With $10Bn, Google Projects a More ‘Desi’ Face With Eye on MSMEs

Google CEO Sundar Pichai announced $10 billion towards a digitisation fund over the next five to seven years.

Google CEO Sundar Pichai announced a $10Bn fund to accelerate digital infrastructure in India over the next 5-7 years. 

(Image: The Quint/Aroop Mishra & Erum Gour)

Google on Monday, 13 July, announced a $10 billion fund to “help accelerate India’s digital economy.”

Speaking at the ‘Google for India’ event, held entirely online this year, Google and Alphabet CEO Sundar Pichai said:

“Today, I’m excited to announce the Google for India Digitisation Fund. Through this effort, we will invest Rs 75,000 crore, or approximately $10 billion, into India over the next 5-7 years.”

Following Amazon’s pledge of $1 billion in January and Facebook investing $5.7 billion in Jio Platforms in April, both with the intent of tapping into India’s Medium, Small & Micro Enterprises (MSME) through digital payments, Google’s announcement is being viewed as a declaration of its intent to dig its heels deeper into India’s ‘kiraana’ economy or local businesses.

Technology industry observers have also told The Quint that the move is important as it signals Google’s intent to be firmly embedded in the fabric of India’s digital space at a time when nationalism in tech is growing and also creeping into legislation.

Where Google Intends to Put its Billions

Pichai also elaborated that the investments will focus on four areas important to India’s digitisation. These core areas reveal Google’s priorities in India with regards to its intended spheres of expansion.

• Enabling affordable access and information for every Indian in their own language, be it Hindi, Tamil, Punjabi or any other.
• Building new products and services that are deeply relevant to India’s unique needs.
• Empowering businesses as they continue or embark on their digital transformation.
• Fourth, leveraging technology and AI for social good, in areas like health, education, and agriculture.

The company plans to do this through a mix of equity investments, partnerships, and operational, infrastructure and ecosystem investments. “This is a reflection of our confidence in the future of India and its digital economy.” Pichai added.

Technology policy consultant Prasanto K Roy, senior director at FTI Consulting, said while Google’s announcement is more of an intent at present and one that will play out over five to seven years, it is evident that they, too, are keen on expanding in the MSME space like all other players.

Roy outlines a number of specific factors that could be driving Google’s announcement:

• In order to expand in India, the key is to offer services in different languages. This is reflected in the announcement.
• Stay safe and insulated from the growing surge of nationalism in technology. Especially, at a time when it is creeping into legislation and can impact Google.
• It is important for Google to be embedded in India’s digital fabric by growing services in agriculture, education and MSMEs.
• The last few months have caused disruptions in the technology market and has created new opportunities such as in telehealth, online classrooms and meetings.

According to Kazim Rizvi, founder of technology policy forum The Dialogue, the announcement can go a long way in encouraging more technology giants to invest in India’s technology space.

“The deal is also a positive for Indo-US bilateral cooperation and we believe it should spur a closer relationship on data and technology, as streamlining global data value chains is the need of the hour,” Rizvi told The Quint.

Eyeing the MSME Pie

Within two years of its launch, Google’s digital payments platform, GPay reached 67 million monthly active users (MAUs) in India in September 2019. This comprises transactions worth over $110 billion on an annualised basis.

“The question is, what does Google need to do in India? Unlike others, Google is the market leader and its primary focus is to now to stay invested in India and grow the market from 500 million to a billion,” Roy told The Quint.

Earlier in 2020, a day after Facebook acquired a 9.99 percent stake in Reliance Jio’s platforms on 25 April with the aim of capturing medium and small business onto its digital platform, retail giant Amazon announced it has pledged Rs 10 crore to “immediately expand” its pilot project to onboard local stores.

During Amazon CEO Jeff Bezos’ visit to India in January, Amazon had announced plans to invest $1 billion “to digitally enable micro, small, and medium enterprises (MSMEs) and traders across India,” according to the company’s official statement.

“Earlier this year, we renewed our commitment to India by announcing an additional investment of $1 billion to digitally enable 10 million micro, small, and medium businesses in the country by 2025, including artisans, manufacturers, retailers, and local shops,” Gopal Pillai, VP, Seller Services, Amazon India, wrote in a company blog.

Signaling Amazon’s ambition to capitalise on the vast untapped marketplaces in India, Bezos had said, “We’re committed to being a long-term partner of India. And actions speak louder than words.”

“This investment also reinforces the promise of India’s startups and the potential in the MSME sector,” said Rizvi, adding that the investment will serve to neutralise some of the financial impact of banning Chinese apps.

“While India places greater checks and balances on Chinese investment due to strategic compulsions, this investment also sends a message that India is a great destination for investments and is open for collaboration and partnerships,” Rizvi added.

If Amazon plans to onboard one crore small businesses by 2025, the Facebook-Jio deal is a plan to bring six crore small businesses under the umbrella of a singular platform to create a bigger e-market than that of Amazon.

“Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India,” Facebook’s Chief Revenue Officer, David Fischer & Ajit Mohan, VP and Managing Director, India, stated as part of its official announcement on 25 April.

“Amazon, Flipkart, Facebook and even The Confederation of All India Traders (CAIT), with plans of an e-commerce platform, are all into the ‘kiraana’ space. Facebook wants to do with WhatsApp what China has done with WeChat, that is, turn it into a go to app for everything by integrating payments,” Roy said.

Boosting Google’s Indian-ness

A significant thrust of Pichai’s address at ‘Google for India’ event was the focus on India specific innovations and products.

Prime Minister Narendra Modi tweeted on Monday of his meeting with Pichai earlier in the day. “We spoke on a wide range of subjects, particularly leveraging the power of technology to transform the lives of India’s farmers, youngsters and entrepreneurs,” PM Modi’s tweet said.

By merging personal experiences of growing up in India with hard business moves, Pichai’s nearly 10-minute-long address also sought to emphasise Google’s firm roots in the country.

“Growing up, technology provided a window to a world outside my own. It also brought us closer together as a family. Every evening, we were drawn to the television by Doordarshan’s special rendition of 'Sare Jahan Se Accha’,” said Pichai, adding, “I tried to explain this to my colleagues the other day, but I eventually gave up and just showed it to them on YouTube.”

“When we build for India, we build for the world,” Pichai stated emphatically.

Speaking on GPay, Pichai, in a similar vein, added, “India is setting the global standard on how to digitise payments, and it’s now helping us build a global product.”

Union Electronics & IT Minister, Ravi Shankar Prasad, who spoke right after Pichai, also appeared to showcase Pichai’s position at Google as a symbol of India’s clout in global technology space.

“In Sundar Pichai, who is heading Google, is a very powerful symbol of the creative potential of India’s digital human resource. It is a matter of deep satisfaction for us that so many Indians today are occupying key position in various powerful digital organizations globally,” Prasad said.