Mr. Chopra said that health-tech companies must adopt a patient-centric approach due to the prevalent practice of consumers paying for healthcare from their own pockets.

    He said, “A patient-centric approach necessitates the establishment of trust and credibility, primarily through the demonstration of robust health outcomes. It is essential to recognize that building this trust is a gradual process, requiring patience and perseverance. The ultimate goal should be to provide high-quality care that surpasses the experiences one might have in the physical healthcare system while maintaining affordability at the same time.”

    A patient-centric approach necessitates the establishment of trust and credibility, primarily through the demonstration of robust health outcomes. It is essential to recognize that building this trust is a gradual process, requiring patience and perseverance. The ultimate goal should be to provide high-quality care that surpasses the experiences one might have in the physical healthcare system while maintaining affordability at the same time.

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  • India Still Lacks in Women Entrepreneurs Despite Economic Progress

    India ranks 71 out of 154 countries in terms of female entrepreneurial activity. IMF suggests a 5% boost in global GDP with increasing women’s participation in entrepreneurship.

    India, the land where Goddesses are regarded as mothers, where women are regarded as sisters, where traditions and diversity weave a rich tapestry of culture and respect, where ancient wisdom and modern aspirations converge to shape a vibrant and ever-evolving nation, also where women are faced with traditional and contemporary challenges yet working together to rewrite the narrative of their empowerment and equality.

    Mostly, across India, women are ridiculed as the ‘home minister’, a term which men have curated to glorify the efforts of their female counterparts at home but might have forgotten to dignify their roles and contributions in the broader society, in the workplace.

    Gender Disparities in Entrepreneurship: A Stark Reality
    The Funding Challenge
    Strategies for Women Entrepreneurs

    Gender Disparities in Entrepreneurship: A Stark Reality

    According to the Global Entrepreneurship Monitor (GEM) 2022/2023 report, India ranks 71 out of 154 countries in terms of female entrepreneurial activity. This means that only 16.1% of women in India are engaged in entrepreneurial activity, compared to 24.6% of men. Also, the Sixth Economic Census of India, conducted in 2014, found that just 13.76% of businesses in India were owned by women.

    Dr. Rabiaah Bhatia, Founder, eD WebStudio Channel, admitted that India’s growth story is an incredible one, “but the unfortunate truth is that it has left behind a key demographic component: women”. She shared that societal beliefs and cultural norms are major stumbling blocks for women.

    “Women are assumed to be primary caregivers, making professional work, especially outside the home, secondary. It is far from easy to juggle running a household and a business at the same time, even if domestic workers are brought into the picture. Moreover, social permission to work is often tough to obtain due to cultural practices and safety considerations. Together, this leads to reduced mobility, and in turn, reduced likelihood of becoming successful startup founders,” Dr. Bhatia added.

    She also stated that, although there is a wind of change blowing today with women-led unicorns, still there is a lack of inspirational role models in terms of successful women-led businesses, making it difficult for them to visualize what success looks like.

    The Funding Challenge

    A 2022 study by the World Bank found that women entrepreneurs in India are more likely to be denied access to loans than male entrepreneurs. The study also found that women entrepreneurs who are able to secure loans tend to pay higher interest rates than male entrepreneurs.

    Nirupama VG, Founder, AdAstra Consultants, said, “Fundraising, inherently a daunting endeavor, often presents challenges for female entrepreneurs in India. The World Economic Forum study tells some numbers: Female entrepreneurs secured 5.2% of the outstanding credit offered by Indian public sector banks. Even more, only 0.3% of India’s venture capital funding was allocated to women-led startups in 2021, leading to an unmet credit gap exceeding $11.4 billion for women-led businesses.”

    Another study by the International Labour Organization in 2021 found that women entrepreneurs in India are more likely to face gender stereotypes and discrimination than male entrepreneurs. The study reflected that women entrepreneurs are often stereotyped as being less capable than men entrepreneurs and are less likely to be taken seriously by investors and customers.

