The India is expected to become one of the early adopters of IoT technology around the world. As a result the number of IoT connections in the country is going to increase 30 times and market size by 9 fold through 2020.

• Definition / Scope
• Market Overview
• Top Market Opportunities
• Market Drivers
• Market Restraints
• Industry Challenges
• Technology Trends
• Regulatory Trends
• Market Size and Forecast
• Market Outlook
• Distribution Chain Analysis
• Competitive Landscape
• Competitive Factors
• Key Market Players
• Strategic Conclusion
• References

Definition / Scope

• IoT or Internet of Things is a technology that consists of connected computing devices, digital machines, objects or devices provided with UIDs or (unique identifiers) and have the ability to transfer data collected through usage over a network (mostly cloud) without human or computer interaction. The IoT enabled devices are also known as ‘connected devices’ which are connected within an ecosystem and to the internet.
• The application of IoT can further be categorized into:
  • Consumer IoT applications: These IoT applications focus on the consumer segments. For instance, smart homes that are embedded with smart thermostats, smart appliances, connected heating, lighting and electronic devices that can be controlled remotely. Another consumer segment is wearable devices which are comprised of sensors and software and have the ability to collect and analyze user data, send messages to other technologies about the users with aim to make their lives convenient.
  • Industrial IoT applications: These are also known as IIoT or Industrial internet of things. There are various verticals across which IoT is deployed such as agriculture, automotive, transportation & logistics, utility, manufacturing, retail among others. For example, in agriculture, IoT based farming systems can help monitor various conditions such as light, temperature, humidity with the use of connected sensors. In manufacturing, the same connected sensor model is known as digital twin which is used in factories and plants to monitor productivity and efficiency.
• In India, both Industrial and consumer sectors are almost at par when considering the amount of devices installed and revenues of the IoT industry as a whole. However, the IIoT sector is expected to surpass the consumer sector in near future.
• Some of the scope of IoT use cases that can be leveraged across various sectors in India are as follows:

Manufacturing:

• RFID application along with WiFi to track productivity at factories in real-time
• Smart sensors and tools to manage processes such as measuring, drilling, tightening etc.
• Predictive maintenance to reduce downtime with help of sensors embedded to engines.

Retail:

• Using beacons to send real-time notifications to consumers about discount coupon or sale.
• Reinventing trial rooms using virtual and smart mirrors

Transport & logistics:

• Sensors that detect empty mailboxes
• Tracking devices that check temperature, packing conditions and location

Healthcare:

• IoT enabled clinical trial solutions
• Smart wearables that monitor heart and pulse rates.
• sensor enabled mobile devices to track or monitor patients and their clinical illness.

Automotive:

• Tires-as-a service to pay for tires on a kilometer driven basis.
• M2M cellular connectivity based on UBI (User based Insurance) for automobiles
• Incorporating vehicle related services through connected cars.

Agriculture:

• Detecting insects and pests through IoT device and scheduling release of pesticides
• Geo-fencing livestock
• Farm equipments, sensors, irrigation scheduling and pump control.

Market Overview

• The India is expected to become one of the early adopters of IoT technology around the world. As a result the number of IoT connections in the country is going to increase 30 times and market size by 9 fold through 2020.
• The market revenue of the IoT industry in India is going to be accounted by number of industries with 3 major industries accounting major share including, Utilities grabbing the highest share in IoT deployment at 25% followed by Manufacturing (18%) and Transport (13%) respectively. In addition, other key sectors include, automotive, healthcare, agriculture and retail among others.
• In India, the consumers perceive IoT differently; more than 36% of the consumers in the country associate IoT with smartphone followed by 14.5% for public services, 14.1% for smart homes or smart cities (11.4%) respectively.
• By 2022, India’s IoT market is expected to encounter growth in sectors such as manufacturing, production and logistics. In addition, more than 50% of India’s corporate leaders believe IoT to be important to remain digitally fit whereas 60% find it an important tool to gain competitive advantage in their businesses.
• Out of the 3.7 billion connected population in the world, 50% reside in Asia and of that 24% in India. Thus, India is one of the major countries headed for large-scale implementation of IoT projects. The prime contributing factor for this transformational shift is the changing dimensions of social groups in the country that regard connectivity as a need.

