(Bloomberg Opinion) – Time will be the next frontier on India’s digital battlefield; dollars will follow the hours consumers spend online.
India has left a void in its day by banning 59 Chinese apps after a border dispute with its northern neighbor led to violent conflicts. The video sharing platform TikTok, which became a craze in cities and villages as a medium of expression, is gone. So are its smaller cousins, like Bigo Live and Likee.
What can fill the gap? Thanks to the world’s cheapest data cost of 9 cents per gigabyte, Indian smartphone users thrive on content for six hours plus. For local startups like Glance, which offer games, news and video on the mobile lock screen, the ban on Chinese competition is a chance to increase the number of 100 million active users daily. The country’s youth bulging also makes it a perfect opportunity for unicorns with homemade educational technology such as Byju to scale up.
But the ultimate price may come for super apps that blend content and commerce in the 16 Indian languages besides English which has somewhere between 5 million and half a billion speakers. Not having to download multiple apps to do different things will save phone memory, an important consideration for those who have access to the internet on high-end devices.
Tencent Holdings Ltd.’s WeChat, which offers everything from messaging to games and financial services, provides a successful template. Chinese users are also online for six hours a day, mostly for browsing content, especially social media. Although only 4% of their time is spent on e-commerce, it is enough to drive $ 1.5 trillion in annual online sales. The smaller Indian market, with net sales of $ 40 billion, will want to copy the ledger.
The most obvious super-app candidate is billionaire Mukesh Ambanis Jio Platforms Ltd., a four-year-old startup with an equity capital of $ 65 billion, including more than $ 15 billion recently raised from investors including Facebook Inc., KKR & Co. and Silver Lake Partners. Before Jio eventually seeks a listing on the Nasdaq or New York Stock Exchange, Ambani would probably want it ready as a transportation-content-and-commerce powerhouse for half a billion.
Jio’s 4G telecommunications service already has about 400 million subscribers, but they don’t currently pay even $ 2 a month. The trick to a $ 100 billion-plus public offering is to use the partnership with Facebook to introduce features like WeChat gadgets via the popular WhatsApp messaging service. It lets users book hotels, order taxis, explore augmented reality to try a new L’Oreal beauty product or test drive a Tesla – without leaving WeChat.
When it comes to building product awareness and interest, these embedded mini apps in China are now a fourth as effective as regular online stores run by JD.com Inc. and Alibaba Group Holding Ltd., according to McKinsey & Co. They will offer brands in India a chance to sell more – and more profitable – even in remote cities. The consulting firm found that younger consumers in smaller Chinese cities place more emphasis on advice from social media influencers and referrals from friends than their counterparts in larger metropolitan areas. This probably applies to India as well. In terms of actual trading, JioMart, Ambani’s new e-commerce platform, would take orders and – if allowed by the regulator – accept payments via WhatsApp. Staples could be delivered by traditional neighboring stores, where Jio helps connect them to buyers. For discretionary products, Ambani can use its Reliance Retail Ltd., the country’s largest retailer of bricks and mortar.
It won’t be too difficult to lubricate the wheels of the super-app credit business. Local lenders will be desperate for a new source of balance expansion after taking up inevitable losses from the pandemic and lockdown. Still, the road to satisfied digital customers will be long and rough due to India’s cumbersome infrastructure. Therefore, keeping users connected to new content will be crucial. Facebook builds a new version of Quest virtual reality headset; The Silicon Valley company also acquires studios that create VR games. Jio, who wants his set-top box to support online games, can find opportunities for collaboration.
However, the main entertainment fee is still cricket and Bollywood. Last year, Ambani Jio promised First Day First Show – movies streamed to broadband customers the day of their theatrical release. When Covid-19 shuts down cinemas, producers in India need digital alternatives. the audience needs their fix.
Although Ambani seems to be arriving, he will not be India’s only super app. Amazon.com Inc. has promised to invest $ 5.5 billion in the country, while Walmart Inc. has pledged $ 16 billion to acquire local e-commerce leader Flipkart Online Services Pvt. Potentially, they – or Alphabet Inc.’s Google – could seek telecom and digital media partners.
Western technology companies were largely shut down from China’s digital revolution. In India, they will join the fight and hope for insights that will be practical in other emerging markets. But India will still prefer local control over the super apps. Six hours a day of 1.3 billion people – and all the information flowing from it – is a coveted resource, something that politicians do not want out of their influence.
This column does not necessarily reflect the views of the editors or Bloomberg LP and its owners.
Andy Mukherjee is a columnist at Bloomberg Opinion covering industrial companies and financial services. He was previously a columnist for Reuters Breakingviews. He has also worked for Straits Times, ET NOW and Bloomberg News.
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