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Why India is the newest hotbed for tech experimentation

Amir Mukhtar / Moment / Getty Images

India has been on the minds of many tech companies of late. Most end up running into a wall while trying to reaching the country’s idiosyncratic audience — but a handful have thrown everything they can at that wall to see what sticks.

In the last few years, a range of tech giants have actively experimented with their premier products or launched new, exclusive ones so that they could find a fit in the Indian market.

In December, Amazon introduced its first battery-powered Echo smart speaker that didn’t have to be always clamped to a wall. The majority of Indians rely on mobile hot spots and often suffer power cuts. Thus, a traditional Echo device would have never made sense for the masses. The new Echo Input Portable addressed that exact shortcoming and allows users to carry it around their house or take it outside.

In early 2019, Netflix added a $3 mobile-only plan in India, where nearly three-quarters of all internet users surf the web from their phones. The special subscription restricts viewers to streaming shows and movies in standard quality on a single phone screen. That’s not all. A few weeks ago, the streaming company reportedly began testing long-term plans that offered 20% to 50% discounts and charged users once every 3 to 12 months.

“India is the only country where we are launching a mobile-only plan. The country is a pillar for us,” said Jessica Lee, Netflix’s vice president of communications, at the launch of the company’s mobile-only plan. “With the huge population rise, rising middle class, and all the entertainment that we can create out of India, it is an important play in the books of Netflix.”

Just for India

Just about every major tech company has gone the extra mile to reengineer its offerings for India. Three years ago, fed up with the central bank’s two-step authentication policies, Uber launched cash payments in India. Google and Facebook offer free Wi-Fi across the country and built feature phone versions of their main apps. Downloads on YouTube, unlike other countries, don’t require a Premium subscription. Vodafone subscribers can talk to the Google Assistant through a toll-free number in Hindi or English — no internet needed.

Just about every major tech company has gone the extra mile to re-engineer its offerings for India.

Apple has been gradually setting up a chain of manufacturing hubs and even announcing relatively affordable phones that are primarily designed for regaining its plummeting market share in India.

“I predict that the 21st century is going to be the Indian century. The most important alliance is going to be the alliance between India and the U.S., the world’s oldest democracy and the world’s largest democracy,” said Amazon CEO Jeff Bezos on his recent visit to India.

The reason India has rapidly taken a front seat in all these marquee tech companies’ road maps is largely straightforward as well. The nation’s data boom has sent each of its internet sectors, such as OTT (over-the-top) consumption, music streaming, and e-commerce, into overdrive. And all of them continue to grow at a breakneck pace.

By 2023, the number of internet users in India is projected to reach 750 million to 800 million, up drastically from the current 500 million. In a report, McKinsey Global Institute estimates the number of smartphone users will double in the next couple of years as both hardware and internet costs continue to fall. On top of that, it says monthly mobile data consumption is rising at a staggering 152% — more than twice the rates in the United States and China.

“Our analysis of 17 mature and emerging economies finds India is digitizing faster than any other country in the study, save Indonesia — and there is plenty of room to grow: Just over 40 percent of the populace has an internet subscription,” it added.

While some companies envision India as the next, big chunk of the user base, others can’t afford to miss out on the heaps of digital data.

The other factor that’s driving companies to shift their focus is the fact that they been have unable to break into the Chinese market and its draconian regulations. India, on the other hand, has eased restrictions to invite and foster tech investments.

“Netflix and Amazon are seeing their market getting saturated in the U.S. and are turning elsewhere for growth. The Indian market offers a number of advantages compared to other emerging economies like China, from which they have been shut out: India [currently] has a friendly business environment with no state restrictions on [FDI], and it has a vibrant startup ecosystem and highly skilled workforce,” Laura Petrone, senior analyst at GlobalData, told Digital Trends.

A fertile testing ground

Finding a foothold in India — which has a multitude of regional languages, unique customer behaviors, and a relatively nascent internet population — isn’t exactly a walk in the park for these companies. Often, success in the West doesn’t translate well in the country. That’s where the experimentation comes in.

Often, a company’s success in the West doesn’t translate well in the country.

“[Ninety percent] of India does not speak English, and it has 22 official languages, with 6,000-plus dialects and 55-plus languages. [Four-hundred] million new consumers will be using the internet for the first time and most of them will be non-English speaking. Tapping the next billion audiences would require to build through a thorough understanding of a user who behaves very differently from the urban English-speaking audience of India,” said Navkendar Singh, research director for marker research company IDC.

Much of India’s first-time internet users are from rural regions where internet literacy is at rock-bottom, and that represents another uphill challenge for tech companies.

“Tech giants are under extreme pressure to get more customers and part of their strategy is to customize their services as much as possible to Indians’ specific needs. For example, they are moving to target rural areas, where much of the growth in mobile subscriptions is expected to come. In the video-streaming market, Netflix and Amazon are providing movies and series in regional languages and locally focused content,” added GlobalData’s Petrone.

Commenting on Netflix’s experience figuring out the Indian audience, Gregory K. Peters, chief product officer, said in an earnings call last year: “We are operating in markets that have very, very different conditions, very different levels of affluence and other forms of entertainment competition, et cetera.”

Expanding beyond India

Since India has such a diverse user base, companies can easily expand these experimental projects to other countries without any major modifications. For instance, after Google first tested a special motorcycle navigation mode for Google Maps in India, it made its way to more regions including Egypt and Singapore. Netflix’s mobile-only plans are expected to soon land in other Asian markets and, possibly, in the United States, where the streaming service’s growth has begun to slow as it faces more competition.

India is possibly one of the last mass markets tech companies will have a shot at and, if the past few months are any indication, the competition will only get more fierce from here. As these corporations grow more comfortable with the local market, as well as the government, it’s likely they will further expand and rethink the products that haven’t yet made their way to India.

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