Google Changes Game Plan in India to Accommodate Soaring Demand NEW DELHI—An exp
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Google Changes Game Plan in India to Accommodate Soaring Demand
NEW DELHI—An explosion of smartphone usage in India is changing the way Alphabet Inc.’s Google sees the future of the internet.
As a mobile price war in the South Asian nation has slashed data rates to less than $5 a month for unlimited high-speed access, hundreds of millions of people are getting online for the first time and bingeing, stretching their low-end smartphones to the limit.
The Mountain View, Calif., company rolled out several apps and functions Tuesday aimed directly at these net newbies and those like them in other emerging markets.
As online activity here has increased this year, the inexpensive smartphones used by many consumers have struggled to handle the surge. To help, Google has shrunk the file size of its mobile operating system and many popular apps. Users in India are frequently offline so Google has given them the ability to do more without an internet connection. Also, they are much more likely to get around on motorcycles than in cars so Google Maps has started offering suggested routes and travel-time estimates for two-wheelers.
“Over the last 15 months India has become a broadband nation,” said Rajan Anandan, Google vice president for Southeast Asia and India, at a launch event in New Delhi. “We know that this set of new users will need an internet that is very different from what you and I use.”
India’s telecommunications industry is in the midst of a data-price war. It started last year when Reliance Jio Infocomm Ltd., a new phone service backed by a local billionaire, began offering free unlimited 4G-speed data for six months. It continues to offer 4G at record-low rates, prompting competitors to slash their prices to stay competitive.
Data traffic per smartphone has advanced from less than 1 gigabyte a month in years past to more than 4 gigabytes now as Indians download videos and access social media in rising numbers. That traffic figure will likely shoot up to 11 gigabytes a month in 2022, according to the Indian Council for Research on International Economic Relations.
If Google can ride this wave in India, analysts said, the company will have the tools and knowledge needed to attract the next wave of internet users—the vast majority of whom will likely get online only through their phones.
India is “the notable example of a mobile-first internet market, in part due to its massive scale,” said Ishan Dutt, an analyst at research firm Canalys. “The rapid expansion of 4G coverage over the last year in addition to low-cost smartphones…makes it a favorable market to start delivering online services that are primarily catered for mobile users.”
Indians’ embrace of broadband could provide a windfall locally for Google, which makes most of its money globally from advertising.
Still, many new internet users have been flocking to Facebook Inc., a digital-advertising rival, and its popular messaging platform WhatsApp. The social-media giant in 2015 introduced a stripped-down version of its app aimed at emerging markets and many users here prefer the simplicity of WhatsApp, which requires only a mobile-phone number to use.
Indian consumers last year downloaded more apps from Google’s Play Store than users in any other country, knocking the U.S. from the top spot, according to analytics firm App Annie. In the most recent quarter, the amount of time Android phone users in India spent on YouTube more than doubled from a year ago, the firm said.
Google—which has been effectively shut out of China since 2010—is eager to bolster its user base in rapidly expanding emerging markets so it can maintain a hot streak despite slowing growth in developed countries, analysts said.
It is also introducing features and functions to try to match or pull ahead of competing apps—often from China—which have been popular with developing-market consumers who have budget phones and want to save money on data.
Tuesday’s offerings from Google were the latest in a long string of tailored features the technology titan has rolled out first in India. The company has previously launched a version of its popular YouTube smartphone app, called YouTube Go, that lets users share videos, and a mobile payment app that works without a credit or debit card, among other products.
Google said that the market challenges in India force the company to make apps and other features that are quicker and easier to use, paving the way for their rollout in other countries, including the U.S.
“We believe these [Indian] users are showing us what the global internet is going to look like in the future,” said Caesar Sengupta, a Google vice president, Tuesday.
Write to Newley Purnell at newley.purnell@wsj.com
1. What challenges and opportunities exist for smartphone companies in India?
2. How has Google modified its products to better serve consumer needs in India?
3. Why is it important for Google to be successful in India?
4. How can smartphone companies create a competitive advantage as they pursue sales in so-called mobile-first internet markets?
1. What challenges and opportunities exist for smartphone companies in India?
2. How has Google modified its products to better serve consumer needs in India?
3. Why is it important for Google to be successful in India?
4. How can smartphone companies create a competitive advantage as they pursue sales in so-called mobile-first internet markets?
