From enabling small shop owners in markets like Chandni Chowk of Delhi to get online to capturing the smartphones market with its open platform Android, Google is all set to play a big role in India’s Internet market.
The company believes 2013 will be a ‘great year’, which will be a launch pad for 2014 with more people getting into the Internet. Business Line spoke with Rajan Anandan, Vice-President and Managing Director – Sales and Operations, Google India, to know how the Internet giant is gearing up for the data explosion. Excerpts:
How was the year 2012 for you and the online industry as a whole?
The nature of the Web has changed over the last 12-15 months. The growth in categories that are useful in day-to-day lives like education, automotive, travel, e-commerce, finding places – has grown exponentially. Overall, while personal computers have grown by 62 per cent, mobile devices have grown three times and this mix (online, mobile, desktops) has changed dramatically. There have been gradual changes in percentages, we saw mix change and slow, but in 2012 it was just a boom because 25 million people transacted online, 70 per cent people who bought cars searched online before buying them (the numbers used to be zero three years ago) and number of students also used online. Looking at all these trends in 2012, we see the establishment of a utilitarian (utility powered) Web.
Do you see this as a trend or a one-off development this year?
No, I think what’s happened is that the Indian Internet users have very quickly realised what they can use the Internet for. Lot of them have obviously driven by supply side. For example, if I couldn’t buy a book, no one will search for a book. But, now I know I can buy books, phones and search for restaurants online. I think what’s really happened this year is that Indian users have become aware, not that a large number, but they are using it for those purposes. Consumers’ behaviour has changed a lot.
Do you see such similarities in the developed markets?
The developed markets obviously are different. In the US, there is a billion dollars of activities on e-commerce everyday, but here the whole year is around $9 billion. Obviously we evolved, but what is surprised us is how quickly this is happening. In the US, Internet has been around for 17 years now, e-commerce was a mainstream there before the year 2000 and companies like Amazon went public in 1997. So, all these things are around for long in the US and what is surprised us here is the taste of change. So what has happened in 15 years is going to happen here in next five years. The pie-chart keeps changing and it is a staggering change year over year.
Do you think the way broadband penetration is happening here would help in that scenario? Are you happy with that?
I think we have very little broadband in India. But, what I am looking forward to in 2013, is the broadband. It will change from what is there right now. There are 150 million Internet users today and it will double by end of 2014 as 4G is rolling out from middle of 2013 and it will take six-seven months to get started. Just like telecom revolution happened, same thing will happen for the Internet world once the 4G rolls out.
How is your partnership shaping up with telecom companies like Reliance Communications?
We had partnership for Android. There were only around two million smartphones back in 2011 and less than a million on Android. Now, there are more than 27 million smartphones and next year it will be over 50 million. So, that was actually a very Android-specific partnership. Again, you will see lot more of such things from us as we are trying to encourage consumers to get smartphones. The average Indian who has a smartphone spends 72 minutes of a day on mobile Internet, which is almost 10x more than a feature phone user.
What’s your personal take on pricing of smartphones? Are you happy with existing price points?
I am never happy. Happiness is state of mind and I hope I am never happy. We have 1.2 billion people and only 150 million people on Internet, so we can’t be happy. We think the magic price in India is Rs 3,000 for a smartphone. In 2014, two things will happen – smartphone will equal feature phone and broadband will scale. I think 2013 is the foundation year for 2014. What we have is Android and that is why we work with device companies, carriers and you will hear from us when we do more things with both carriers as well as original equipment manufactures. That is our play, but we don’t want to be a telecom player at the same time.