    Nirupama expressed that being a woman entrepreneur is a journey of confronting multifaceted challenges. “While it’s tough to pin down the ‘biggest’ challenge, what stands out is the pressure to reconcile traditional gender roles with the demands of a growing business,” she added.

    The Indian entrepreneurial ecosystem, although rapidly evolving, still retains remnants of a mindset that is less welcoming to women. Sectors that are perceived as ‘women-friendly’ are limited, and the lack of institutional and societal support intensifies the challenge.

    Also, in 2020, a report from the Global Entrepreneurship Monitor underscored the significant disparity in access to support networks and mentorship between female and male entrepreneurs in India. Female entrepreneurs, it revealed, frequently experience isolation and a lack of the vital support systems that are crucial for success.

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    Strategies for Women Entrepreneurs

    Dr. Malini Saba, a multifaceted entrepreneur and philanthropist, and Founder and Chairman of Anannke Foundation mentioned that a multi-pronged strategy is required to address this issue, including cultural attitude changes, laws supporting gender equality, and programmes that give women access to education, mentorship, and financial support.

    Based on her experience as a businesswoman, psychologist, and advocate for women and girls, Dr. Saba recommended aspiring women entrepreneurs to:

    1. Have Self-assurance: Have confidence in your abilities and objectives. Self-assurance is crucial for overcoming obstacles and persevering in the face of difficulties.
    2. Keep Upgrading: Invest in obtaining the education and training you need to become an expert in your chosen area. Success is attainable through ongoing learning.
    3. Establish a Support System: Surround yourself with mentors and advisors who can guide you toward success. Find other female business owners who can inspire you and provide advice.
    4. Develop Resilience: Failures and setbacks are common when starting a business. Develop resiliency and the ability to learn from these experiences.
    5. Gender Stereotypes: Challenge gender stereotypes and resist letting society’s expectations dictate your career. Push boundaries and challenge gender preconceptions in your chosen field.
    6. Financial Literacy: Have a good understanding of your company’s finances. This includes creating a budget, making financial plans, and, if required, obtaining funds.
    7. Well-being: Strive for a healthy work-life balance and practice self-care. Maintaining one’s physical and emotional well-being requires practicing self-care.
    8. Promote Gender Equality: Promote gender equality in your field and neighborhood. Make use of your platform to uplift and encourage other women.
    9. Adapt and Innovate: In the fast-paced corporate environment, innovation, and the capacity to adapt are essential. Observe industry trends and remain receptive to fresh concepts.
    10. Give Back: As you achieve success, think about supporting efforts that empower other women and girls or giving back to your community.

    Nonetheless, as Nirupama stated, it is not just about securing a seat at the table; it is often about advocating for one’s worth in an ecosystem that often undervalues the perspectives and potential of women entrepreneurs. Such disparities are not just statistics; they narrate stories of perseverance, adaptability, and determination of women who’ve succeeded against the odds. We must champion a shift that goes beyond acknowledging these disparities, prioritizing inclusion, and equitable support for such leaders.

    Jaya Mehrotra, Founder of Women Leadership Circle, stated that as we witness a shift towards greater diversity and inclusion, women need to actively seize these opportunities. She also mentioned that networking plays a pivotal role in this journey. Building connections with successful entrepreneurs, both men and women, can provide invaluable guidance, open doors to partnerships, and foster collaborations.

    Furthermore, a study by the International Monetary Fund suggests that there can be a 5% boost in the global GDP with the increasing participation of women in entrepreneurship. However, the road to achieving gender equality in entrepreneurship in India is undoubtedly a challenging one. Despite the rich cultural heritage and the strength of Indian women, there are systemic and societal barriers that continue to impede their progress in the entrepreneurial space.

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  • Consumer Demand Surge: Indian Businesses Gear Up for the Festive Season

    Businesses are excited to meet surging consumer demand and capitalize on increased spending. They are implementing efficient supply chain strategies to meet the extra demand.

