Emerging markets are back in vogue with investors. After riding high for several years, global economic conditions caught up with many of these countries and as such, growth slowed and for some countries, there was a retrenchment. Now, more countries are opening their doors to global commerce. The opportunities are great. Consider these major findings from PGIM:
- Emerging Markets will collectively be the primary drivers of global growth over the next decade.
- Emerging Markets, combined, represent 60% of GDP on a purchasing power parity basis.
- Emerging Markets, combined, will contribute over 90% of global population growth and global middle-class spending between 2017 and 2030.
India’s Great Potential
Many countries including those in Africa, the Middle East, Latin America and most of Asia-Pacific can be considered emerging markets but perhaps one of the most highly publicized emerging market due to its potential is India. According to the World Bank, India’s economy is expected to expand 7.2% for 2017.
India is set to emerge as an economic superpower thanks in part to its young population. In fact, according to Deloitte, India’s potential workforce is set to grow from 885 million to 1.08 billion in the next twenty years and hold above that for half a century.
Historically known for its highly regulated environment, recent years has found India introducing policies that are expected to transform the way business is conducted. However, examples such as demonetization and the introduction of its Goods and Services Tax have temporarily disrupted supply chains and the economy in general. But, according to Shobana Kamineni, president of the Confederation of Indian Industry, “What’s going to happen is a reorganization of the entire supply chain network — consolidation of formal retail, movement of goods — the entire transition is for the future, and that’s where GDP will kick up at least two points.”
Reorganizing India’s Supply Chain
India’s logistics costs make up about 14% of the country’s gross domestic product and as noted in an Economic Times article, Assocham Secretary General D S Rawat said, “Appropriate policy changes and opening up capacity together with increase in speed for transportation of goods and services through various modes viz., rail, road, water and others is imperative for the growth of cargo and logistics industry in India.”
Indeed, infrastructure remains a concern often resulting in delays and higher rates as well as poor visibility of shipment movements. Despite the healthy logistics competitive environment in the Indian market, the management of shipments continues to be problematic.
India’s technology startup ecosystem is rich with talent and experience. Too numerous to list all here, we did, however, have the pleasure of chatting with one of these start-ups, Freightbro, which is looking to make the management of freight shipments easier.
Founded in 2016, Freightbro has built a platform that allows forwarders to quote and manage rates for all modes of transportation. In fact, the company’s InstaQuotes has proven to decrease the cost of sales by 50%. Other components of the platform include InstaOps for procurement and vendor management and Open Dashboard for shipment status and e-docs management. Co-founder Anand Babu recently noted to YourStory, “We provide forwarders a competitive edge by converting them from a physical paper-led business to a digital forwarder without investing a fortune in technology.” Currently, there are 25 freight forwarders and customs brokers working from their platform.
By improving the efficiency of booking and managing shipments, Freightbro is helping to lead the way to reduce India’s high logistics costs and to set the country on its path to economic superpower.