Ritesh Agarwal : The founder of oyo rooms , founded by him in 2012 . It is backed more than 700 hotels under its brand . At the very young age of 18 , he started working on it later he rebranded it to oyo rooms ,network of 2,200 hotels operating in 154 cities across India – with monthly revenues of $3.5m and 1,500 employees. It has raised a total of $125million of funding in 4 rounds from 7 investors. Ritesh Agarwal has also won many awards and accolades for his work including the Business World Young Entrepreneur Award. He is a speaker at entrepreneurial conferences and institutes across the world and a fellow of the Thiel foundation. Agarwal holds a high school degree from St. Johns Senior Secondary School.
We are currently witnessing changes in almost everything, be it technology development, change of the mode of education, market fluctuations and many more. The major change which we will be talking about today is Startups. If you would’ve asked 10 years ago to people about starting their own business , the quantity of people who would’ve actually said yes could have been very low. The people used to perceive startups as a gamble, where they were unaware about the winning percentage. Everybody wanted to earn loads of money, but very few were actually willing to earn money from their startup. People were feared the amount of money and all their hard work which they will will lose. But now the situation is completely changed, the mindset of people which they used to had about startups is completely changed.Startups are now seen as an opportunity by the everyone, where they invest their money. Even in India we saw many successful startups, which started from nothing and now they are giving very tough competitions to the global MNCs. The success story of these startups are worth sharing and many more people should know about them so people can get inspired by them and can start their own venture without giving it a second thought. Some of these Indian startups are mentioned below :
India’s foremost online retailer, providing a marketplace for both direct sales and merchant. Like Amazon and Alibaba, Flipkart’s diverse array of products includes everything from LED bulbs to Story books, to sarees to fan, and they are still adding more.By March of 2015, Flipkart had received a total funding amount of %2.45B, with Accel Partners and Tiger Global Management among the key investors.
The Delhi based Snapdeal is Flipkart’s main competitor in home soil, with a network of over 50,000 domestic and international brands and more than 20 million members.In a mere 5 years, Snapchat’s two founders have managed to capture 1 out of every 6 Indian internet users, so its future- just like that of its prestigious U.S. counterparts- is certainly one to keep an eye on.
Grocery e-tailer BigBasket is India’s largest online food and grocery store, selling more than 1,000 brands including an “Imported and Gourmet” range. The startup also sells grocery products under its own brand names Fresho, popular and Royal.BigBasket only launched in December 2011 and, with Indians spending around $370B annually on food and groceries , the future is bright.
Hungama.com is a Bollywood specialist, with the world’s largest repository, but the digital entertainment company’s storefront has over 2.5M pieces of content spanning an array of genres and languages. Subscribers can stream music tracks, movies, music videos, and dialogues as well as mobile content including ringtone and wallpaper.Owned by Hungama Digital Media Entertainment, this startup is in good hands to reach its goal of a 100 million MAUs by March 2016.Also, Hungama is wisely using its mobile-first capacity.
Online ticketing platform BookMyShow provides caters to the customers to want to attend everything from movies to plays to sporting events. Customers can purchase gift cards, receive offers based on bank patronage and use the mobile app to buy their tickets.After raising $25M in June 2014, the company has been growing yearly at 70% and operates in 2,500 of the 10,000 screens across India.
Start-ups (which indirectly fall under MSEs category of taxation) since 2014 have collected around $100 billion and are on the ever-accelerating way to mark its way to $500 billion by 2025, with a projection to create over 35 – 40 lakh jobs.
It was a beautiful day for Mr. Singh. He had invested in an idea introduced by a bunch of boys who had recently graduated out of an Engineering College. It was something related to irrigation technology with the name “Ivy-Irri Tech”. Mr. Singh had no idea what it was, but his financial advisor and accountant advised him that the investment would garner good profit in a very short period of time. After he found everything to be appropriate, he wrote off a check for Rs 3 crore for 3,000 shares to Ivy-Irri Tech boys. Today, he received the triple of his investment (i.e., Rs 9 crore) as the start-up was brought under the banner of a multinational corporation (MNC).
Mr. Singh was indeed an ‘angel’ who invested in the start-up seeing the growth projection as calculated by the discounted cash flow (DCF) method. He knew and took all the risks on the idea. Like Mr. Singh, there are a number of high-value individuals in our nation who are approached to invest in a small idea, which the ones presenting are able to convince (or show) to be of big worth in a short period of time.
A few days went by and the boys again contacted him over the notice they received from the Income Tax Dept. The notice stated that they had to pay 30% as ‘Angel Tax’ clause of Section 56(2)(vii b) of the Income Tax Act, 1961.