Explanation / Answer
1. What challenges and opportunities exist for smartphone companies in India?
Challenges: The challenges that exist in India are a few, but the opportunities are multiple. While we will look at the opportunities later, let us focus on the challenges. The first key challenge for Google is to ensure that they ride the internet wave properly. India is going to see a huge rise in terms of number of mobile users (smartphones), owing to the slash in data prices, and also due to the country's booming population (youth). Google must ensures that it has the right apps and content to harvest this boom. It must also ensure that there is enough content tailored to India (for example, traffic conditions for two-wheelers), and in local languages wherever possible. They are likely to face challenges when it comes to translation to local languages as well.
Opportunities:
2. How has Google modified its products to better serve consumer needs in India?
3. Why is it important for Google to be successful in India?
This holds good not only for Google, but for most of the technology companies that are trying to make a mark in India. It is important to be localized in terms of product delivery. Google must understand that the needs of the market in India are vastly different than the needs of a market such as Australia or the U.S. Google must also recognize that India is a country where there are over 20 languages spoken, and hence it is important to make the apps strong by region as well (in terms of the language used). Google should ensure it understands what exactly the Indian consumer wants, and it should deliver what is required instead of adapting a standard global solution. Google has so far done well here as we have seen in the case.
4. How can smartphone companies create a competitive advantage as they pursue sales in so-called mobile-first internet markets?
Smartphone companies can create advantage by bundling data connections along with the device at attractive prices. For many buyers in rural areas, buying a smartphone is a completely new experience, and it is in fact a memorable event for their families. Many of them might not even know what type of a data connection they need to take once they buy a smartphone. In these cases, it would create immense competitive advantage if the smartphone company can bundle an effective, simple data plan for the consumer so that the consumer is already on the internet as soon as he/she buys the phone. Secondly, the smartphone company should also ensure that the content on the phone (OS and Language) should be in regional languages if possible - this will go a great deal in ensuring people use the full extent of the device's power, and are not limited by language.
1. What challenges and opportunities exist for smartphone companies in India?
Challenges: The challenges that exist in India are a few, but the opportunities are multiple. While we will look at the opportunities later, let us focus on the challenges. The first key challenge for Google is to ensure that they ride the internet wave properly. India is going to see a huge rise in terms of number of mobile users (smartphones), owing to the slash in data prices, and also due to the country's booming population (youth). Google must ensures that it has the right apps and content to harvest this boom. It must also ensure that there is enough content tailored to India (for example, traffic conditions for two-wheelers), and in local languages wherever possible. They are likely to face challenges when it comes to translation to local languages as well.
Opportunities:
- Huge population with the largest proportion of people <25 years of age in the country - this gives Google huge potential to harvest a lot of techsavvy users.
- There is a big opportunity to gather a lot of user data and demographic data
- Nearly the whole population will be connected to the internet due to low data prices - Google can now cash in on advertising revenues
2. How has Google modified its products to better serve consumer needs in India?
- Google has introduced traffic suggestions for two wheelers in India. This is unique and novel as in India, the roads are sometimes narrow and the width of the roads determine the time taken to travel - if you travel the road using a two-wheeler, you might do it in 1/4th the time as compared to a four wheeler. Considering the percentage of population that uses two-wheelers, this is an excellent suggestion and modification made by Google to cater to the local population
- Offline capability was introduced by Google for quite a few of its apps considering the fact that many people had issues with internet connectivity. Google introduced offline capabilities for many apps, including Maps
- Google customized and trimmed down the size of its mobile OS so that it can run smoothly on lower end devices
- Digital wallet (mobile payment) app which lets users transfer money without the need for a credit or a debit card.
3. Why is it important for Google to be successful in India?
This holds good not only for Google, but for most of the technology companies that are trying to make a mark in India. It is important to be localized in terms of product delivery. Google must understand that the needs of the market in India are vastly different than the needs of a market such as Australia or the U.S. Google must also recognize that India is a country where there are over 20 languages spoken, and hence it is important to make the apps strong by region as well (in terms of the language used). Google should ensure it understands what exactly the Indian consumer wants, and it should deliver what is required instead of adapting a standard global solution. Google has so far done well here as we have seen in the case.
4. How can smartphone companies create a competitive advantage as they pursue sales in so-called mobile-first internet markets?
Smartphone companies can create advantage by bundling data connections along with the device at attractive prices. For many buyers in rural areas, buying a smartphone is a completely new experience, and it is in fact a memorable event for their families. Many of them might not even know what type of a data connection they need to take once they buy a smartphone. In these cases, it would create immense competitive advantage if the smartphone company can bundle an effective, simple data plan for the consumer so that the consumer is already on the internet as soon as he/she buys the phone. Secondly, the smartphone company should also ensure that the content on the phone (OS and Language) should be in regional languages if possible - this will go a great deal in ensuring people use the full extent of the device's power, and are not limited by language.
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