Nowadays, many Indian companies operate globally, startups are targeting the Gulf markets because of the growing middle class and high incomes in the region. They see potential for growth by focusing on premium consumer segments in areas such as beauty, fashion, mobility, home services, and more.
For example, The e-commerce company Nykaa, an online retailer of beauty (cosmetic) and fashion products, plans to expand in the Gulf Cooperation Council (GCC). The company’s founder and CEO, Falguni Nayar, said that their e-commerce website, Nykaa, debuted in the United Arab Emirates(UAE) in October 2022, and could bring in revenue and profit more quickly than in other areas market regions. Nykaa also opened its first international physical store in Dubai in March.
Nayar pointed out the region’s great opportunities, including its high per capita consumption, strong interest in beauty, potential for fast growth, and the type of customers it attracts. The board of the corporation decided to spend an extra $1.9 million on Nysaa after approving a $2.5 million investment in the company in February. Meanwhile, BluSmart South Asia’s largest all-electric ride-hailing service and EV charging infrastructure network, a startup based in Gurgaon, is preparing to enter Dubai and aspires to compete with companies like Careem, Hala and Uber by launching a pilot program with a fleet of 100 Audi E-Tron SUVs.
Businesses who are currently operating in the area are beginning to witness the segment’s growth in scope and function as a driver of profitability. FreshToHome, an online retailer of fresh meat and fish, has had tremendous success in Dubai, Roughly generating about 13% of its revenue from there. Approximately 15% of the company’s current $130 million in annual revenue comes from the Middle Eastern region. Urban Company, a home services marketplace that expanded to the UAE five years ago, expects this area to become profitable soon. Twenty percent of the revenue generated by the dosa batter manufacturer iD Fresh comes from its operations in the area, which includes the UAE, Saudi Arabia, Oman, Bahrain, and Qatar.
Many experts believe that the large Indian community living abroad, the rapidly growing middle-class population, and high per-capita incomes are the main reasons for the market’s growth. They also mention the demand for premium products among consumers in these markets because consumers have more money to spend and want premium products in various categories. There is a significant market for native or domestic products due to the size of the Indian diaspora. Internal personnel can be moved to establish operations and stabilize the market for the first twelve to thirty-six months because markets are not too far away geographically. Furthermore, “these markets are abundant in the local Indian talent pool,” said Rishav Jain managing director at consulting firm Alvarez & Marsal.
A report by Tracxn shows that over 200 Indian startups are currently active in GCC countries, with at least 10 having established secondary headquarters or head offices there. Sovereign Wealth Funds (SWF) in the region have also shown increased interest in investing in Indian startups, An $120 million Series D funding round headed by Mubadala, an Emirati state-owned holding company that serves as one of the sovereign wealth funds of the Emirate of Abu Dhabi, was recently attracted to Avanse, an online lending platform that provides loans for education.