These start-ups operate in a very vulnerable environment and anything can happen any moment. All the money made in the first half of the day may just vanish off by second. The basic principle of start-ups is a low investment to high yield, in less time.
According to Economic Times, “Angel tax is a term used to refer to the income tax payable on capital raised by unlisted companies via the issue of shares where the share price is seen in excess of the fair market value of the shares sold. The excess realisation is treated as income and taxed accordingly.” This is charged when the initial “angel” investor is an Indian, while foreigners are exempted from it as that’d just add more to Foreign Direct Investments (FDI) category. Also, the value of start-ups is counted against the industry suggested method of DCF with the net value present (NVP) method that increases the difference between the projected margins to the excess premium earned.
Hence, nowthe start-up will have to pay the excess of what they received of initial capital (i.e., Rs 3 crore). In shares & dividend terms – Mr. Singh bought 3000 @ Rs 10000 each. He sold them (the startup sold it to the MNC) at a premium (excess from Market Value – profit) of Rs 30,000 for each share. Hence, for 3000 shares the excess profit is Rs 6 crore. Now 30% of Rs 6 crore is Rs 1.80 crore and that is what the start-up is charged as “Angel Tax”.
This is a major de-motivation to the hardworking, innovative minds that have worked hard to put up the efforts to bring their dream into happening, just like the “Ivy-Irri Tech” chaps and returned the initial investment in a triple in less than some years, but now are a victim of the ‘Angel Tax’.
However, the income tax regimes in our nation, which are duly unregulated at the helm of dysfunctional bureaucracy and call for immediate reforms at a great extent, do not spare even the ‘angels’. This taxation regime has led to the inclination of angel investors into investing in tech start-ups and deviating from the non-tech cohorts. The falling of start-ups into MSEs category, the very narrow definition of start-ups, and the bureaucracy which looks for an opportunity to put to their advantage, are the reasons for non-tech start-ups being not worth investment against hassles.
Of the limited few exemptions in Angel Tax, the angel investors tend to avoid the non-tech sector as there’s a very obstructive measure which restricts the investment into immovable objects. So if the start-up in non-tech sectors, would involve investment in immovable assets (which is the case in most non-tech start-ups) then the investment would not fall into exemption into start-up’s seed funding and thereby incurring additional taxation. The ruling Govt. has presented a very ambitious plan to lead India to a $5 trillion economy for which there needs to be a safe growth rate in the economy at 11.3% (also assuming rupee falls to the dollar, further) for the next five years with no exception contrary to the present which is less than 4%. Further, with Moody’s downgrading India to ‘Baa3’ category, just one rank above “junk” category, the onset of FDIs flowing into Indian start-ups seems reclusive and does not seem to recover anytime soon. So, the Income Tax Act, 1961 needs to reform from its very core to match up the economic challenges of the 21st century for Indian investors to keep the market afloat and its operations flared up. Time is money, and neither of that we do have.
India is struggling for becoming third largest startup ecosystem in the world for which it has provided the ground for many new startups in last few years still 90% of startup fails within 5 years, the main reason behind this failure is lack of uniqueness and also 98 out 100 young entrepreneurs copy the western ideas they have lack of information and knowledge about new technical innovative ideas for their business.
According to the study of IBM institute of business value (IBV) conduct the survey in collaboration with Oxford Economics to know about India startup ecosystem and the main reason behind the failures in Startups is lack of innovation, non-availability of skilled workforce and insufficient funding. As India is giving a chance to many new startups and a young businessman still there is a high rate of unemployment in India also the main reason is an increase in the population and lack of proper knowledge about work.
IBM said that “77% venture capitalist surveys believe that many Indian startups lack pioneering innovation based on new technologies or unique business models. Indian startups are prone to emulate already successful global idea”.
According to experts, India is follower market however, artificial intelligence machine is mainly restored in retail and banking.
Through the global study, it has been found that India comes in the bottom-most countries in terms of global innovation and the report state the reason behind this is a poor education system. On the Global Invitation Index (GII) India comes on the 66th rank also there is no doubt about India can become a global driver because we have potential to do work, a pool of talent and cultural innovation.
Also, IBM states that 70% venture capitalist claim that the main problem faced by the Indian startups are an investment of talent and there is limited availability of important skills.
Another report suggests that there were around 6’000 IT companies in the year 2016 which came down to 800 in just nine-month of 2017 this means there is a big loss in startups and also many people are getting unemployed
Head of marketing intelligence firm Rishabh Lawania also shared his view by saying “Since 2015 as many as 1,503 startups have closed down in India. The major reason is due to the replication of western ideas and not lack of subsequent funding from investor”
The main failure is being faced by eCommerce and food technology.
