Startups use AI, omnichannel push to expand globally, reach deeper locally

Business Standard

6 hours ago

As India's startup sector enters a new phase of growth, a wave of emerging companies is turning to artificial intelligence, omnichannel distribution and the creator economy to reach smaller domestic markets and expand globally.
To mark World MSME Day, Meta has released a report commissioned from consulting firm Alvarez & Marsal India. The study draws on insights from interviews with 100 high-growth startups across the country.
It identifies six key levers expected to shape the next chapter of Indian entrepreneurship. These include AI adoption, cross-border expansion, omnichannel strategies, deeper reach into Tier 2 and Tier 3 cities, category diversification and creator-led brand building.
'In today's dynamic times, startups that think smart and act fast to evolve will lead the charge,' said Sandhya Devanathan, Vice-President, India and South East Asia, Meta. 'At Meta, we're proud to be partners in this journey, equipping startups with cutting-edge AI-powered tools to help them scale and turn their bold ideas into impact.'
Himanshu Bajaj, Managing Director and Head – Alvarez & Marsal India and GCC, noted that he is seeing a significant shift in how Indian startups think about scale — not just for pursuing growth but building more sustainable businesses that focus on value creation.
'AI, tiered expansion and omnichannel models are no longer future bets — they're foundational to execution today,' said Bajaj. 'What stands out is how early-stage startups are applying these levers with surprising sophistication.'
Over 70 per cent of startups are now integrating AI across core business functions.
'We leveraged these cutting-edge tools to optimise our marketing campaigns, and the results have been nothing short of phenomenal,' said Shrawan Daga, Founder, Krishna's Herbal & Ayurveda.
About 67 per cent of small firms have adopted omnichannel models to address modern customer journeys that span online discovery and offline purchase.
'Attributing online spends to walk-ins and offline conversions is the most critical aspect to driving an efficient omnichannel business while continuing to use digital as the primary advertising channel,' said Ayushi Gudwani, Founder, FS Life.
The report said nearly all startups are expanding into Tier 2 and 3 markets to cater to high demand and existing supply gaps.
'India's next billion consumers are not waiting to catch up — they're leapfrogging,' said Swagat Sarangi, Co-founder, Smytten. 'In Tier 2 and 3 markets, relevance isn't about scaling down your offering, it's about showing up with empathy, accessibility and trust.'
About 52 per cent of small firms are expanding cross-border, tapping into large addressable markets and global demand for Indian-origin products. The United States, the UAE and the United Kingdom emerged as the top export markets.
'We've successfully expanded our global footprint, achieving a remarkable 30 per cent higher ROI in new markets,' said Aakriti Rawal, Co-founder, House of Chikankari.
According to the report, 84 per cent of startups have diversified beyond their core offerings. They are leveraging synergies across product lines, customer cohorts and distribution channels.
'As Noise expands globally and enters new categories, our focus is on building performance-oriented smart tech that takes the 'Make in India' story to the world,' said Gaurav Khatri, Co-founder and CEO, Noise.
The report also finds that 88 per cent of brands now partner with creators — including niche influencers and celebrities — to build community-led storytelling.
'Working with creators allows us to tell real, relatable stories that build trust and emotional resonance,' said Suramya Jain, Co-founder, RAS.