Powerful shot-in-the-arm for Indian digital ecosystem: Experts on Google’s $10 bn push
- Google & Alphabet CEO Sundar Pichai’s announcement earlier this week that the tech giant will invest over Rs 75,000 crore ($10 billion) in India over a period of 5-7 years as part of the India Digitisation Fund has the digital ecosystem in the country all excited. Pichai had also said that the investment would be made through tie-ups and equity investment, making it the biggest investment in a growth market.
Speaking at the virtual address, Pichai had further said that the latest move was a reflection of the company’s confidence in future of India and its digital economy. He added that the investments would focus on four key areas of India’s digitisation:
- enabling affordable access and information to every Indian in their own language
- building new products and services relevant to India's unique needs
- empowering businesses as they continue to embark in digital transformation
- leveraging technology and Artificial Intelligence for social good in areas like healthcare, education and agriculture
Adgully spoke to a cross-section of digital experts to understand how Google’s massive investment in the Indian digital ecosystem will give it a major boost and what it means for the start-up ecosystem as well.
Lloyd Mathias, Business Strategist and Angel Investor, is not surprised about Google’s decision to invest $10 billion in India over the next 5-7 years through the India Digitisation Fund. He said, “Given that Internet penetration is reaching the bottom quartile of the world population, and given that China is pretty much out of bounds for Google, any expansion plans will depend on Google getting a sizable share of the adoption of digital services in India.”
He also felt that this reflected FOMO among global players, which was sparked by Reliance ‘monetising’ Jio platforms and getting Facebook and large global funds to invest in the next billion into India’s digital economy. “With Amazon already deeply entrenched, and Facebook’s deep presence through being the largest social network and messaging app through WhatsApp besides the stake in Jio, I think Google is signalling its desire to be in the thick of things,” Mathias opined.
It may be noted here that Google will be investing Rs $4.5 billion in Jio Platforms for a 7.73 per cent stake in the telecom network, as announced by Mukesh Ambani, Chairman, Reliance Industries today (July 15, 2020).
Benedict Hayes, Executive Director & Joint MD, Ethinos Digital Marketing, believes that this is a massive opportunity for the growth of the Indian economy. Despite having one of the largest Internet populations in the world, the penetration is still lower than many large economies. Tier 2 and vernacular users represent the largest share of Indians, and are currently out of the fold when it comes to digital and innovation. “With new products from Google focused on non-Metro centres, we will see an explosion of internet user growth from ‘Bharat’,” he said.
This will also be a great opportunity for the unorganised sector and mass consumer brands, who can now reach, communicate to and engage with a larger consumer base, deliver locally relevant experiences and enable digital buying experiences outside Tier 1 cities. Retail, Education and Financial Services will be some industries that will reap great benefits, according to Hayes.
On the other hand, with Google committing to invest in products built out of India will empower Indian start-ups and SMEs to build innovative products as well. “We are looking at a very exciting decade ahead!” exclaimed Hayes.
For Digital & New Media Consultant Sanjay Trehan, Google’s $10 billion investment augurs very well for the digital ecosystem in India and shows that the search behemoth is keen to play a responsible role in evangelising Internet adoption in one of the most exciting and largest markets in the world.
The investment is also focussed on creating enabling access infrastructure in Tier 2 and 3 towns and rural India and in regional languages, and will give a great fillip to digital literacy and faster digital adoption in India that is Bharat.
According to Trehan, “The sectors that will benefit the most would be education, agriculture, telecom, computers, health and small and medium industries. Overall, it’s a powerful and welcome shot-in-the-arm for the Indian digital ecosystem.”
In a similar vein, Sanjay Tripathi, Co-founder & CEO, Agilio Labs, too, felt that, “The Google fund is a signal that US funds are now believing in India and more money is bound to come to India. It is a great time for Indian start-ups. This investment came just after Facebook, which rivals Google and Amazon in India, made a $5.7 billion investment in Reliance Jio Platforms. Most of the American tech giants are opting out of China and they want to be part of the growing Indian start-up ecosystem. It will help to create many more unicorns from India.”