Top Market Opportunities

IoT in agriculture: In India, the agricultural sector engages more than 50% of the population in the country. The sector contributes high value to the country’s GDP and technologies such as IoT have the potential to create more improved output. As a result, farmers in India have already started using the precision farming technologies to monitor agricultural operations.

Only 14.5% of the consumers in India are hopeful of this technology creating major impact in the sector, however, IoT can have multiple applications such as better farm yield, better control over soil dynamics and achieve better harvest resulting in healthier citizens. Thus, IoT application stores huge potential to be leveraged in the sector.

IoT in homes: In India more than 54% of the households forget to replenish milk at least once or twice a month. The trend suggests that people are getting more than busier and don’t have time to restock their groceries in time. As a result, in a survey more than 75% of the consumers were tempted to purchase a technology that would restock their groceries automatically.

Besides groceries, another issue is FOLO (Fear of Lights on) where around 65.9% of the Indian’s worry that they have left the lights on. Around 91.1% of the individuals were interested in investing in technology that would help them monitor their home systems through their mobile devices. Thus, looking at the consumer interest in the sector, IoT has potential to sell applications across home management. 

IoT in public service: For people in India, IoT in public service means better connected ecosystem, more secure and cost-effective standard of living. As a result, healthcare is the major priority followed by reduced traffic congestion and lower pollution levels respectively.

Thus, IoT technology can be leveraged in these areas to improve public services in India. Within the healthcare spectrum, 81% of the consumers cited if IoT could help them store their children’s health records electronically and remind them automatically of routine interventions and receive automated reminders about vaccinations etc.

Market Drivers

Innovation and product offering: The IoT startups across India are investing in new segments that have not been explored by companies worldwide. As number of companies are increasing, they are catering to niche markets within consumer and industrial segments.

Further, this is augmenting the overall scenario of IoT in the Indian market and upcoming companies are already searching for niche segments to invest in, watching the success trend of existing players.

Improving customer experience: Rise of internet and smartphone penetration along with increase in number of tech-savvy customers in India is driving the usage of IoT application in India.

Increasing operational efficiencies: The product offerings of the companies across various Industrial segments is enabling efficiencies in operations of companies utilizing IoT solutions.

This is further encouraging other players in the market to leverage IoT solutions to gain energy, cost savings, increasing productivity and sales in their businesses. Thus, the demand for such IoT products is consistently increasing in India.

Market Restraints

Some of the obstacles that the IoT companies in India are facing are as follows:

Internet accessibility: Even through the penetration of smartphones and internet subscribers is increasing every year, Internet connection reliability and connectivity with high bandwidth are some of the obstacles in implementing IoT successfully.

In addition, the telecom companies are still trying to provide required bandwidth in rural areas. Thus lack of it is currently affecting the level of IoT consumer adoption in the country. 

IoT cost: In India, consumers are very selective about terms of investment in convenience and technology. Some products such as smart wearable fitness bands are present but not becoming popular as they are costly and Indian consumer market is price sensitive. Thus, this consumer IoT segment may remain in demand until a lower priced product is introduced.

Infrastructure challenge: Infrastructures that support the ‘smart’ concept of IoT is required which currently India lacks. For instance, smart power grids, Smart drainage/ sanitation System, Smart Water Supply etc. would require materials, equipments or facilities that can support the connection to internet and to other similar IoT enabled devices.

An investment to that extent is not possible in India and thus the IoT revolution is limited to 1.0 while the developed countries around the world are already moving to IoT 2.0.

Industry Challenges

Some of the major challenges of IoT technology in India are as follows:

Security: India has a vision of deploying more than 1.9 billion connected devices in the country in near future. As the connected devices inflates to this number, the chance to exploit safety vulnerabilities is also going to increase.

At present, IoT security is not a huge concern however in future to ensure security of these connected devices is going to become a major challenge. The low standard IoT devices have high chance to be infiltrated and that in return could risk people’s health and safety.

As there is lack of heterogeneity in IoT devices in the market, there is high risk of them getting exposed to security breaches.

Privacy: From the point of view of India, cloud computing is at a growing stage. As India is bolstering IoT initiatives, cloud technology also needs to be developed alongside to store data captured from use of IoT. However, risks are involved when doing so, the transmitting of data to cloud sometimes involves third party.

Thus, if the third party gathers this information, it imposes challenge for the legal and regulatory body to ensure data privacy and protection law. India, is faced with challenge to develop strategies for large scale IoT deployment to realize opportunities of IoT.