    As India’s festive season approaches, businesses are gearing up to meet the surging consumer demand. From the illuminating Diwali lights to the joyous Eid celebrations, this period is not only culturally significant but also a pivotal time for businesses to capitalize on increased consumer spending. The season comes with its own unique set of challenges and opportunities, making it an exciting time for retailers and marketers alike.

    Mr. Sumit Garg, Co-Founder and Managing Director, of Luxury Ride, expressed the excitement among buyers and their willingness to increase spending during the festive period. He said that the festive season is set to arrive in full swing, and it is stirring a lot of excitement among the buyers. They have been awaiting the festive period for a very long time, and they are willing to raise their spending to purchase the product they have been eyeing for a very long time.

    He also mentioned that similar sentiments have been witnessed even in the pre-owned luxury car segment, and Luxury Ride is curating a comprehensive collection of cars that offer the best value for money, based on an understanding of consumer behavior and demands.

    “Preparing for the festive season, we are already in the process of organizing an inventory that flaunts a wide range of options in terms of diversity in car models, price range, or showcasing vehicles from different segments under a single roof. By maintaining more than 75+ cars in the inventory at a given point in time, we aspire to make shopping a hassle-free experience for customers by allowing them to choose from a wide range of options in terms of price and variety that are available at the same place. The extensive collection will enable them to select from a variety of cars in the segments of sedans and SUVs ranging from Rs 20 Lakhs to Rs 1.25 Crore,” Mr Garg added.

    Regional and Demographic Insights
    How Festive Season Spending Differs in India by Region and Demographics
    Transaction Size Variations During Festive Season
    Fostering Connections Beyond Sales

    Regional and Demographic Insights

    The festive season is when most Indians spend money on gifts. While speaking with Abhishek Vyas, Founder of SBMV Gift Shop, he highlighted regional and demographic variations in spending patterns during the festive season. He said, “At SBMV, we are offering a wide range of high-quality gifts at competitive prices, plus promotions and discounts throughout the season. We are well-positioned to capitalize on the growth of the Indian gift shop industry.”

    He also shared that the spending pattern varies across different regions of India and among different demographic groups depending on the festival. While people in northern India tend to spend more on Diwali, people in the southern part, especially in Kerala, tend to spend more on Onam. Similarly, younger people are more likely to spend money on experiences and gifts that give back, while older people are more likely to spend money on traditional gifts.

    To capitalize on the increased consumer spending during the festive season, Mr. Gurpreet Singh, Director of River of Design (ROD) said that they have a multifaceted strategy in place. “We recognize the importance of offering exclusive and innovative designs that resonate with Gen Z, our primary target audience. Our commitment to delivering cutting-edge style and design ensures that we remain at the forefront of fashion during this crucial period. We will introduce special festive collections that cater specifically to the tastes and preferences of our Gen Z customers, ensuring that our products are not just fashionable but also affordable.”

    Additionally, he mentioned that ROD would collaborate with leading brands to create exclusive lines available only on platforms like Myntra and Flipkart. These collaborations not only would boost their visibility but also would align them with established names in the fashion industry, attracting a wider customer base. He also shared that the latest trend in this festive season spending reflects a growing emphasis on sustainability and innovation in fashion for which they have developed unique blends of yarn with eco-friendly indigo dyes.

    How Festive Season Spending Differs in India by Region and Demographics

    Mr. Nitish Rai, Co-founder and CEO of Freightfox, said, “The country saw over 19% increase in GST collections in August 2023 over August 2022. The highest contributions came in from Bihar (27.25%) followed by West Bengal (24.5%) and UP (18.52%). Most of our customers saw a 10-12% increase in demand at the onset of the festive season in August, which is expected to further rise in September and October before we start seeing a decline.”

