India’s growing building industry looks to streamline the processes with digital solutions
By Suroopa Chatterjee
Technology is having a major effect on India’s real estate and construction industry, one of the economy’s major drivers. For example, B2B purchasing platforms are revolutionizing materials sourcing while architectural and design firms are making use of virtual showrooms, walkthroughs, and project tracking software. The government is also doing its part, working towards implementing an online building permit system in 2500 cities.
Recently, at the 13th Edition of the Confederation of Indian Industry (CII) Realty & Infrastructure Conclave 2021 organized with JLL as Knowledge Partner, Amitabh Kant, CEO of Niti Aayog stated that “the real estate sector plays a multiplier effect in the development of the economy and the ecosystem of the country.
The sector is expected to reach a market size of $1 trillion and contribute 18–20% of the country’s GDP by 2030.” He also stated that SEBI had approved REITs — or Real Estate Investment Trusts — which would create an opportunity worth Rs 1.25 lakh crore in the coming years. In addition, he mentioned that the real estate sector and its stakeholders would play a crucial role in supporting the government’s initiation of “housing for all”.
Furthermore, on October 21st, Housing and Urban Affairs Secretary Durga Shanker Mishra stated that technology will be crucial to the real estate industry’s growth and help “ease of doing business”. According to him, the online building permit system, implemented in 2500 cities, will become operational by March 2022.
Renu Sud Karnad, MD, HDFC Ltd stated that post pandemic technology had aided real estate developers in showcasing their properties online and had boosted the quality of walkthroughs. According to Sud, the real estate sector spends less than 1.5% of its revenue on technology. Technology also enables housing to become affordable. But for the execution of property documents, the buyer must be present in person, which remains a challenge.
Amidst the increasing advent of technology in all sectors, October also saw Infra.Market, a tech empowered B2B e‑commerce platform achieve unicorn status, reaching a milestone after almost six years of operation following its start-up in 2016.
With a background in infrastructure and construction, Infra.Market’s Co-Founder and director Aaditya Sharda tapped into the fact that the construction sector is unorganized. He decided to come together with his friend Souvik Sengupta, a chartered accountant, as an end-to-end construction solution provider taking the entire process of procurement onto a virtual platform, ensuring quality, classifying a vendor base, and establishing transparency in pricing.
All of this made this start-up the industry’s first tech platform in India according to Sengupta. The company is valued at more than $2.5 billion, backed by investors like Tiger Global Management, Nexus Venture Partners, Accel Partners, Foundamental, Sistema Asia Fund, Evolvence India Fund and Trifecta Capital Advisors.
Sengupta, having previously worked in the infrastructure sector, realized that although steel and cement were widely available across India, they made up only a small percentage of raw material for construction projects. While trying to source the remaining materials he saw the gaps in the entire construction supply chain, which was disorganized.
They realized the sector needed a complete platform that could simplify and promote access and usage of materials needed in the construction cycle. The duo then decided to launch their start-up in 2016 by infusing technology into the whole system. According to Sengupta their start-up leverages technology to give an enhanced experience in procurement to all players across the ecosystem.
The B2B ecommerce platform for construction materials introduced its own private label in 2020. The majority of these private label names have spread across almost all product categories in the sector, like Infra.Market Electricals, Infra.Market tiles, Infra.Market Sanityware, etc.
Sharda stated that their company has become the go-to partner for all building material requirements, especially during the Covid crisis when traditional supply chains were disrupted.
Competition within the construction industry is propelling architectural and design firms to embrace various strategies, digitization chief among them. Digitization has caused a reset and helped in distributing architectural services, ushering in a new trend.
Many platforms are available that allow engineers and architects to showcase their executed projects and profiles, thereby reaching a wider audience or customer base. Social media serves to ignite a company’s visibility, increasing demand through technology that allows the sector to offer customized design options.
The pandemic has increased the need for outdoor space, both private and public; as a result, residential units are incorporating rooftops and balconies. Architectural firms can now access a larger consumer base, drawing from homeowners, government contractors, schools, colleges, hotels, hospitals. And, the customers can also keep an eye on various stages of the project.
With real estate and construction predicted to increase in the next decade, it seems as if India’s fast-track towards digitization will be a boon to the industry. It remains to be seen if this trend will grow beyond the current level and spread across the sector.