Namaste India

Flipkart was in the news recently because it raised $1 billion in funding to fund its expansion plans and to fight the competition. A couple of days after that, Amazon announced that it was investing $2 billion in its India operations.

Why all the interest in the e-commerce market in India? Mostly because India’s smartphone ownership (and hence, Internet access) is rising. All that translates into a huge opportunity. When we visited Goa, I remember our hostess telling me that people even in remote places can now get things whenever it is available, thanks to Flipkart. No wonder that Flipkart said its sales had just hit $1 billion since it was launched. Amazon’s CEO, Jeff Bezos, said something similar:
“At current scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross sales.”
Online spending in India is expected to hit $8.5 billion by 2016.

So how many smartphones are being sold in India? This year, a whopping 225 million smartphone sales are expected. Unlike the West (and China), in India, the telecom carriers don’t subsidize the cost of the phone. And so, the number of people willing to buy an expensive phone like the iPhone is quite small. Apple is loath to create a cheaper iPhone; so it changed its strategy in India to:
Lower-cost iPhone = old iPhone
That’s “old” as in older version. Imagine that: even Apple has to come up with an India specific strategy these days!

Even Google, a company with 97% market share of search in India, has to adapt to the fact that mobile now accounts for 62.5% of Internet traffic in India. On your phone/tablet, you rarely go to the browser to type “google.com”. Instead, you use activity specific apps for everything: weather, news, movie reviews, shopping. And that means, fewer searches on your mobile via Google. And that’s why, says Himanshu Gupta, Google launched its ads in India, to let users know that Google will provide them:
“newer integrated services such as flight information and weather in display card forms”
And that:
“Google will take care of all the information you need, whenever you’ll want it wherever you’ll want it — you don’t need to install or open that Weather or OTA (online travel agents like MakeMyTrip, ClearTrip, Goibibo) or maps app on your smartphone.”
Unlike Apple, Google’s problem with the world switching from desktop to mobile is not unique to India. But the ad was needed in India to target the millions who would never have accessed the Internet via a desktop and will be doing it for the first time via their mobile devices, mostly Android devices.

Everyone’s coming to India; and even adapting their strategies where needed.

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