    The difference in average transaction value or basket size between the festive season and non-festive season in the gifting industry can vary depending on several factors, including the specific type of gifts, consumer behavior, and the strategies employed by retailers. Mr Vyas of SBMV Gift Shop said that during the festive season, especially leading up to major holidays such as Christmas, Hanukkah, Diwali, Eid, and others, the average transaction value or basket size tends to be higher compared to the non-festive season.

    Transaction Size Variations During Festive Season

    Businesses are implementing efficient supply chain strategies to meet the increased demand, ensuring that their products are readily available to their customers. Mr. Singh of ROD said, “As part of our expansion plans, we are targeting Tier II and Tier III cities where 70-75% of our orders originate. This expansion will further strengthen our presence in these regions and enhance our ability to meet the diverse market demands during the festive season.”

    Mr. Rai, of Freightfox, emphasized their commitment to empowering manufacturing enterprises with actionable insights on Scope3 emissions from the transportation and distribution value chains. Their Logistics Emissions Abatement Platform (LEAP) aims to help customers account for their logistics emissions and encourage the use of greener fleets in transportation networks. For Freightfox, it’s not just about making profits during the festive season; it’s also about making a tangible difference in minimizing their environmental footprint and contributing positively to the community and the environment as a whole.

    Fostering Connections Beyond Sales

    Ms. Akanksha Sharma, Co-founder and CEO of CITTA, emphasized the importance of fostering connections and respecting customers’ faith and traditions. She believes that the moments of cultural significance are not merely occasions to exchange gifts and pleasantries; they are an opportunity for brands to embrace the spirit of togetherness and innovation.

    She said, “The festive season is not just an opportunity to boost sales; it’s a chance to foster connections. We understand that festivals are deeply rooted in people’s lives, and we approach this season with the utmost respect for our customers’ faith, beliefs, and traditions. As a brand rooted in Indian traditions and backed by modern science, we take pride in being part of this tapestry. Our commitment is not only to pamper the delicate skin of babies and provide convenience to modern parents but also to celebrate the cultural richness of India, where ancient traditions harmoniously meet modern science.”

    Ms. Neha Mohanty, Founder of StarFishGlobal Communications LLP, said, “Giving gifts to those in need is how I give back to the community. Instead of exchanging gifts among ourselves, if we can simply give a portion of it to people in need, it will make a significant difference in their lives.”

    She emphasized the importance of coming together during the holiday season to purchase necessities like warm clothing, blankets, and toiletries, which can then be distributed to those in need within the community. She shared that this is a tradition she personally follows every year and encouraged everyone to consider it as it adds depth and meaning to the festive season and enables individuals to contribute meaningfully to their community. Neha suggested that giving back during the holidays provides a genuine experience of the holiday spirit.

    With a growing emphasis on sustainability and innovation, businesses are not only preparing for increased consumer spending but are also actively engaging in eco-friendly initiatives. Collaborations with leading brands and a focus on sustainability are poised to shape this year’s festive season.

    Moreover, logistics and supply chain expansion into Tier II and Tier III cities is pivotal in meeting diverse market demands during this festive period. It is clear that businesses are not only preparing for sales but also actively engaging with their customers to make this festive season truly special.

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  • Government Policies Lead Indian Startups to Thrive

    The government of India’s various initiatives and policies facilitate the growth of startups in India. Experts believe that government policies have made accessing capital easier.

    India is now a booming economy for startups to prosper. Much of the credit goes to the Government of India for taking suitable initiatives to make the country a safe home for Indian startups to thrive. The recently concluded G20 summit has promised to facilitate global collaboration and raise a whopping $1 trillion by 2030, hence, Indian startups can see the Sun shining bright for long enough to give them the space and time to “frost themselves”’.

    It doesn’t matter which sector your business is catering to, whether it’s fintech, SaaS, or prop-tech; government initiatives serve businesses as a whole. This provides them with the opportunity to grow and meet the needs of not only people in the metros but also those in Tier 2, Tier 3 cities, and smaller towns.

