Here's How Indian Startups Are Charting Paths To Global Markets
India's diaspora offered a valuable advantage for startups, providing a foothold in foreign markets and mitigating distribution costs
The transformation of the Indian startup ecosystem is both rapid and remarkable, with a clear shift towards global expansion. Today, Indian startups are aggressively expanding globally, aiming to access international markets, attract foreign investment and benefit from favourable regulatory frameworks for growth and innovation. Out of the thriving startup community in India that boasts 113 unicorns, a significant yet selective portion has taken the leap into international markets.
The ambition here is clear: to harness global opportunities that extend beyond domestic success, engaging with a wider array of tools, mentorship opportunities, investors and specialised business services crucial for scaling in competitive international arenas.
This global expansion is not without its challenges. Startups venturing overseas confront a complex web of issues that demand a resilient and resourceful support system. The need of the hour is to understand the role of ecosystem support in facilitating their global expansion.
The landscape of global expansion for Indian startups
Indian startups are drawn to international expansion not only by the need to scale their operations but also by the opportunities to attract global talent and enhance brand recognition. This trend is further fuelled by favourable government policies, tech advancements, access to capital and an increasing talent pool. By leveraging cutting-edge technologies and disruptive business models, Indian startups are not just addressing the pain points of Indian consumers but also the demand that comes from international frontiers. As per Global Launch Base, in 2022, approximately 570 startups out of India's vast ecosystem of 60,000 ventured into international markets, marking a significant increase from the 300 that did so in 2018. Some of the top destinations for Indian startups seeking a global footprint include Singapore, the US, the UK, Canada and Australia.
Challenges and Opportunities
While there are beneficial conditions, it is also imperative to consider the key challenges for Indian startups expanding their presence abroad. About 30 per cent of the startups mention funding as the foremost challenge, followed by talent acquisition (25 per cent), regulatory compliance (20 per cent), market access (15 per cent) and cultural adaptation (10 per cent). Other factors include complying with varying legal requirements, competing for talent on a global scale, adapting to local market business practices, having access to mentors globally and tailoring products and services to suit different cultural preferences. This is where the importance of a platform that enables them to set aside and manage these challenges, while they focus on expansion, cannot be overstated.
This kind of support ecosystem will not only be able to provide them with access to global networks, mentorship and resources but also empower startups to navigate unfamiliar territories with confidence and efficiency. All these facilitate valuable connections and opportunities for collaboration. Mentorship from experienced professionals with global expertise can give them insights and guidance on how to streamline their expansion process. There are also collaborative communities which have the necessary tools and knowledge needed for international growth, fostering a culture of innovation and shared learning.
The sustainable model approach
Even before startup founders think of expanding globally, they need to develop a sustainable business model that ensures long-term growth and profitability. This requires careful planning, market research and strategic partnerships.
For instance, one of our portfolio companies, Dog-O-Bow, which specialises in pet clothing and accessories, has recently expanded into international markets including UAE, Singapore, USA, Nepal and Thailand. In its market selection process, the company considered three main factors: a significant pet population, high spending capacity, and interest from local pet stores or distributors. They have a robust online presence across platforms like their own website, Amazon (India, US), Flipkart, Supertails and will soon be available on Walmart.
Such expansion underscores the importance of market research, cultural adaptation, strategic partnerships and continuous innovation. Bylearning from the experiences of successful startups and leveraging ecosystem support, Indian startups, even at early stages, can overcome barriers to growth and establish themselves as global leaders in their respective industries.
Indian diaspora: A worldwide network
In 2020, India claimed the largest diaspora population globally, as per the UN's latest data featured in the World Migration Report 2022. This expansive diaspora serves as a significant advantage for Indian startups, offering a substantial foothold to pilot launches in foreign markets and refine products through trial and error, prior to a widespread release to the mainstream population. This advantage is particularly pertinent in developed markets, where advertising and distribution costs often soar.
It is also imperative to develop an understanding of international trade and finance since these are the foundational pillars for going global. Structured solutions and networks play a crucial role in executing growth strategies effectively, enabling startups to adapt to evolving market dynamics and emerging trends. A global mindset and a willingness to continuously adapt are essential for success in international markets, as startups navigate diverse cultures, regulations and competitive landscapes. The need of the hour is for stakeholders across the ecosystem to engage and contribute to a collective approach toward making Indian startups global leaders in innovation and entrepreneurship.
