High jumps in India's tech revolution

Digital Leapfrogs: How technology is reshaping consumer markets in India

Author: Vijay Mahajan
Publisher: HarperCollins

Pages: 288

Price: Rs 599

Going by current media coverage, it is easy to conclude that the technological revolution of our times, the internet, has found its footing only in the media and financial technology (fintech) spheres. But this book opens our eyes to how innovative companies in the fast moving consumer goods industry, education and even agricultural space are using IT to revolutionise their businesses.

And the author, Vijay Mahajan, as befits his role as a professor at the McCombs School of Business in Austin, Texas, makes his narrative credible by quoting an immense number of facts and figures. The fact that he has spent some time in India as the Dean of the Indian School of Business at Hyderabad makes his narrative much more grounded in the reality of India than is the case with many other foreign-based writers commenting on India.

The term “leapfrogging” is defined by the Oxford English Dictionary as the process of making rapid progress in the following manner: “with legs parted, vault oneself over the backs of others”.  This book is packed with cases describing such leapfrogging in many diverse sectors in India, both urban and rural.

One instance he describes is how India has avoided the painful process of having all its people access communication first through personal computers linked through landlines to the internet by leapfrogging directly through mobile phones on to the internet. His description of this includes mention of how Reliance Jio aided this process by launching very low-cost mobile phones together with free 4G connections.

The author also describes how India’s consumer companies are using digital technologies to reach what he calls consumers in India 2 and India 3 (India 1 being composed of people like us, dear reader). He points out that 90 per cent of India falls into India 2 and India 3. The case he discusses at length is the use by Hindustan Unilever (HUL) of digital technologies to reach out to these Indias for their consumer products. For instance, the Shikhar app that HUL developed allows 350,000-plus of the company’s retailers to order the company’s products and thus automate its supply chain.

Another case study that the author describes is that of Byju Raveendran, who started off his eponymous business in 2009 as an online tutorial college for Common Admission Test aspirants to the Indian Institutes of Management but leapfrogged from there to other competitive exam tutorials achieving a revenue of Rs 2,800 crore in the year 2020 and an enterprise valuation of $17 billion.

The author describes the Indian government’s efforts in creating and running services such as Aadhaar (providing a digital identity to all Indians) and Unified Payments Interface (which democratises payments) as the pillars on which India’s digital story is built. He even points to how Google, in 2019, formally wrote to the US Federal Reserve Board urging that authority to build a UPI-like real-time settlement system for the United States.

Professor Mahajan also correctly points out that astounding events such as Reliance Jio adding 50 million new subscribers in just 83 days was made possible only because of Aadhaar’s eKYC (electronic know-your-customer) system. In fact, India’s booming fintech system business has created many unicorns and is, in a major sense, attributable to the Indian government’s initiatives such as Aadhaar and the UPI.

He describes how the Indian government think-tank NITI Aayog is working on a National Health Stack consisting of digital health records, unique identifiers and pipelines that facilitate information flow among all stakeholders in the Indian healthcare system. This will, no doubt, create intense startup activity in India’s healthcare system which, in turn, will benefit the common citizen.

The big picture he paints in this book is that digital technologies are transforming consumer market opportunities in not just India but possibly in all developing countries. The most valuable insight Professor Mahajan provides in this book is that “technology has the greatest power to induce societal transformation when it is adopted by the middle and lower-middle class consumers. Digital platforms “can help consumers access products and services previously unavailable to them.” Thus, “small merchants can reach new consumers or offer better options for existing consumers, potentially boosting their incomes while delivering access to financial services, creating new income opportunities for their communities, or providing healthier alternatives to traditional practices and products,” he writes. What makes this book worth reading is that the author illustrates each of these aspects through case studies he has gathered from several hundred interviews.

ajitb@rediffmail.com.The reviewer is an internet entrepreneur