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A goal at EPIC World is to profoundly understand Entrepreneurial Households and provide the insights required to build enduring businesses serving their core needs. One important aspect of this involves understanding their true economic activities. While traditional metrics like gross income offer some insights, they fall short of capturing the whole picture - especially for a segment such as this which is dynamic and has multiple sources of income.
It was clear we needed a new measure of their economic vibrancy. And the root of that lay in transactions, not income. At first blush, this might seem like an insignificant difference. So let's dive a little deeper into this audience.
Understanding Entrepreneurial Households
Entrepreneurial Households are defined by their economic resilience, innovativeness, and generation of multiple sources of income. They consistently invest in their own growth - frequently spending on financial services, healthcare and education. This complexity means that assessing them solely based on incomes or discretionary expenses distorts the real picture. By considering both cash inflows and outflows, we can fully grasp their economic activities and the business opportunities they present. This vibrancy is quantified by Core Transaction Value (CTV), a metric developed by EPIC World to demonstrate the economic potential of this segment.
An Entrepreneurial Household's economic resilience stems from a variety of income sources. Fixed incomes provide stability. Variable incomes offer flexibility and leverage, akin to a shock absorber, and cushion the household during tough times. On the outflow side, Entrepreneurial Households view core goods and services not as expenses but as investments in the growth of their businesses or their family’s upward mobility.
These cash flows, often exceeding their household income, underline why CTV is a more accurate metric for market size and business opportunities with Entrepreneurial Households.
CTV provides a clear window into the economic power of Entrepreneurial Households
A combination of factors makes the current time ripe for CTV growth in India, making Entrepreneurial Households a potentially lucrative audience for entrepreneurs and capital allocators. They are increasingly well-connected digitally and physically, have an enterprising and aspirational mindset, making them ready for significant investments. Historically, this segment has been overlooked by formal markets, yet the opportunity for high-quality formal businesses to build strong new brands in this segment is immense.
Elevar’s portfolio exemplifies this: Nuvemshop boosts the inflow side by aiding small family businesses, while Sarvagram and Samunnati address, among other offerings, capital and working capital needs in rural India. On the outflow side, companies like LEAD and CureBay provide essential services like education and healthcare.
Why CTV trumps discretionary spends
Viewing Entrepreneurial Households through a discretionary income lens might suggest limited market size. CTV reveals a different reality: a multi-trillion dollar market already transacted annually. This insight opens the door to building unicorns, decacorns, and hectocorns focused on this vibrant segment.
CTV not only reveals a massive market but also signifies an opportunity for businesses to grow at a significant rate for decades. By understanding this segment through the lens of CTV, we grasp a generational opportunity, a rare inflection point in economic history. We term this the EPIC Opportunity, and have detailed it out in our Report.
CTV by the numbers
Through the research done by EPIC World in partnership with Praxis, it is estimated that the combined value of India's ~250M Entrepreneurial Households will grow at a CAGR of 12.7% over the next 20 years, reaching ~$100 Trillion by 2043. Details of this metric's calculation - and indeed, how this segment will be crucial to India's growth over the next two decades - are detailed out in the EPIC Opportunity Report.
The time to build for this segment is now.