Standards: There are still no standards for configuring or operating IoT devices in India. As a result of that, low standard and cheap IoT devices can bring about undesirable outcomes for the network resources. As developers and manufacturers are not guided well, the devices can work in disruptive ways in internet.

Trained workforce: India is not quite at the forefront in this space. The IT professionals in India are reluctant to learn about new technologies such as IoT. Due to lack of IoT professionals, the implementation is not gaining the required momentum and even organizations are facing problems into shift to IoT systems due to lack of expert to train their employees on that aspect.

In addition, factors such as lack of awareness, inadequate infrastructure are further adding to the problem of talent gap. The specialized courses in IoT is also making it difficult to cope with frequent changes in hardware configuration and software updates. Finally, there are not enough skilled engineers who can build competent IoT architectures.

Technology Trends

Some of the technological capabilities that India has been developing in order to capitalize on IoT include following: 

• Sensors: The various types of sensors used across the industrial verticals include, acoustic, humidity, pressure/ vibration sensors, accelerometer, weight, heart rate & BP sensors, RFID sensors and tags.
• Augmented Behavior: In India, the use of advanced machines & robots from basic application to sophisticated applications is gaining traction due to entry of large number of tech startups in this space. Some of the applications include, warehouse automation, chatbots for IVR calls etc.
• Augmented Intelligence: Data collection through sensors is becoming seamless process for companies in India. However, intelligence to analyze that information is being consistently developed.
• Standards: Protocols such as WiFi HART, Dash, Dect, Continnua and LWM2M are being used in India.
• Networks: Most popular network used across India is Cellular technology. Lately, Bluetooth Low Energy (BLE) is also widely used for smartphone based connected devices and wearables.

Regulatory Trends

Some of the major policy and programs fueling the growth of IoT industry in India are as follows:

• Draft IoT Policy 2016: The IT department of Government of India namely, the Department of Electronics and Information Technology (DEITY) considering the Digital India agenda of the government, introduced this policy in 2016. The policy mainly focuses on laying a groundwork for governance and supports implementation of IoT related campaigns and programs. The policy is likely to play an important role in GOI’s vision to make India a $15 billion IoT market in near future.
• NCDP: National Digital Communications Policy (NDCP), as of 2018 amended policy has set goals to remove obstacles in communication and access to digital services in India. The goals been set by the policy is for 2022 year. The policy further creates a roadmap for emerging technologies in areas like IoT and its use case in improving efficiencies across various sectors.
• SCM (Smart City Mission): Another major initiative from the government is called the Smart Cities Mission (SCM). The government has already allocated $31 billion investment for building a total of 100 smart cities around the country. As of 2018, India has already completed 33% of the total 5151 SCM projects with utilization of 25% of the total allocated investment. Since October 2017, the projects implementation has further geared up registering increase upto 479%.
• IoT COE (Center of Excellence): This is one of the most significant initiative from the government to revolutionize Indian IoT ecosystem with modern infrastructure by facilitating network and IT hubs around the country. Currently, such hubs are present in Bengaluru and Haryana. CoE IoT aims to build “next wave” talent with incubation, funding, acceleration, networking and mentoring IoT startups and their programs.

Market Size and Forecast

• In 2018, the total IoT connections in the world was 7 billion which is expected to reach 25 billion by 2025 registering a growth rate of 17% during the CAGR period of (2019-2025).
• In 2018, the total IoT connections in the APAC region was estimated to be around 2.8 billion and is expected to reach 10.9 billion by 2025. As of 2018, APAC region is leading in number of IoT connections.
• In India, the IoT connection was estimated to be around 60 million in 2018 and is expected to reach 1.9 billion by 2025 registering growth rate of 137% during the CAGR period. Further, the market size of IoT in India was $1.3 billion in 2018.

Market Outlook

• By 2025, the market size of IoT technology industry around the world is expected to be around $1.1 trillion. APAC region is expected to lead the world in both metrics: number of connections and revenues.
• The Indian market is expected to reach $9 billion in market size by 2025 registering a growth rate of 62% during (2019-2025) period.
• By 2022, India aims to have 5 billion connected devices. Further, supportive IoT technologies such as 5G, AI, robotics and cloud are also in line for development. The government of India is also set to simplify the regulatory and security frameworks for the IoT applications.
• By 2021, India is expected to build hundred smart cities along with 2500 additional projects worth over $305 million under operation.

