While this is true everywhere, India is a little different. The most salient feature of our high streets is the presence of millions of people with no jobs, little capital and few skills beyond their time and a willingness to hustle. <thread>
30 years ago, they used to run STD PCOs. 20 years ago, cyber cafes. And 10 years ago, mobile recharge shops. While their slightly wealthier neighbours were investing in inventory to set up mobile phone stores, these were pure "service providers".
Their value proposition is simple: provide shared access to a resource that is rare or expensive or both. In the 90s, that was a phone line. Then, successively, a PC, a smartphone and an online payment instrument.
The combination of Moore's law and rising incomes meant that, as consumers got direct access, these access providers had to quickly move to the next techology platform. You could no longer run a profitable STD PCO after Reliance infocomm launched, so you started a cyber cafe.
And there lies the crucial difference between Western and Indian high street intermediaries. This variety of Indian intermediary exists because of technology platforms and is entirely dependent on them.
While both have been "disrupted by technology", the disruption is sudden and violent for the Indian intermediary. He brings nothing else to the table - not stock, not sales, not advice. Only access.
Now that the current generation tech platform (the smartphone) is highly penetrated, what do these service providers do? And what are the opportunities they create?
Either we bet that a new platform will emerge in time to absorb the excess capacity of the last one. Say VR tech becomes mainstream tomorrow. We will see an overnight mushrooming of VR studios that rent you a headset to play games, appear for job interviews and yes, watch p*rn.
If such a platform doesn't emerge in the next 3-4 years (and I'm not holding my breath), this group's demand for capital and skills will skyrocket. With no manufacturing jobs around, millions of driven but unskilled self-employed workers will look for other service gigs.
One clear opportunity will be to provide them with capital so they can participate in the gig economy. They will buy cars and bikes and join platforms like @Olacabs, @swiggy_in and @DunzoIt. They will buy pickup trucks and join Porter and Loadshare.
If you can assess their likelihood of success in these gig platforms, there's huge upside in providing them the tools of a new trade. Without any formal data and with their volatile past track record, it can be a bit of a gamble though.
A much larger opportunity, IMO, is in getting this base of providers to deliver more skilled services. @shop101 and @meeshoapp are giving them the tools to sell merchandise to their networks. @helloturtlemint is providing them a platform to sell insurance.
Unlike the access-orientation of their past businesses, these new gigs are skill-oriented. Selling jewellery or insurance is much, much harder than providing mobile recharges, but it's a lot stickier.
Consequently, these platforms will be extremely leaky unless they provide the tools as well as the training for the service providers to succeed in a skilled marketplace. The true success of such B2B2C platforms is not in growing GMV, but in growing GMV per seller.
As we look for more such service platforms -in education, financial services, travel and retail- an important consideration is the required skill level to deliver the service. It needs to be high enough for the intermediary to be relevant, but low enough for them to learn easily.
For example, insurance sales is a skilled job. It requires understanding your client's needs and identifying the right product that fulfills it. Loan sales, OTOH, may be mostly about sourcing a lead and passing it on to the platform, eventually making the intermediary redundant.
Creating foreign travel itineraries might fall at the opposite end of this spectrum: it may be too hard to learn unless you've been abroad yourself. Those platforms that achieve this balance, though, have a millions-strong workforce available to them.
To sum up this long, rambling thread:
- Smartphone and payments adoption will disrupt the livelihood of millions of service providers
- You can sell/finance assets that let them join the gig economy
- You can create new platforms to allow them to deliver higher-skilled services
- Smartphone and payments adoption will disrupt the livelihood of millions of service providers
- You can sell/finance assets that let them join the gig economy
- You can create new platforms to allow them to deliver higher-skilled services
One more thing. Bombay has high streets. Bangalore has main roads. Randomhalli main road is where you'll see this phenomenon in action. :)