    Kanika Bali, Partner, Optimyze Finance LLP, stated that India’s startup ecosystem has been on an unprecedented growth trajectory, establishing itself as the third-largest startup hub globally. With over 99,000 DPIIT-recognized startups spread across 670 districts as of May 2023, India’s prowess in innovation and entrepreneurship is undeniable. This remarkable achievement is not confined to a single sector, with startups emerging in 56 diverse industrial sectors, showcasing the nation’s versatility and dynamism.

    Ms. Bali also added that one of the standout achievements of government policies is the exponential growth in funding, reflecting investor confidence in India’s startups. Over the period from 2015 to 2022, there has been a staggering 15-fold increase in total startup funding. This infusion of capital has catalyzed innovation, enabling startups to scale and address critical challenges across various sectors.

    Jitender Ahlawat, Founder and Managing Partner, of HJA & Associates, said, “The legal environment for businesses has been greatly simplified thanks in part to the ‘Startup India’ program, which was introduced in 2016. It provides tax breaks for three consecutive financial years out of its first ten years since inception in order to lessen the financial strain on new startups and increase their appeal to investors. The program also makes it simpler for businesses to get cash by facilitating access to funds through programs like the Fund of Funds for Businesses (FoF) and credit guarantee schemes.”

    StartupTalky interacted with entrepreneurs and experts from a range of industries and the government has been praised for its various startup-friendly initiatives and policies.

    Prop-tech
    Hardware-tech
    Fashion
    Lending-tech
    SaaS
    Fintech
    Recommendations to the Government

    Prop-tech

    Mr. Saurabh Vohara, Founder and CEO, of ALYF, praised the government initiatives like Startup India and Digital India as these initiatives have given investors the trust and confidence to invest in startups.

    He said, “The government’s supportive policies have been instrumental in ALYF’s journey to democratize holiday home ownership in India. Initiatives like Startup India and Digital India have given investors trust and confidence to back startups like us who are trying to solve real estate challenges through technology and AI. We believe that further enhancements to government policies including tax incentives, streamlined approvals for new project launches, and joint research initiatives will definitely continue to foster innovation and drive economic growth in the real estate startup sector.”

    Dr. Nikhil Sikri, CEO and Co-founder, Zolostays, said, “The government’s decision to implement 12% GST on PG and student housing for rates less than Rs 1,000 per night and 18% for others is a progressive move that promises to bring greater clarity and efficiency. We strongly believe that this step has enhanced compliance, reduced the prevalence of unscrupulous practices, and ultimately resulted in a more sustainable co-living and student housing ecosystem.”

    Moreover, he also mentioned that the government initiatives in research and startup incubation serve as the cornerstone of informed decision-making in the real estate sector. Through rigorous analysis and data-driven insights, the government has steered the course of housing policies, urban planning, and market regulations, ensuring affordability, sustainability, and economic stability. These initiatives have fostered equitable housing solutions.“We are committed to offer our patrons with high-quality, affordable co-living accommodations, and we are positive about the government regulations that will aid to further enhance an organized ecosystem,” Dr. Sikri added.

    Hardware-tech

    Pramod Kathuria, Founder and CEO, of Easiloan, mentioned that there needs to be a balance between support and oversight. He said, “To boost startup growth in India, government policies should focus on enhancing funding accessibility through grants and tax incentives, simplifying regulations, and promoting education and research. Favorable international trade agreements and entrepreneur-friendly visas should also be prioritized for global expansion. Striking a balance between support and oversight is key.”

    Fashion

    Ms.Varija Bajaj, Founder of Office & You, Lela, and Varija Design Studios, shares that the support provided by organizations like Startup India and Invest India has been truly remarkable. They have gone above and beyond in their efforts. The incentives for startups, the invaluable mentorship, and guidance on investments have been nothing short of brilliant.

    “I believe these initiatives have led to the establishment of numerous incubation centers and have transformed the mindset of individuals who previously might not have considered investing in startups,” she added.

