Our mission is to get the Internet alive for every Indian: Vikas Agnihotri, Google India

In a chat with exchange4media, Agnihotri, Country Director - Sales, Google India, shares insights on the study to map impact of Internet penetration and changes in buying behaviour in India

e4m by Tasmayee Laha Roy
Updated: Nov 25, 2019 9:59 AM


Vikas Agnihotri

Google wants every Indian to have access to the internet and is driving the digital growth in the country, says Vikas Agnihotri, Country Director - Sales, Google India.

In an exclusive chat with exchange4media, Agnihotri talks about a new study conducted by Google and IPSOS to map the impact of Internet penetration and the changes in the buying behaviour of shoppers in India. He also decodes the influence of the digital medium across different stages of an urban offline shopper’s journey.

If there are three important things that the Internet needs to reach out to every single Indian it will be - language, voice and video, says Agnihotri.

He walked us through what Google has been doing in India and endeavours to do further.

Edited excerpts:

Given the huge success of the Amazon and Flipkart sales in Tier II and Tier III cities, do you see India moving towards China-like numbers when it comes to online shopping, anytime soon?

There are people and opinion makers who are saying India is India and China is China. Earlier, we used to talk about catching up in six years or whatever it is but I think we should actually segregate the progress both the countries are making, especially when it comes to some of these online numbers.

If you look at it, China's GDP per capita is about $10,000 at this point of time and going upwards to $11,000. We are closer to $2,400 to $2,500. That is our GDP per capita numbers. Traditionally, an e-commerce big burst happens when GDP per capita crosses $4,000. But having said that, there is a recent report from Kalaari Capital, which actually compared not just e-commerce but also FMCG consumption, and what it actually said was that there is an S-curve that we follow in terms of consumption patterns. What it really means is that when your per capita GDP is less than about $1,800, you are just about trying to get the basics in place in terms of your consumption habits. When you cross that, the FMCG per capita per consumption grows 2X. And then, when it reaches about $4500-$5000 it follows an S-curve where there is not that much more that you can consume. So they have come out with an interesting story that India is in a really good period of time. Now, as we move forward for the FMCG per capita consumption there is a point of inflection that happens around $4,000.

The other metric that we should look at is in terms of urbanization of population between China and India. In China, almost 59% of the population is urban. And in India, at this point of time, it’s only 34 per cent. But again, if you look back and see the top-10 fastest growing cities, several of them come from India. In the next five to eight years, there is a massive opportunity for growth, which is why we believe e-commerce sales in this country that is presently at about $40 billion on an annualized basis by 2023 is expected to cross about $100billion in terms of gross merchandise value. So if you park China out of this equation, there is an enough and more amazing opportunity that we are looking at within India itself. And the India story is very good and strong. Don't compare it with China because China is what China is.

Given the fact that penetration of smartphones in rural India is in a mature stage at the moment, do you think the user is digitally mature too?

As far as Google is concerned, our mission is to get the Internet alive for every Indian. We believe that we’ve gone only the half way. At 460 million, we are at less than half the population that is actually online. What we have seen is that after we have crossed the first 250 million people, for every hundred the next hundred million that has come on the internet, their reason for access and their reason for staying on the internet is different. So you have to evolve completely in terms of the technology and the price points and the kind of content that you want to bring to the next set, for people to stay on the internet and engage with the Internet.

An interesting anecdote to share here is that - we were at 250 million people on the Internet, we used to talk about the three Ms as a concept where there were more Male, Millennial and Metro centric people and they were all generally English speaking. But no more than 200 million people in this country can speak English. So when we started moving beyond 200 million, it was pretty clear that it has to be language. So language had to become important. Also because our literacy rates are not the highest, we had to move towards voice and video. And, therefore, we tied voice, videos and languages. Having reached the 460 million, together with our partners, we are now attempting to make the number touch 550, then 650 and beyond.

When you talk of a mature space, think about the people who have come on the internet for the last three years. They have been on the Internet for about 30 to 35 months. Maturity generally on the Internet is looked at after 12 to 24 months when a user starts thinking that he or she can do some kind of a transaction, which generally starts with a mobile top up, etc. It's only after about two and a half to three years and more of having been on the Internet that you start doing any other transaction and that is when somebody gets digitally mature.

What are you doing at Google to make Internet accessible to all?

We started something called Vodafone-Idea Phone Line - supported by the Google Assistant - that enabled users to call a single number at any time and ask for everything from the weather report or the price of a product, basically anything that you look up on the Internet. This is for people who do not have the means to be on the Internet.

Another very important thing we work on is languages. It is very important to get as many languages as possible on the internet. Google Assistant itself has nine languages and Hindi is the second most popular language on the Google system globally.

Then as I said voice and video are very important. We are using both to get more people empowered with Internet. On the other hand, we do partner on providing free WiFi access points across the country.

Lastly, we are proud of our product GPay that is aimed at simplifying the ecosystem of digital payments.

Tell us a little about the Google-IPSOS path to purchase report. What is the degree of influence of digital across different stages of an urban offline shopper’s journey?

In the last couple of years, we have come up with some reports which includes the Google AT Kearney Study, 2016, which says by 2020 digital is expected to influence 50 per cent of organized retail in India with every 2nd non-buyer utilizing digital sources for pre-purchase research. Then there is the Google & BCG Study, 2017, that points out how 40 per cent of FMCG consumption in India will be influenced by digital, translating to a value of $45 billion by 2020. Lastly, there is the Google & BCG Study, 2019, that highlights the fact that 63 per cent of consumer durable sales in India will be digitally influenced by 2023.

In context to the IPSOS report we have spoken about four phases that the customer goes through. The first being the trigger phase, the second is pre purchase followed by in store stage and post purchase stage.

It is not just people, who are online, that are shopping online. There are people who research online and buy online, or there are those who actually get into the store and do research and by either online or offline.

Because we have 460 billion people who have access to the internet and our consumption patterns of data is the highest as compared to anywhere in the world, people are doing a lot of research around buying.

It is tough to ignore the lull retail is in at the moment. Is online retail also going through a similar phase?

As far as we are concerned - from a search query perspective - we find search queries both on YouTube and Google search, actually, are on the rise. If search was an early indicator, in terms of what is to follow then I think we are in pretty good shape. It’s like cautious optimism, if I may call, in terms of where we are headed.

The digital advertising industry in India has been growing over the past few years, and Google is one of the largest players in the segment globally. What are you doing at Google India to drive the growth further?

When we talk of Google in India, we are not just trying to get every Indian online but we are doing a lot in terms of investing in the ecosystem. It's just not only marketers, we have partnered through our launchpad accelerator programme with many of the start-ups in the country. We also work a lot on skill building and work with SMEs because our belief is that SMEs are the lifeblood of the economy.

Because of the fact that people are on the internet, there is a better way of understanding consumer behaviour. And there is there is a science behind what we call the data-driven marketing. We are trying to work with marketers to ensure that the entire process of understanding consumer behaviour becomes better and our ability to engage with our customers at the right time with the right messaging becomes even better and sharper.

This whole research that we are trying to do is actually a step towards trying to make this whole process a lot more efficient, both for the consumer, as well as for the marketers.

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