Tuesday, February 28, 2017

The Indian On-Demand Economy

In last 2 years, as an independent earning millennial with hardly any financial liabilities, there has been a major shift in my spending patterns. Having succumbed to what once started as discounts, and majorly to convenience, on-demand services occupy a major share of my wallet. It's not just me, ride-sharing apps have seen an enormous 290% growth in 2016 (mobile downloads) which is driven by the rapid rate this trend has been adapted by Indian millennials and reflects in their spending patterns. However, as this growth matures, and discounts start to slow down, now comes the real test for the shared service providers on the sustainability of their model.

Renting is not a new concept and at a local scale, it has always been there for students or the young working on-the-move population's convenience. However, to actually make it a habit which makes people spend which leads to 'money-making disruption' is a major challenge.

Logic seldom supports trends and this has been true for some time in a family-oriented culture of ours. This very fact can actually be a bad news for businesses in India trying to make moolah based on the instant gratification spending of this generation. The fixed asset ownership model still gets a preference over renting it out, even though the overall cost for the both comes to be the same, as per a recent UBS analysis. However, even keeping the costs same as the ownership model is a challenge of its own and needs to be tackled without the mere cash-burning model, as can be learnt from the e-commerce market in India