Distribution Chain Analysis

• The consumer segment IoT in India accounted 45% of the revenues whereas, the industrial segment accounts 55% of the total revenues in the industry in 2018.
• Similarly, as of 2018, 60% of the IoT devices deployments has taken place in the industrial sector followed by only 40% in consumer IoT segments.

Competitive Landscape

• In India, as of 2018, there are around 120 IoT firms with necessary IoT technical skills making India one of the large countries for large scale IoT deployment.
• By 2020, the companies catering to Industrial IoT is going to surpass the number of companies in consumer IoT space.4
• As of 2018, 60-65% of the IoT companies in the Indian landscape were the start-ups. Since 2014, more than $60 million investment has been made in innovative IoT solution startups.
• More than 70% of the companies in the landscape have emerged since 2013 only with average life of the companies being less than 5 years. Healthcare and manufacturing sector is attracting investments in IoT. Some of the companies operating in these segments include, ThingsCloud, Doxper, SeeHow, Uncanny Vision, and IoT Pot among others.
• Similarly, in consumer IoT segments, due to lifestyle becoming more connected, companies are evolving in wearables and home systems/management space.
• Along with IoT companies, Cloud computing and data analytics is also receiving investments as these technologies are drivers of IoT.
• By 2020, it is expected that more than 50% of the IoT market in India will be garnered by application vendors, 20% by network operators, 20% by system integrators and 10% by hardware vendors’ respectively.

Competitive Factors

• In India, IoT industry is just about 5-7 years old and is contritely growing due to long sales cycle. As of 2018, top 40 IoT companies in India had only annual revenue excess of $50 million. All of these 40 companies have been successful in raising money with 28 of them raised $67.6 million in VC funding.
• The IoT started gaining huge traction in India after Qualcomm Venutures and Cisco invested in $43.3 million in Ineda Systems, a Hydrabad based system-on-chip design Company.
• Some IoT companies in India are already creating innovative solutions. For instace, a wearable i.e. ring developed by Lazy Co. understands a person’s daily patterns and habits. The ring can connect to a coffee machine and guide it to make a cup of coffee ready by 8 am, in addition it can also book a taxi for pickup.
• In Industrial IoT front, big data IoT stack, Stellarapp’s “Smart Moo” is used across dairy industry to track the health of cows and manage the milk supply chain. Since 2018, the company has almost doubled its revenue to $210 million. However, the company was just founded in 2011. After Stellarapp, the second largest IoT Company is India GoQII had gross revenues of $110 million in 2018.
• On the consumer side, IoT businesses are mostly focused on wearable devices, smart grillers, smart fridge, smart cars and smart home segments. In India, an average werable device price ranges from $20 to $1000.
• Some of the companies such as GoQII are also charging consumers for a special coach on yearly basis that teach them to best utilize the IoT. The proliferation of Alexa and Google Assistant in the Indian IoT landscape also suggest how IoT ecosystems are coming together.
• The ability to invest in innovation in India is still low in comparison to global context, however lately the scenario is changing with entry of players such as Syncontext, an IoT company that utilizes sensors to enable employees or companies to use buildings intelligently. The company is worth $500,000 with 20 clients since its incorporation 7 years ago.
• The agricultural IoT is also gaining momentum in the country. In North Karnataka, more than 5000 farmers are using Mahindra’s tractors. These tractors are connected and data from each one helps the Mahindra Company understand how they use these tractors. The benefits are numerous, for instance, the failure of any part can be predicted before it breaks down and there are alarms equipped in the vehicles to alert farmers about need to fuel.

Key Market Players

Some of the major IoT companies in the Indian landscape are as follows:

Stellapps: It is one of the top IoT companies in India and number one in terms of revenues earned. Banglore Based Stellapps offers end-to-end dairy technology solutions. The startup company produces comprehensive farm optimization and monitoring solution to help dairy farmers maximize profits. The company’s platform-SmartMoo is an IoT router and in-premise IoT controller that acquires data through sensors embedded in milking systems, animal wearables, milk chilling equipment and milk procurement peripherals.

Zenatix: Founded in 2013, Zenatix is a data-driven energy efficiency company that leverages advance machine learning models to provide significant energy savings for large commercial consumers of electricity. The product offering of the company called WattMan helps save businesses upto 30% of their energy bills.In April 2017, the company raised about $1 million series A funding led by Pi Ventures.

