Why Service-Based Startups Are More Successful In India?

Vibhavari Madki Vibhavari Madki
Aug 26, 2021 7 min read
Why Service-Based Startups Are More Successful In India?

Many service based startups in india are establishing their place in the market, this is mainly because many of the new ideas have worked flawlessly for consumers. And that is why India is currently one of the fastest-growing startup ecosystems. Service-based Startups are ruling the market as compared to product-based ones. Examples for the top service startups in India are Flipkart, Quikr, Sulekha, Ola, Yatra and POPxo.

India is also the third-largest startup ecosystem after the US and the UK. The liberated economies and affordable technologies have made it possible for the new age entrepreneur to compete with the already established players.

The service oriented business in india is the fastest-growing sector, as it contributes significantly to the countryโ€™s GDP growth, employment, trade, and investment. In the Indian service based business, e-commerce takes the major share of the pie. According to the Morgan Stanley Research the country's e-commerce market was estimated to increase from $102 billion to $119 billion by 2020.

On the other hand, there are not many success stories when it comes to product-based startups. A few names that occur to us and which have made some inroads into the Indian startups market share, are Micromax Informatics, a leading consumer electronics company. Gecko, a device that works as a key finder and Goqii, a fitness tracking wearable.

Reasons for why Service-Based Startups are more successful?
How Indian Startup Culture Differs From Others
Some Successful Service-Based Startups in India
Frequently Asked Questions

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Reasons for why Service-Based Startups are more successful?

Indian Startups are known to have a greater advantage with service-based business. Here are some of the reasons why service-based startups are more successful and survive longer in India.

Growth in the number of Startups Registered in India
Growth in the number of Startups Registered in India

Low Capital Costs

Manufacturing and selling a physical product involve a heavy capital investment, time, and energy. It usually requires taking a bank loan or securing funding from investors.

On the other hand, there are little to no startup, overhead or manufacturing costs involved in service-based startups. A founder can start a setup (from his home or garage), with a few or no employees, and build his reputation through word of mouth marketing. Service based business only needs a small set-up and does not require a huge capital infusion, he can even bootstrap his business.

Faster to Launch

Service-based startups can get a business off the ground and start earning revenues earlier. The service startups need to define their service, find customers, listen to their requirements and start delivering the service. The product based startup ideas take a lot of time and resources to conceptualize, design and create the product.

Lower Business Risk

Every business is prone to some risk, however, service based business in India face fewer risks. A customer who's paying for a service usually knows his requirement, hence there is no guesswork involved, and hence, lower risk. You are selling the service and billing for a specific skill or expertise you already own. And, in service based business customers are committed to paying before you even start working.

Flexibility and Adaptability

Furthermore, a service based startups are much more flexible and adaptable. Not only you can work from wherever you want, but you can easily make adjustments and customize your service as per an individual clientโ€™s needs. For example, If your client isnโ€™t too happy with his website or campaign, you can make changes according to their feedback in real-time. Product based companies in India find it much more difficult to improve or modify, as they may need testing, licensing and re-manufacturing.

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How Indian Startup Culture Differs From Others

With the emerging business opportunities in India, The world biggest startups are no longer just in America or China. There are numerous successful startups in india, which has made the country a leading global startup hub.

The number of startup companies in India has grown from 7,000 in 2008 to 50,000 according to the latest report by KPMG. The growth of startups in india is significant, but there one primary difference between Global and Indian startups, and that is funding. Itโ€™s quite easy to get going in India, but the problem lies in the later stages where funding becomes more troublesome leading companies with no choice but to get international venture investors.

Highest valued startups in India
Highest valued startups in India

Some Successful Service-Based Startups in India


Zomato is an online restaurant search and discovery app, providing in-depth information about 1 million restaurants across 23 countries. It is one of the successful service based startups in India. It is used by consumers globally to discover good food, rate, and review restaurants, as well as create personal networks of fellow food enthusiasts for trusted recommendations. This service startup was launched in 2008 covering over 331,200 restaurants in 19 countries.

In addition to restaurant search and discovery, Zomato has expanded its offering to include transactions like Online Ordering, Table Reservations, and Point-of-Sale system, creating cutting-edge technology to connect restaurant businesses and customers in ways that will revolutionize the restaurant industry.

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Practo is a health tech company with the motto of #DoGreat is prospering greatly with 2,00,000 doctors and 20 million patients across the world. This service based startup, kick-started its journey in the year 2008 from Bengaluru by two NITians Shashank and Abhinav Lal.

Practo is the perfect example of โ€œIn the middle of difficulty lies opportunityโ€ because the idea of PRACTO was initiated from the difficulties Shashank faced concerning his fatherโ€™s health. It is a successful startup in India because of its numerous unique services.

Practo, is a product of Naabo solutions, which became the Home for health by its hassle-free solutions for doctor appointments, delivery of medicine at the doorstep, online consultation with their registered doctors along online appointment booking software for doctors to manage their clinics.


Rentomojo is a service oriented business in India that was started with the idea of providing online rental services for furniture (for 3 months) in 2014. This service based startup was started with the aim of providing their consumers with the ever-evolving style without the actual investment costs for furniture.

The service startup was funded by IDG Ventures India and Accel partners initially and in 2017, the company gained $10 million Series B funding from Bain Capital Ventures and Renaud Laplanche.

Rentomojo expanded its business to renting two-wheelers and appliances in 8 cities with an option of Rent-to-own model by the year 2018. Rentomojo is offering new services in india like cleaning annually, free maintenance with the subscription, swap products.


When it comes to the product based vs service based startups, the success rate of product-based companies is very low than service-based companies in India. The ideas of some of the top Indian startups are quite out of the ordinary.

If one wants to create the most successful startups in india, one needs to think outside of the box. Service startups in India have to keep up with their competition. Their startup ideas should be unique, which always attracts customers and brings forth profit.

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Frequently Asked Questions

What is the difference between product based and service based company?

Product based company creates or designs their products or application in advance even before clients approach them. Whereas a Service based company works only when a client approaches them with specific needs or requirements.

What are service-based startups?

Service-based startups can get a business off the ground and start earning revenues earlier. All they need to do is define their service, find customers, listen to their requirements and start delivering the service.

Which Indian startups are profitable?

The indian startups are profitable, the cpountry has many unicorm companies like Byju's, Swiggy, Oyo Rooms, Dailyhunt, CureFit, FirstCry, Eruditus, Snapdeal, PharmEasy, boAt, Licious, Myntra, Blackbuck, Rebel Foods, BharatPe, Pepperfry, etc.

What service are high in demand?

Services like box subscriptions, freelance copywriting, design, IT and cybersecurity consulting.

What products are in demand?

The products that are most in demand and selling online in India are apparels, mobile phones, books, consumer electronics, footwear, jewellery, etc.

Is India good for startup?

To promote growth and help Indian economy, many benefits are being given to entrepreneurs establishing startups.

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