The chief digital officer of IBM India/South Asia Nipun Mehrotra said “the Indian startup community ranked third globally in terms of the number of startups, has been creating new job opportunities and attracting capital investment. We believe that startups need to focus on Societal Problem, including health care, sanitation, education, transportation alternate energy management and others which would help deal with the issue that India and world face. These require investment in deep technology and product which are built to scale globally”.
Now, due to pandemic situation, India’s economy is facing crucial time and for stabling, these new young entrepreneurs should come up with innovative ideas and skilled workforce which will help India to regain its economy and also soon it will be the third-largest startup country in the world and for all this hard work and creative mind is required.
As indicated by one Facebook report, there has been a 70% expansion in time spent on the application in Italy. A March 2020 study of U.S. conducted on online networking users discovered that 43.1% would scroll through Instagram more whenever staying home while 63.7% and 62.3% used YouTube and Facebook, in comparison to the other websites, more.
Presently is a prime chance to develop business accounts by putting out valuable content that doesn’t focus on a hard sell. The objective should rather be to assemble an internet following through:
1) For example, how to extract productivity out of “work from home” and methods of reducing expenses on veggies.
2) Posting harious content of mockery, similar to funny clippings and memes.
3) Collaborating with an influencer. 63% of shoppers trust influencers more than brands and COVID-19 has allowed influencers over a wide scope of ventures to make their administrations accessible at a sensible cost.
With relatively little expense and exertion, an organization can understand results that keep on profiting them long after the situation improves.
GENERATING MARKETING SCHEMES OVER THE WEB
Online campaigns help to spread the word about their businesses and the new ways of functioning, with less amount of time and effort invested, than asking their regular set of customers to do so.
This can be achieved through Smart bidding like Google Ads, Content Marketing and Coupons designed from Easy Promo Or Woobox
CARRYING OUT DAY-TO-DAY OPERATIONS ONLINE
There are not many organisations can transition their day-to-day functioning using internet. However due to the availability of video conferencing facilities like Zoom and Google Meet, there can still be interactions between the customers and the buyers.
Orders of groceries and other essentials can be taken online, education through schools and Institutions is being provided online and live tutorials and sessions are being conducted in which clients are asked to make the payments online. There are several other courses available on digital marketing too which can be availed to enhance the speed of the working staff and enable them to make the most out of the present situation.
WHAT’S IN IT FOR YOUR BUSINESS?
Numerous organizations are curtailing their showcasing endeavors due to COVID-19, however what they should do is multiply while making the most of the new open doors that are springing up.
This accentuation on digital marketing isn’t something that they’ll need to back off on once the lockdown is over. Internet shopping won’t stop at any point in the near future, and most organizations will find that online associations are more helpful than in-person interactions.
While it might be viewed right now as an alternate course of action, when the pandemic is over, everybody will probably understand that it’s much more than that.
On the off chance that a very much upgraded site, all around arranged advertising devices, and selection of virtual interchanges can get an organization through one of the most exceedingly terrible crises in present day times, for what reason can’t digital-based promoting make its all intents and purposes relentless?
Hope you all had a good time reading!
Presently is a lucky opportunity to put resources into longer-term venture channels, especially if an advertising expenditure plan can be rearranged towards that path.
The global market is chaotic and questionable now, so outbound strategies can presumably be moved to working out inbound resources, similar to the organization blog.
1) Making announcements on the home webpage passing information that the business is willing to support its customers. Incorporating a connecting link to a FAQ where clients can get more data about assistance hours and delivery options.
2) Reorganising product/services or administration pages with new illustrations and portrayals. Brief specials or discount offers could be made to maximise the orders.
3) Setting up an internet business framework for taking on the web orders. Major web hosts have incorporated Stripe integration in their progressed facilitating packages. Local companies and small businesses can likewise opt for Shopify or Etsy, which have e-commerce facilities. Many individuals also use Paypal. Managing account there can also speeden up the growth of orders.
Businesses that have generally sold items to customers from shops/stores only may scrutinize the intelligence of building advanced resources like an online store, accepting that they can’t contend progressively with bigger, established portals like Amazon.
Notwithstanding, due to over-crowding in web based shopping and much-expanded social networking, individuals are currently holding up longer than even a month to receive their Amazon packages, and no one’s upbeat about it.
In the event if people discover that an independent business is selling what they require and that they’ll receive it quicker without prolonged delays, they’ll be up for it instantly.
