The Indian market has grown phenomenally over the last two decades and given birth to an innumerable number of companies that are surviving despite tough competition from local and broader global competitors. This is primarily because these companies are able to tap into sub-segments of a particular market, i.e. a niche part of a larger target audience.
Niche players have been winning bigger contracts as customer companies are looking for firms with specific skill sets to address their issues. These niche players, typically small sized, are nimble as compared to their bigger counterparts, and many have been delivering software-as-a-service products to their customers in verticals such as BFSI, healthcare, transportation and digital transformation.
The healthcare sector, which is expected to reach a valuation of $132 billion this year, has seen the advent of many small and medium-sized startups. With health awareness on the rise since the pandemic, the growth trajectory for the sector could be phenomenal. Some of the most obvious verticals that have seen growth are on-door delivery of medicines and diagnostics, apps to fix appointments with doctors and hospitals and services that deal with fitness.
For example, Pharmeasy is a company that allows users to order medicines online and also get tests done at their doorsteps. Cultfit is another company that focuses specifically on providing fitness training at people’s homes or in gyms. Practo, 1MG and Mfine are some of the players in the sector that have garnered attention over the last few years. These are all businesses that were able to fine a very particular problem within an industry, and provide a specific solution to it through the use of technology.
In the Banking, Financial Services and Insurance (BFSI) sector, the digital consumer economy is likely to reach $800 billion by 2030, which is almost a 10X jump as compared to the market size of $90 billion in 2020. Digital lending has seen a growth of 39% CAGR over the last 10 years. The business that was worth $270 billion in 2022 is expected to grow to $350 billion this year. There are a whole host of companies that have thrived focusing only on one or two of fintech services.
As far as digital payments are concerned, the top companies currently in the market are Paytm, PhonePe and RazorPay. In the insurance vertical, startups like PolicyBazaar, Acko and Digit have been creating waves. The investment part of fintech too has seen the birth of companies like Smallcase, Upstox, 5paisa.com that have made investing extremely easy for consumers.
The fintech sector, especially payments, has seen an exponential growth over the last few years after the currency ban and arrival of the Unified Payments Interface (UPI) into the scene. UPI has been developed under the careful eyes of the Reserve Bank of India and it clocked over 36 crore transactions per day in January this year, which was a 50 per cent spike from 24 crore transactions done per day in February of 2022.
In transportation and logistics, the most apparent success stories are of movers and packers and goods carriers. The segments that were largely handled by local players were given a shot of digitech and soon you had Porter.in that played the role of an aggregator, like Ola and Uber for taxi services.
These are just some of the sectors where Indian companies could carve out a niche for themselves. According to analysts, the growth of niche-oriented services will be a primary trajectory for Indian startups in the times to come.