    Lending-tech

    Mr. Bhavik Vasa, Founder and CEO, of GetVantage, while talking about the credit deficit in the Indian SME sector mentioned that the recent government allocation announced in the Budget 2023 would foster the growth of small businesses.

    He said, “In recent budget sessions, the government has allocated substantial capital for priority sector lending and introduced corporate guarantee schemes to fuel the growth of small businesses. There is a strong awareness of the need to support these sectors to achieve the goal of becoming a $5 trillion economy. This involves identifying the importance of these sectors at the government and Finance Ministry levels, along with the active participation of industry players. The government’s efforts are aligning well with the growing importance of small businesses and startups in India, and there is a significant amount of capital earmarked for these sectors.”

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    SaaS

    Mr. Rajarshi Bhattacharyya, Chairman and Managing Director of ProcessIT Global, said. “If your startup is performing well for three years, you become eligible for tax exemptions. It can hardly get better than this. The ecosystem is designed to support your growth. The government, in collaboration with organizations like NASSCOM, organizes various mentorship programs under the Startup India initiative, providing people with invaluable guidance and support.”

    He also mentioned that among the top 15 cities globally for startups, three of them are in India – Bangalore, Mumbai, and Delhi NCR. This is a testament to the encouragement the government provides for individuals to become entrepreneurs, break free from mundane jobs, and pursue innovative ideas. Access to funding is available, and Indians are known for their brilliant minds. Mr Bhattacharyya also added that the policies have been established to enable startup companies to participate in large government tenders without needing to provide Earnest Money Deposits (EMDs). Membership in the Startup India scheme takes care of your credentials, eliminating the need for Pre-Qualification (PQ) criteria.

    Fintech

    However, in order to further boost startup growth in India, Ajit Thomas, Co-founder and CMO, of Cavli Wireless, said that the government should streamline regulatory processes, making it easier for startups to register and operate.

    “Reducing bureaucratic red tape can expedite business launches. Additionally, tax incentives for early-stage startups can alleviate financial pressures. Enhancing digital infrastructure, especially in Tier-2 and Tier-3 cities, will democratize entrepreneurial opportunities. Lastly, fostering stronger academia-industry linkages can spur innovation, while dedicated startup hubs can facilitate mentorship and networking. These changes can create a more conducive environment for startups to thrive and innovate,” he added.

    Ms. Bali said, “One of the standout achievements is the exponential growth in funding, reflecting investor confidence in India’s startups. Over the period from 2015 to 2022, there has been a staggering 15-fold increase in total startup funding. This infusion of capital has catalyzed innovation, enabling startups to scale and address critical challenges across various sectors.”

    “The startup landscape in India has become synonymous with innovation, disruption, and boundless potential. The Indian government has paved the way for startups to thrive. These schemes provide financial support, access to resources, and opportunities for growth,” she added.

    Recommendations to the Government

    However, Mr. Ahlawat highlighted some specific changes to the government policies to boost the growth of startups. These include simplifying business registration processes, expanding tax incentives, improving access to finance, enhancing intellectual property protection, expanding research and development grants, investing in education and training, expanding startup incubators and accelerators, facilitating government procurement, extending support programs for SMEs, forming international collaboration partnerships, ensuring regulatory clarity, developing comprehensive data privacy regulations, introducing incentives for startups focusing on sustainability and green technologies, facilitating exit strategies, and expanding e-governance initiatives.

    Garima Mitra, Co-Founder, of Treelife, also reminded that it is essential that India continues to streamline regulatory processes, improve access to capital, and enhance its education system to fully harness its innovation potential and sustain long-term economic growth.

    As we look ahead, it is imperative for the government to continue its proactive approach, streamlining regulations, enhancing infrastructure, and strengthening academia-industry collaborations to ensure that the Indian startup landscape continues to shine brightly on the global stage. The future indeed holds boundless possibilities for innovation, growth, and economic prosperity in India’s startup ecosystem.

