Startups Are Disrupting These 7 Traditional Businesses In India

The digital and technological revolution that created companies like Amazon and Facebook has spawned into a full blown startup boom where thousands of startups exist to make life easier, more entertaining and cheaper for many of us. India is the world’s 3rd largest startup economy, only behind the US and China. Think of a need and there probably is a startup for it. Shopping, traveling, eating to even banking- all conventional industries are in a startup mode and online. Increasing penetration of internet, easier access to broadband and wifi, availability of cheaper smartphones is enabling this change. While this means good things for the consumer, startups are disrupting businesses that have existed for years. 

Here is a roundup of some of the traditional businesses that are feeling the pinch of the mushrooming startups that threaten to affect them and eventually even displace them. What remains to be seen is whether the traditional businesses will adapt to this change, reinvent themselves and join in the wave on a “If you can’t beat them, join them” philosophy, or wait it out, let the wave pass, for the VC funded startups to bust as the red bottomlines begin to show, and emerge as the classics.

 

1.  Shopping- from everything from clothes to mobile phones.

According to a research conducted by Google India, approximately 8 million Indians shopped online in 2012. The online shopping industry in India is growing rapidly and will continue to see exponential growth. Everything from clothes to mobile phones to even tabboo products like smoking paraphernalia is being sold online by ambitious and entrepreneurial millennials. Categories like apparels & accessories and niche product categories like baby products, home furnishings & health-nutrition are seeing a massive switch from offline to online and metros are driving this change.  Brick and mortar shops unable to deal with the convenience of ecommerce, free home delivery and massive discounts offered by etailers are forced to shut shop or operate at losses.

2. Travel agents

The convenience of booking airline, train and bus tickets in a couple of clicks and easy payment options have well neigh made the “Travel agent” redundant. The travel segment accounts for more than 70% of the online transactions in the industry. Players like MakeMyTrip, Cleartrip, Yatra and Redbus continue to drive the most of this online travel boom and more continue to join in. On one hand you have the online players like Redbus, MakeMyTrip etc offering massive discounts on everything from flights to buses and on the other you have the brick and mortar travel agent would would charge a commission on top of the fare. The switch is an easy one to make.

 

3. Hotels

While the hotel industry has more to thank the technology wave that has enabled people look for, compare and book hotels at the tip of their fingers with hotel aggregators like stazilla, oyorooms and makemytrip, there is the growing, if minute disruption by the wave of the sharing economy. Startups like Couchsurfing and AirBnB are threatening the hotel industry, ever so slightly, by enabling people to let out their rooms for a fraction of the cost of a conventional hotel, or for free in case of couchsurfing. More recently, the concept of hostels, hitherto nonexistent in India is slowly coming into the fore with startups like Zostel that have started their first few hostels for the price conscious young traveler.

However, interesting to note here that while on one hand hotels are being affected ever so slightly by the boom of the shared economy, at the same time startups in the hotel aggregator space like Oyo Rooms and Zo bookings are bringing more business to an unorganized industry.

4. Real Estate Brokers

Not too long ago, a search for a tenant or a house meant registering with a local property dealer. The dealer would have a list of houses registered with him, would set up a meeting with the landlord and the prospective tenant, show the house and make a commission by way of a part of the rent from both parties. Cut to now when looking for a house has begun to mean logging into a 99acres, Magicbricks, or a Housing. The property dealer may well be on his last leg.

 

5. Food Delivery Chains

 

For the longest time, ordering in has meant calling for a pizza or having your local restaurant deliver if they had the option of home delivery. Not anymore. Food tech is booming in India and right from freshly prepared breakfasts and meals delivered to your home by startups like Freshmenu, Brekkie to startups like Swiggy and Food Panda that act as the go between the restaurant and you, having access to a whole host of food options at competitive prices has never been better. Probably the only person complaining is your nearest Dominos or the restaurant that wonders how there’s a reduction in the foot falls at peak office hours.

 

6. Local Cabs

How the advent of the online cab business has and continues to destroy the local taxi industry in India and the world over has been in news for sometime. With convenience like booking on an app, maps, discounted fare and online payments, these online taxi aggregators and providers have changed the way people look at local commutes. The days of haggling with an auto rikshaw driver, being fleeced on the fare and waiting on the road looking to hail a cab or an auto seem to be a thing of the past.

While local taxi business owners cry foul and protest, Uber and Ola supporters would point to the fact that thousands of jobs have been created in the process and we are heading towards the concept of a “shared economy“.

 

7. Grocery Shopping

While still in its nascent stages, if the influx of the grocery shopping apps are an indication, India could soon be looking at grocery revolution. India has a large and unorganized base of ubiquitous “Kirana Store” at every nook and cranny, and the startups are looking to make inroads into tapping this sector. Grocery apps like Big Basket and Grofers are offering huge sign-up discounts, and many like PepperTrap, Zopnow, LocalBanya, etc. are next in line. It’s a sign of the things to come when cab-hailing biggie Ola cabs recently announced its foray in the grocery delivery business. The big brick and mortal departmental chains like Hypercity and reliance mart have noticed the threat, whats with HyperCity launching its own grocery app “Zopnow”. The convenience of discounted products, home delivery will beat the tradition of just walking into a neighbour hood to stock up on the rations and convenience items, only time will tell.