Also in this letter:
■ Startups collective mulls legal steps against Google’s new payment policy
■ India a ‘bright spot’ while the world is in turmoil: SAP CEO Christian Klein
■ In 2022, online shopping increased despite rising footfalls offline: study
Upskilling startups are bullish even as K-12, test prep face hardships
Despite a downturn in the K-12 and test preparation sectors, online skilling courses provided by edtech startups have emerged as a positive development, as there continues to be a steady demand for reskilling.
Upskilling in demand: Founders of upskilling startups are anticipating strong growth in business this year even as a funding crunch has set in the broader edtech sector. Upskilling businesses mainly target working professionals who are either looking to move to a better pay scale or become more efficient at their current job. A flurry of layoffs across technology companies is prompting many to consider going back to school or take up courses in management, data sciences and digital marketing, industry experts told ET.
Optimistic of growth: Byju’s-owned upskilling platform Great Learning is expected to close FY23 with a 45-50% revenue growth instead of an initially planned 100%, while SoftBank Vision Fund-backed Eruditus, which partners with universities in India and abroad for its online executive education programmes, is aiming to grow its revenue by 40% in FY23.
Quote unquote: “They (working professionals) are looking at growth in the corporate ladder. With layoffs all around, they are coming back to the class to study for about 3-6 months until the markets clear up and there is scope to grow professionally again,” Sanjay Salunkhe, the founder and CEO of upskilling firm Jaro Education, told ET.
Startups collective mulls legal steps against Google’s new payment policy
Indian startups are exploring various legal options, including approaching the antitrust regulator, to challenge Google’s User Choice Billing system, which they termed a “violation of the CCI (Competition Commission of India) verdict,” sources told ET.
Exploring ‘avenues: Alliance of Digital India Foundation (ADIF), a policy think-tank, in a statement said it is exploring all avenues to challenge the said policy as it is a violation of the CCI order and the Competition Act
Catch-up quick: The CCI had last year ordered Google not to restrict app developers from using third-party billing/payment processing services, either for in-app purchases or for purchasing apps.
Quote unquote: “(The participants) brainstormed at length on the various aspects as a way forward in response to Google’s recent announcement of reducing the fee by just 4%,” ADIF said. “Despite not using any service from Google, app developers will be forced to pay commissions (11%-26%) to Google. The startup community agreed that Google’s non-compliance will impact the Indian startup ecosystem negatively.”
India a ‘bright spot’ while the world is in turmoil: SAP CEO Christian Klein
SAP SE chief executive Christian Klein in an interview to ET said India is thriving despite the turmoil in the world and is considered a winning and shining example. To capitalise on this trend and address concerns about supply chain concentration, SAP SE plans to double its investments in India over the next five years.
Klein, who is one of the youngest CEOs to lead a global technology company, expressed his belief that India will become an innovation hub for SAP as the company develops its core products locally.
Here are some edited excerpts.
How do you assess the global demand situation for tech spending, given rising inflation and geopolitical tensions?
I see Asia differently. India, to me, is one of the winners of the current situation because the economy is strong, talent base is strong. I feel a lot of companies are just looking to India when it comes to reducing their dependence on countries which are at risk of geopolitical tensions. So, India will be a winner.
Is SAP also looking at the India market as a de-risking option to offset slowdown from other global markets?
In India, we already have the largest R&D centre, but we will double down because the economy is strong. Now we have 15,000 people, is it realistic to say that in five years from now, we can double the size. The ease of doing business is getting better. That was also a big point during the meeting between Prime Minister Modi and our Chancellor (Olaf) Scholz, that the ease of doing business needs to be further simplified, but we are in a decent shape in addition to the strong talent base.
Market data say online shopping increased in 2022 despite Covid fears receding
Indian consumers have continued to buy online – a shopping habit that firmed up during the pandemic – with the share of online purchases in total consumption of smartphones, electronics, daily necessities and groceries increasing in 2022, according to the latest market data available.
Online first: Consumers continued to shop online last year despite retail chains and malls reporting complete recovery in sales and higher footfalls than pre-Covid period, latest data from market researchers such as GfK, Counterpoint Research, and IDC India as well as listed fast-moving consumer goods (FMCG) companies show.
Smartphones sale: For smartphones – the largest category sold online – Counterpoint Research estimates that ecommerce accounted for 49% of total sales last year, up from 48% in 2021 and 41% in 2019. US-based researcher IDC India estimates that online channels accounted for 53% of smartphone sales in 2022 against 50.2% in the previous year.
Quote unquote: “The shift towards ecommerce is permanent in technology products where decision makers are younger consumers and which are logistically possible to sell easily online,” electronics company Haier India president Satish NS said.
Tweet of the day
ET Ecommerce Index
We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.
Razorpay’s FY22 net profit up 19% at Rs 7.37 crore
Razorpay’s India entity’s net profit increased 19% to Rs 7.37 crore in the fiscal year ended March 31, 2022 (FY22), company filings sourced from business intelligence platform Tofler showed. Its net profit in FY21 was Rs 6.18 crore.
Revenue growth: Razorpay Software Pvt Ltd’s standalone revenue grew to Rs 1,485.6 crore in FY22, from Rs 844.6 crore in the previous fiscal year. Revenue through payment gateway and software maintenance services remained the key income generators. Revenue from operations for FY22 stood at Rs 1,481.1 crore.
Expenses: Expenses for the payment services company rose 76% to Rs 1,476.5 crore in FY22, compared to Rs 838.9 crore in the previous fiscal year. Employee expenses climbed to Rs 372.5 crore from Rs 212.9 crore in FY21.
Timing: Razorpay’s financial performance comes at a time when it has not been permitted to onboard new merchants, as RBI has asked it and rival Cashfree to undergo fresh audits.
Other Top Stories By Our Reporters
Wipro announced a new structure: Wipro announced a new structure on Monday, creating four new business lines – enterprise futuring, full-stride cloud, engineering edge and consulting. The new model will help the Bengaluru-based firm accelerate decision-making and sharpen its focus on cloud offerings, said industry experts.
Government launches Grievance Appellate Committee: The Grievance Appellate Committee that will look into users’ complaints regarding unsatisfactory grievance redressal by social media intermediaries was launched by the minister of state for electronics and IT Rajeev Chandrasekhar on Tuesday.
Global Picks We Are Reading
■ ChatGPT, Strollers, and the anxiety of automation (Wired)
■ Whoops! Crypto company Gemini is having some trouble with fraud (The Verge)
■ Chipmakers receiving US federal funds barred from expanding in China for 10 years (FT)