  • India’s Digital Personal Data Protection Act, 2023: A Landmark for Digital Privacy

    India’s new Digital Personal Data Protection Act, 2023, applies to any organization or business involved in the collection or management of personal data. The Act doesn’t only cover data handling within India; it also has authority over data processing that occurs outside India.

    India’s rapidly evolving tech landscape has achieved a significant milestone with the introduction and subsequent passage of the Digital Personal Data Protection (DPDP) Bill in 2022. This pivotal legislation gained approval from the Union Cabinet on July 5 and was presented during the Monsoon Session of Parliament, which commenced on July 20, 2023. It swiftly moved through the legislative process, earning approval in both the lower house (Lok Sabha) on August 7 and the upper house (Rajya Sabha) on August 9.

    With the President’s official assent granted on August 11, 2023, as indicated in the Government of India’s Gazette notification, the Digital Personal Data Protection Bill of 2022 officially transitioned into the Digital Personal Data Protection Act of 2023.

    The reach of the Digital Personal Data Protection Act, of 2023, extends beyond India’s borders, encompassing the processing of digital personal data even when conducted abroad.

    Mr. Rajarshi Bhattacharyya, Chairman and Managing Director of ProcessIT Global, compared the Act with the existing General Data Protection Regulation (GDPR) of the European Union (EU). He said, “It is more advanced because GDPR came out some time ago. This policy is more advanced and comprehensive, which will further India’s progress.”

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    As per a collaborative report from the industry organization IAMAI and the market data analytics company Kantar, known as the ‘Internet in India Report 2022,’ it was revealed that over half of India’s population, amounting to 759 million individuals, actively used the internet, accessing it at least once a month during 2022. The report also highlights that out of these active users, 399 million reside in rural India, surpassing the 360 million users in urban areas. This suggests that internet expansion in the country is primarily being propelled by rural India.

    New Data Protection Act Emphasizes Ethical AI and Global Reach
    Obligations for Entities
    Your Rights and Duties Regarding Your Personal Data
    Healthcare Sector Braces for Impact

    New Data Protection Act Emphasizes Ethical AI and Global Reach

    Deepika Loganathan, CEO, of HaiVE, said, “We are delighted to welcome the enactment of the Digital Personal Data Protection Act, 2023 (DPDPA-2023) by the Parliament of India. This landmark legislation aligns perfectly with our longstanding commitment to ethical AI and data protection. We are pleased to announce that our existing framework for on-premises AI solutions already adheres closely to the seven principles and obligations outlined in the Act.”

    The Act applies to any organization or business involved in the collection or management of personal data. It categorizes these organizations into two groups: those that determine the reasons and methods for processing (referred to as Data Fiduciaries) and those that carry out the processing based on the instructions of the Data Fiduciaries (referred to as Data Processors).

    The Act doesn’t only cover data handling within India; it also has authority over data processing that occurs outside India, particularly concerning goods and services offered to individuals in India. This means that any businesses offering goods or services to Indian residents, regardless of their physical location, would fall under its jurisdiction.

    Mr. Nageen Kommu, CEO, of Digitap, said, “At Digitap, we consider ourselves data processors. We don’t store data; we process it on behalf of our clients, who are the data fiduciaries. While there may not be specific guidelines for data processors, we voluntarily adopt the same policies and procedures that data fiduciaries follow. If a customer wishes to revoke consent, we ensure that the data is deleted, complying with the Act’s requirements.”

    He also mentioned that the act also addresses data security during storage and transmission and Digitap already has robust security mechanisms in place, as they deal with RBI’s outsourcing norms, which mandate data localization within India.