TAKING FIRST STEPS WITH SEO MARKETING
The pandemic has transformed the way customers approach the idea of shopping. Roughly 47% expressed that they are staying away from shopping centers and strip malls in an online poll.
Then again, SEO is experiencing a gradual upward trend, with certain brands announcing a noteworthy increment in their search visibiility from January-March 2020.
Suggested steps towards creating an impactful SEO procedure during Coronoavirus pandemic are as follows:
1) Content creation intended to fabricate trust.
COVID prevention measures have made purchasers increasingly pessimistic. As per a Forrester report, they don’t confide in organizations to finish on guarantees. Brand messages should be created with the goal to instruct, advise, and console rather than gruffly requesting a buy.
2) Adapting a “take-charge” attitude while dealing with the corporate web.
It is significant for organizations to deliberately deal with their online brands. Refreshing item accessibility, keeping the Google My Business page current and keeping client information secure would all be able to put forth the picture of a reliable business.
ATTRACTING AUDIENCE ON SOCIAL MEDIA
An ever increasing number of individuals are managing self-isolation by going on the web to get access to recent news, look for data, and engage themselves.Hence, business social media pages can be easily promoted.
To be continued….
( Part 2/3)
Some issues tend to just disappear if they don’t receive our attention for a longer period of time. However, the coronavirus pandemic is a mammoth issue for the companies all over the world. It is becoming extremely troublesome to just let go of the problem for it is hugely influencing the way business is being carried out globally.
Furthermore, a lot of businessmen, managers and directors are finding it difficult to bring about a change in their marketing strategies so as to get used to this short-term “new normal”.
The possible reasons could be that they maybe still not convinced to adapt to this sense of normalcy with so much going around and them facing their own issues but whatever the reason, this is only going to lead to much bigger problems and could even result in the downfall of their respective companies.
Moreover, handshakes are being replaced by the new norms of digital marketing and remote work forces during the signing of the business deals amongst a handful of other organisations.
These dynamic companies are not only accepting the Covid-19 world with open arms but are also ramparting the need of the hour, the recession resiliency.
HOW HAVE THE BUSINESSES BEEN IMPACTED?
Despite the fact that somehow, every business has been able to keep itself intact amidst the current situation, it hasn’t been any easier for the small startups due to the lack of capital or reserves to sustain their existence especially those which were massively dependent on physical interactions like beauty salons, fashion boutiques, Health Care Centres for yoga etc.
Since these startups were habituated to getting constant customer reviews and then stimulating their growth, they are now afflicted by colossal losses to such an extent that their spontaneous takeaway on this entire situation has been to minimise the product marketing expenditure which should have otherwise been to explore much innovative methods.
All the types of businesses irrespective of their magnitude of growth can easily extract benefits out of digital marketing. The only thing that needs to be done is to bring about a small change in the route of reaching their customers i.e by making business accounts on social media to ensure the prolonged survival of their businesses.
Because customers are in immediate need of all sorts of products but they cannot step out of their homes so the only way to flourish is by doing business digitally.
THE FIRST STEPS TO CARRYING OUT A BUSINESS ONLINE
In the pre Covid era, every customer was well aware of the the “best” that every local business had to offer. Now as we take the present situation into consideration, some of these local businesses have been shutdown after being categorised as “non essential”. Also, the customers are not informed that whether or not they can still continue to buy products from their local favorites as there is a huge question mark on them being still in business.
So now this is the time that these affected startups and local businesses grab most of the opportunity and make this bold decision to step out from the confining walls of their stores and expose themselves to new horizons by establishing their accounts on social media and connecting with customers all over.
CONNECTING WITH CUSTOMERS
Given below are enlisted three steps which are crucial in springing up that link between the buyer and the seller and keeping the momentum going to ensure the business continuity and also building strong connections by adhering to the technological aspects of the process.
1) The first email: If the delivery of products like milk, groceries etc has been affected by Covid 19, the business should make an effort to inform its customers via Email or WhatsApp briefing about the new changes.
2) Updating about post-corona functioning on existing platforms: Businesses who already own emails or other digital communication facilities should inform their customers about the new methoods of operation.
3) Making announcements: Lastly, a public post on social media needs to be made regarding the resuming of online orders while also briefing about how their business is responding to the pandemic.
P.S~ This is a highly detailed research report that I have done on this topic and hence this is just PART 1 of it so that it doesn’t become too lengthy or monotonous.
Next part would be published soon.
Reference article for deeper insights: https://napoleoncat.com/blog/digital-marketing-during-covid-19/