Despite having over 90% smartphone market share in India, Google is lacking a big consumer app in the country.
Facebook has WhatsApp (and Messenger), both of which are massive in India, and Google is getting anxious that it could lose out.
Google CEO Sundar Pichai made his first official trip to India in mid-December as the company looks to expand in the country. Pichai announced a partnership with the Indian government to bring more of India’s 1.2 billion population online.
Business Insider spoke to Keval Desai, an ex-Google employee turned investor, about the problems Google is having in one of the fastest growing markets on Earth. (He was keen to stress that his views are not based on inside knowledge, but an understanding of Google’s culture and businesses.)
Problem #1: India is a mobile-first country.
Unlike the US or Europe, the majority of internet users’ first experiences of technology and the internet are on a mobile device (most likely a smartphone) rather than a PC.
“Google has to re-architect its product [and] business model to this new mobile era,” Desai said. “Google faces a completely new ecosystem in mobile that is similar to the old PC era of the ’80s-’90s and not the web era of 2000s when Google was born.”
This change is not specific to India but the whole of Google’s business and the company has been working hard on creating mobile apps for all platforms while expanding beyond search and advertising, which make up 90% of Google’s revenues.
Problem #2: Facebook.
Desai makes the distinction between “desktop social networking” — which, he says, is Facebook and LinkedIn — and mobile messaging. According to Facebook, more than 890 million people use the Facebook app every month.
“Google has no chance [with desktop social] and I think trying to compete here is like fighting the last war,” he said. “It is pointless and I believe Google recognises that.”
“Messaging apps have become the entry point for most of the tasks on a smartphone [in India],” he said. “Google owns the [operating system] in Android, but it doesn’t own the entry point on a smartphone.”
Facebook bought WhatsApp, the online messaging service, for $19 billion (£12.7 billion) last year for precisely this reason: The company wanted to own the portal through which people visit the internet.
“Google saw this coming and tried to buy WhatsApp but [Facebook] beat it,” he said. “So now Google does have a problem and it is very evident in ‘mobile first’ countries like India where hundreds of millions of first time internet users are using WhatsApp as their entry point.”
Problem #3: Becoming a destination site.
Becoming a destination website will be difficult for Google in India, according to Desai.
“[Internet users in India] do all of their communication, commerce, social activities within the walled garden of WhatsApp,” he said. “Many of these users don’t even have a [Gmail] account because they were not even online until they got their first mobile phone so they are not in the Google universe and they don’t search much on their phone either so Google truly never sees them.”
Desai pointed me towards an article which details how a street vendor in India has increased sales dramatically by using the group messaging feature in WhatsApp. This, he said, “perfectly captures Google’s challenge in India.”
How to fix the problem.
According to Desai, Google has three options:
Leverage its other mobile apps: Google has YouTube and Maps at its disposal, both of which are used heavily on mobile devices. Neither are messaging apps, but both give Google the opportunity to grab consumer mindshare.
Build, or acquire, other messaging apps: Highly popular regional apps exist in almost every market — such as Line in Asia — and Google could acquire one of these, re-brand it, and reap the rewards. Finding the apps is the hard part, however.
Rebrand Chrome: Google’s web browser could, according to Desai, be leveraged and turned into a messaging client. Deals with phone hardware partners, such as Huawei, could be used to distribute the software.
“I think the key to winning in India in mobile is going to be slightly different than winning the desktop web in the US,” said Desai. “In India, Google will have to win by having top apps and [win] by ensuring that it can be the first point of access for millions of Indians who are still not yet online.”
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