    Obligations for Entities

    The Act outlines several obligations that entities must adhere to when it comes to handling personal data. Some of the key responsibilities include:

    1. Informing individuals before collecting their personal data, specifying what data will be collected, the purposes for which it will be used, and the rights individuals have.
    2. Obtaining consent or relying on legitimate reasons when necessary.
    3. Collecting only the personal data required for the stated purpose.
    4. Keeping personal data only as long as needed for the intended purpose and deleting it afterward.
    5. Establishing a mechanism for addressing grievances and concerns raised by individuals.
    6. Implementing appropriate technical and organizational security measures.
    7. Notifying the Data Protection Board and affected individuals in case of a personal data breach.
    8. Seeking parental or guardian consent and refraining from activities like behavioral monitoring, tracking, or processing that could harm children or individuals with disabilities.
    9. Limiting the transfer of personal data outside India to specified territories.
    10. Conducting data protection impact assessments, periodic data audits, and appointing a Data Protection Officer and auditors for Significant Data Fiduciaries.
    11. Complying with requirements regarding the cross-border transfer of personal data and seeking applicable exemptions.

    To further align with the obligations of the Digital Personal Data Protection Act, of 2023, Loganathan stated that HaiVE is in the process of fine-tuning the company policies and processes. “We are developing a Digital Personal Data Protection Act, 2023, compliance framework that will serve as a comprehensive guide for our team and our clients. This framework will automatically apply to all our future engagements in India, ensuring seamless compliance with the Act’s provisions,” she added.

    Your Rights and Duties Regarding Your Personal Data

    Individuals have been granted specific rights under the law concerning how their personal data is handled. These rights encompass:

    • Right to Access: Individuals have the right to be informed if their personal data is being processed. They can request a summary of the data being processed, details about processing activities (like its use for targeted advertising), the identities of entities with whom their data has been shared (such as processors or third parties), and the types of data shared.
    • Right to Correction & Erasure: Individuals possess the right to have inaccurate or misleading data corrected, incomplete data completed, and their personal data updated, particularly when this data is shared with other entities or used for decision-making. They can also request the deletion of their personal data (or withdraw consent if consent is the basis), although entities may retain it if required for legal compliance.
    • Right to Grievance Redressal & Nomination: The Act introduces a grievance redressal mechanism allowing individuals to file complaints with entities regarding compliance with the Act. Entities must respond within a specified time frame. If dissatisfied with the response, individuals can escalate the matter to the Data Protection Board. Moreover, individuals can nominate someone to exercise their rights concerning personal data in case of their incapacitation or demise.
    • Duties: The Act also outlines certain responsibilities for individuals, such as providing accurate information, refraining from impersonation, withholding material information, or submitting false complaints to the Data Protection Board.

    Bills and Acts: Digital Personal Data Protection Act, 2023 | 19 August, 2023

    Healthcare Sector Braces for Impact

    Kapil Kumar, Chief Technology Officer- Medical Informatics, Artemis Hospitals Gurugram has raised concerns about its implications in the healthcare sector. He said, “Due to the growing uptake of digital health technologies like electronic health records and telemedicine, the Digital Personal Data Protection Act, 2023 will have a significant impact on the healthcare sector.”

    According to Mr. Kumar, this measure aims to regulate the collection, storage, and distribution of sensitive patient data, thereby safeguarding individuals’ privacy rights. He also referenced previous incidents that underscore its significance. For instance, in 2019, there was an unauthorized access breach that compromised the health records of nearly 6.8 million patients and doctors. Similarly, in 2021, a breach of Indian government websites exposed the COVID-19 lab results of over 1,500 residents. In Kerala, personal information from more than 200,000 patients was inadvertently disclosed. This regulation emerges as a champion of data privacy in the healthcare sector.

    The Act is significantly distinct from the existing law, which offers limited protection, mainly in cases of security breaches, and only for specific types of data (sensitive personal data). In contrast, the Act offers extensive safeguards for personal data by imposing responsibilities and granting individuals greater control and awareness over their personal information.

    While the Act unquestionably marks a substantial advancement in safeguarding individuals’ digital rights, the Data Protection Board’s subsequent rulemaking and advocacy efforts will play a crucial role in not only reinforcing these rights but also establishing a structured framework for data processing.