Fri, Oct 02, 2015 - Page 9 News List

India replacing China as next big frontier for US tech companies

India is positioning itself as a lucrative market for start-ups and tech companies that missed out on China, as the country embraces technology in varied ways that allows companies to test the waters before entering other markets

By Vindu Goel  /  NY Times News Service, BANGALORE, India

Illustration: Mountain People

US technology companies desperately want to win over people like Rakesh Padachuri and his family.

Padachuri, who runs a construction business in Bengaluru, the center of India’s technology industry, uses his smartphone to reserve movie seats through BookMyShow and to order pizzas from Domino’s. His wife, Vasavi, orders clothes from Myntra and Amazon.com and downloads videos and games from YouTube and the Google Play store to entertain their four-year-old daughter.

They all stay in touch via a group chat they have set up on WhatsApp, a free messaging service owned by Facebook.

“There’s no need to call each other,” Rakesh Padachuri said last month during an interview at his home, which is next to a Best Western hotel.

The Padachuri family’s love of technology helps explain why India and its 1.25 billion residents have become the hottest growth opportunity — the new China — for US Internet companies. Blocked from China itself or frustrated by the onerous demands of its government, companies like Facebook, Google and Twitter, as well as start-ups and investors, see India as the next best thing.

“They are looking at India and they are thinking, ‘Five years ago, it was China and I probably missed the boat there. Now I have a chance to actually do this,’” said former Google executive Punit Soni, who was lured back to India recently to become the chief product officer of Flipkart, an e-commerce start-up in Bengaluru similar to Amazon.

The increasing appeal of India, now the world’s fastest growing major economy, was underscored in recent days.

During a meeting in Seattle on Wednesday last week with US technology executives, Chinese President Xi Jinping (習近平) was unwavering on his government’s tough Internet policies.

Indian Prime Minister Narendra Modi, on the other hand, was on a charm offensive during his own US tour.

After a stop in New York City, he headed to Silicon Valley, where he visited Tesla and attended a dinner with tech company heads, including Satya Nadella of Microsoft and Sundar Pichai of Google.

On Sunday, Modi participated in a town hall discussion with Facebook chief executive officer Mark Zuckerberg. He also dropped by Google and Stanford University, mingled with entrepreneurs and addressed a sold-out arena of 18,000 people in San Jose, California, before heading back to New York to meet with US President Barack Obama on Monday.

“For India to keep making progress, it needs to be a leader online,” Modi said during the Facebook event.

He acknowledged that tech companies like Facebook were not connecting people out of pure altruism, but he told Zuckerberg: “I hope this will not just be something to enhance your company’s bank balance.”

The overall message to Silicon Valley from Modi, who posts regularly on Twitter and Facebook: Help India become an Internet powerhouse.

Two years ago, India’s rise as a digital nation was hard to imagine. Internet penetration was modest, cellphone networks were glacially slow and smartphones were a blip in a sea of basic phones.

However, since 2013 the number of smartphone users in India has ballooned and is set to reach 168 million this year, the research firm eMarketer predicts.

India already conducts more mobile searches on Google than any country besides the US.

Yet “we are barely scratching the surface of availability of Internet to the masses,” said Amit Singhal, Google’s senior vice president in charge of search, who emigrated from India to the US 25 years ago.

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