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12 January 2024
“Innovation is led by companies trying to maximize returns for their shareholders or users,” said Thampy Koshy, CEO of Open Networks for Digital Commerce (ONDC) in Delhi. “We are all familiar with ecommerce, but in India, the penetration rate is still small.” ONDC is trying to unbundle ecommerce platforms and expand innovation that encourages diversity.
According to How India Shops Online 2023, a report by Bain and Co., ecommerce accounts for only 5 to 6 percent of overall retail spending in India but accounts for approximately 24 percent of retail spending in the U.S. and over 35 percent in China.
“The internet is a great democratic organization. Websites are viewable by the whole world, and the traffic to my site will depend on the relevance of what I offer and how I innovate,” said Koshy.
Sridhar Vembu, founder and CEO of Zoho Corp, stressed the importance of innovation and IP generation, noting that innovative companies, excluding energy firms, are among the largest in terms of profitability. “Owning factories doesn’t generate most of the profits that are generated by owning the IP behind those products. Figuring out complicated ideas generates revenue,” he said.
But how can innovative ideas be generated and expanded? Emphasizing the profitability of owning IP, Bakulesh Khamar, executive director of Cadila Pharmaceuticals in Ahmedabad, highlighted India’s role as a major producer of generic drugs, constituting 70 percent of sales but only contributing 10 percent of total revenue.
“Innovation is either problem- or knowledge-driven,” he said, citing some recent examples. “Covid was the problem that led innovation, whereas, for something like Viagra, knowledge led to innovation and applications beyond its original intended use.” He also explained that innovation requires both teamwork and knowledge.
In addition, Jatin Trivedi, senior partner at YJ Trivedi & Co. in Ahmedabad, noted that India has seen a remarkable surge in the innovation environment, empowering innovators and entrepreneurs to protect their IP. “Innovative ideas must be transformed and scaled up into commercial products to succeed,” he said.
The panellists were speaking on the opening day of the 15th GIPC in Gurugram on January 7, 2024.
- Darren Barton
