How serious is Google about India?

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Quartz carried an article about the number of Indians going online will outnumber Americans by 2015. Google’s India representative estimated  500 Millions Indians will be on internet in just four years from now.  Smartphones are being purchased at a feverish pace. McKinsey  has reported that in India "Mobile Internet usage is growing at the rate of nearly 85 percent per annum"

 Image courtesy World Bank 

The Quartz article also pointed out that tech companies like Facebook are only earning just 0.23% of its revenue from the 7% of its users who are in India.

Google is also not immune to this large-user-base-but-low-revenue situation. It is a common knowledge that the average Cost-Per-Click in India is often way below that in the US  (or in other developed countries). Even in US, Google is grappling with the low CPC mostly from the mobile users.

Just Adding Numbers is not enough

The issue is while the online traffic is exploding in India, internet enterprises generally expect the same business model to hold and revenues to scale.  However, transplanting a business model rarely works.

A better approach lies in aligning with the local user behavior and, in India's case, devise a way to work with the long tail.  This would require thinking away from a website centric approach to internet (text based searching maybe?)

Some Tech companies have begun experimenting with different models that would be better suited for India.

For example, Google’s strategy for reaching out to this rapidly growing number of internet users revolves around pushing more of low cost Android smartphones into the internet hungry population- the Andriod One.

But does that meet the demand directly?

McKinsey has found (in the same report referenced above) "...that 75 percent of non-voice usage being devoted to entertainment, where video and music streaming are major growth activities." 
Indian online users are big on media consumption, online research and, of course, spending time on Facebook.   Another report has come up with the following

Image courtesy Yourstory

While an Android platform will give Google leverage in the long run, but it will not necessarily  address the current user demand for entertainment and social networking.

Social over Mobile

Facebook appears to have taken a different approach that is resonating better with the customers.  Mobile carriers in India are selling cell phone plans that tout Days of Free Facebook time on the smart phone data plan.  The social networking giant has rolled out a service that does not require the users to purchase a data plan to spend time on Facebook.

A country where a significant share of rural population is still semi literate, a plan that is user friendly and talks in terms of Facebook and YouTube access would have an immediate attraction. I have heard youngsters in small towns ask for a Free Facebook plan while purchasing prepaid services.

Facebook has also reportedly optimized its ad services to run on relatively slower internet connection.

In contrast there are no plans from Google that people know about.  The search giant could easily offer free YouTube access on mobile phones to capitalize on the huge demand for “entertainment." 

Typically users in small town with no/sketchy internet buy 4-5 minutesof  music video clips or movie clips on SD cards for INR 20 ($0.34) to watch on their mobile phones. This market is ripe for Google to offer YouTube services at a low data cost. It is only recently Tata Docomo has launched a low cost YouTube access.

Or take for example Google’s GTalk. People love to chat and Indians are no exception (early adopters of WhatsApp) 

Users can immediately relate to and engage with plans that are centered around such services. Simplicity is the key when  trying to woo the large user base in India.

In India the long tail will be getting even longer as National Optical Fiber Network  kicks off in few years.