INDIA: BCG has named 17 Indian companies that are driving the digital revolution in emerging markets as well as globally. Nowhere is the trend toward digitization more evident than among the 17 Indian challengers who are leveraging digital technologies both to win locally and compete globally with multinationals.
Apollo Tyres, Bajaj Auto, Bharti Airtel, Dr. Reddy's Laboratories, Godrej Consumer Products, Infosys, Jain Irrigation Systems, Larsen & Toubro, Lupin, Mahindra & Mahindra, Motherson Sumi Systems, Reliance Industries, Sun Pharmaceuticals, Tech Mahindra, UPL, Vedanta Resources, and Wipro are among the global challengers in 2018 who achieve their leadership positions by leapfrogging their developed-market counterparts and disrupting existing business models.
A very large representation of Indian global challengers (17%) on the 2018 list makes it the second most–represented country on the global challengers list and hosts 17 challenger companies—compared to China’s #1 as host to 25 companies on the list. These 17 Indian challengers have experienced tremendous revenue growth: 4 times more than S&P 500 companies and keeping margin levels high in the last 5 years.
However, only 3% of unicorn companies come from India, which is still very low compared to China with 33%.
Half of Indian challengers are concentrated in the industrial goods sector, TMT, and health care, which is also very representative.
Reviewing the last 5 years of the Indian challengers, BCG sees a major shift toward digital adoption. The majority of Indian global challengers—71% compared to the average of 100 global challengers with 59%—is leveraging digital capabilities to succeed, in other words, they are either digital natives or significant digital adopters.
Indian challengers develop their digital capabilities in three main ways:
-They invest in internal innovation programs and R&D.
-They pursue partnerships and join digital ecosystems or establish their own.
-They acquire digital capabilities through M&A and private investments in start-up companies and technologies. All are proving to be highly productive avenues for digital development.
Indian companies have an access to a heavily digital consumer base in India: The number of online shoppers in India has been growing by 45% p.a. (compound annual growth rate 2009–2016) which is the second-highest figure after Indonesia (66%). Digitally influenced spending in India will increase to more than $500 billion by 2025.
Indian consumers also have the highest readiness and openness to innovation worldwide: 85% of survey respondents reported likeliness to ride in a self-driving car—compared to 30% in Europe and the USA.
“Going forward, we believe the Indian global challengers have an outstanding position to capitalize on their strong competitive advantage combined with a number of the defining characteristics of emerging markets,” said Sharad Verma, a BCG senior partner in New Delhi and report co-author. “The Indian market contains one of the world’s last remaining pools of high demographic and economic growth, which the global challengers can access with efficiency and value-based productivity while developing digitally enabled workforce and leveraging collaboration in digital ecosystems.”