Ecolibrium Energy: The Ahmedabad based company was founded in 2011 and provides energy intelligence to commercial and industrial consumers and utilities. The big data analytics platform of the company intends to improve operational efficiency by optimizing energy usage and asset utilization. The company currently provided energy analytics to big companies such as Coca-cola, Delhi Metro Rail, Intas Pharma and Fiat. In July 2018, the company raised almost $2.6 million in funding fromInfuse Ventures Inc.

Smartron: The Company was founded by ex-Intel and co-founder of Silicon Valley Startup Soft Machines. The company provides an intellegenct connected platform, TronX, offering highly customized experiences, services and care through next-gen smart devices. A tough competitor to Chinese company Xiaomi, the company raised $40 million funding in 2018 from investors in US.

Carsense: Mumbai based Carsense is an IoT startup offering car diagnostic solutions. The company is currently operating in car security space by deploying GPS, accelerometer, gyroscope and Bluetooth. The company is among the early entrants in the space and has already listed its products on several ecommerce platforms such as Amazaon and Techtron.

Covacsis Technologies: founded in 2009, the IoT startup has designed a framework by which the operational and financial efficiencies of the factory can be tracked in real time. The framework is known as Intelligent Plat Framework(IPF) which is used by manufacturing companies of sectors such as textiles, pharma, cement among others. So far the company has received a total funding of $3.5 million.

TerraBlue XT- founded in 2015, the company is aimed at building a complete health ecosystem for the benefit of people worldwide. Its solutions are called TJay and Xaant. TJay is an innovative solution for prediction and management of brain diseases whereas Xaant is a wearable therapeutic device that traces the mind’s condition and generate real-time data. the company is further backed by GOI’s Department of BioTech, department of ITBT and IIM Ahmedabad Entrepreneurship Cell respectively.

Bharati Robotic systems: The Company is a Pune Based IoT robotic solutions in cleaning and material handling equipment such as scrubber and sweepers. Initially incubated at Intel India Makers Lab, the company has already raised a substantial undisclosed amount of funding from various companies.

Hug Innovations: The Company is Hydrabad based IoT wearable producer called Hug Smartwatch that employs gesture control for various activities like playing music and so on. In addition, it has multiple other features such as tracking food/water intake, calories burnt etc. The device also has a SOS button that could be pressed if the person is in danger. In 2017, the company raised almost $5 million in Series A funding from a funding event organized by TiE Hydrabad.

Cyclops Medtech: In 2015, the company was established and is offering IoT application for vestibular, surgical and eye-tracking solutions for the masses. Its platform called Cyclops Balance Eye is an assessment tool that covers hardware, software and ML modules on cloud. Initially, the company was incubated at the Biomedical Innovation Centre at BMS College of Engineering, Bengaluru. The company further aims to create more number of innovative cost-effective medical technology devices which can diagnose diseases easily and aid better cure.

Strategic Conclusion

Expert researchers around the world believe that the market potential of IoT in India would rise only after 2020. The government of India seems to have an overambitious objective to develop the Indian IoT market to $15 billion by 2020 up from only $1.3 billion in 2018.

In addition, the companies in the IoT landscape are not being able to define, govern, run, design and fund IoT implementations which is likely to slow down the growth of market in the country. At present, what the startups lack is the ability to handle different geographies, networks and industries present in the market.

At present the consumer adoption of IoT is low so the scope of the business lies in industrial IoT where companies focusing across various verticals will likely to gain success in near future.

References

1. https://internetofthingsagenda.techtarget.com/definition/Internet-of-Things-IoT
2. https://www.wfeo.org/wp-content/uploads/stc-information/L5-IoT_Business_Opportunities_and_Challenges-by-J_Shah.pdf.pdf
3. https://www.ey.com/Publication/vwLUAssets/EY_-_Future_of_IoT/$FILE/EY-future-of-lot.pdf
4. https://www.tatacommunications.com/wp-content/uploads/2018/02/IoT-Report.pdf
5. https://pharma.cioreviewindia.com/cioviewpoint/challenges-of-implementing-iot-internet-of-things-in-india–nid-3560-cid-1.html
6. https://www.researchgate.net/publication/326929378_IoT_Challenges_and_Issues_in_Indian_Perspective
7. https://yourstory.com/2018/08/indias-iot-started-slow-time-pick-pace
8.  https://inc42.com/features/watchlist-iot-startups-2018/