This year India’s population hit 1.4 billion people, matching and then quickly moving past the population of mainland China.1 India’s population is expected to continue to grow for several decades while China’s population has reached its peak and has begun to decline. India’s large population growth will spur its economy, but it will also cause a massive expansion of consumer and industrial waste without significant transformation.
With these mega trends in mind, there is growing recognition that India cannot follow the conventional linear economic model of ‘take-make-waste.’2 India’s economy must become more circular.3
One way to make India’s economy more circular is through the adoption of circular platforms. A circular platform can be defined as a digital or online ecosystem that facilitates the exchange, trade, or sharing of products, materials, or assets with a focus on promoting circular economy principles. Circular platforms connect different participants in the circular ecosystem - manufacturers, service providers, recyclers, enterprises, customers. They often leverage technology like IoT, blockchain, AI/ML to enable connected products, traceability, optimization. While there are general circular platforms, many focus on specific vertical product categories, such as fashion, electronics or vehicles. Whether general or sector specific, platforms provide a variety of benefits, such as cost savings, sustainability, supply chain transparency, new revenue opportunities.
The Indian government is beginning to put in place regulations that will make circular marketplaces economic if not mandatory. For example, various news outlets have reported that government is considering introducing a mandatory quota of textiles made from recycled materials for its textile procurement practices.4 Circular marketplaces could make it easier for the apparel industry to meet these new regulations when they come into force. Going circular is also increasingly viewed a benefit to the Indian economy and not as a cost. Rural Development Minister Priyank Kharge stated last month: “If we play our cards right, India’s circular economy might generate an annual value of $218 billion by 2030.”5
Fortunately, we are already beginning to see the establishment of circular marketplaces in India. Some are in the early stages of seeking funding such as Simry, a recycling company that aims to build a marketplace to address the growing volume of vehicles that have reached their end-of-life. Obsolete vehicles in India are projected to hit 22 million in 2025 and continue to rise rapidly thereafter.6 The team at Simry plans to establish a circular marketplace to expand the capacity beyond its existing automotive recycling plants and create a dynamic ecosystem of buyers and sellers.
Recykal is further along in establishing its circular platform. Founded in 2017, the company has raised a total of $24M from investors such as Circulate Capital and Morgan Stanley India.7 Recykal has recently launched a new ‘Circularity Marketplace’ that helps companies connect with reliable and GST-compliant vendors of recycled materials. The goal is to onboard hundreds of suppliers of recycled material to help companies that lack access to high-quality recycled materials to meet rising consumer demand for more sustainable packaging.
Other circular marketplace in India include: Cashify, a marketplace for refurbish phones and other electronics, Ecoex and Polymer Exchange, digital marketplaces for plastic waste management services, and Coutloot, a peer-to-peer offline to online (O2O) social commerce platform that enables anyone to connect and sell items across the country directly to interested buyers.
Circular marketplaces currently make up a small part of India’s economy. However, we can expect this to change significantly with growing need, changing consumer behavior, technology innovation, and growing regulatory pressures to address mounting waste. With these tailwinds, the first mover circular marketplaces will surely grow in scale and potentially expand into adjacent markets. We can also expect new circular marketplaces to enter the market through the rest of the decade. Indeed, India’s shift to a more circular economy will require more circular marketplaces. These marketplaces must scale to support trillions of rupees in transactions to play the more significant role they can in supporting a more circularized India's economy.
To learn more about circular marketplaces, consider joining McFadyen Digital’s global multiclient study. For more information see: https://mcfadyen.com/solutions/circular-platforms-multi-client-study/