Google reaffirms its India focus....by KBS Sidhu

New Delhi: As the global artificial intelligence (AI) landscape evolves, India has become a focal point for major tech companies. Google’s recent efforts to integrate AI into its products for the Indian market reflect the growing competition among U.S. tech firms to capture a larger share of one of the world’s most populous markets.

With rivals still catching up, Google’s AI push seems well-timed, positioning it to enhance its offerings for millions of Indian users.

AI-Powered Gemini Takes Centre Stage

At the 10th Google for India event in October 2024, Google introduced a host of AI-driven initiatives. At the core of these efforts is Gemini, Google’s AI model that promises to significantly improve search, visual recognition, and language processing.

Gemini's integration across Google's products aims to offer a more intuitive experience, especially for users engaging through voice commands in their native languages.

More than 40% of Indian users rely on voice interactions, and Google is capitalizing on this trend with the launch of "Gemini Live," an AI assistant designed to simulate free-flowing, natural conversations. Initially available in Hindi, it will soon support eight additional Indian languages, including Bengali, Gujarati, Tamil, and Urdu, making it a valuable tool for a linguistically diverse population.

Expanding AI Search Capabilities

Google is also enhancing its search functionality with AI-powered improvements. The company is expanding its "AI Overviews" feature to support more regional languages, such as Bengali, Marathi, Telugu, and Tamil.

This expansion reflects Google's commitment to serving India’s linguistic diversity. While AI Overviews in Hindi received mixed reviews, Google’s continued focus on refining language support highlights its dedication to meeting the needs of all Indian users.

Visual Search Innovation: Google Lens and Beyond

Recognizing India's unique needs, Google has focused on visual search innovations, an area where it already enjoys widespread use. Google Lens is highly popular in India, and Google is now experimenting with video-based searches, enabling users to ask questions about moving objects within videos.

This innovation is poised to transform how users engage with dynamic content, adding a new dimension to search capabilities.

Local Manufacturing: Supporting ‘Make in India’

In addition to its AI initiatives, Google has demonstrated its commitment to India through local manufacturing efforts. The company has announced plans to manufacture its Pixel smartphones in India, starting with the Pixel 8 series, in line with the country’s "Make in India" initiative.

The first batch of Made-in-India Pixel 8 devices has already rolled off production lines, marking a significant milestone in Google’s broader strategy of tapping into the growing premium smartphone market.

By partnering with international and domestic manufacturers, Google aims to ship over 10 million Pixel devices globally this year.

As competition heats up in India’s premium smartphone segment, Google’s decision to manufacture locally positions it to expand its market share while contributing to the country's growing manufacturing ecosystem.

Retail Expansion and Offline Sales Strategy

Complementing its manufacturing efforts, Google is also expanding its retail footprint in India. Through partnerships with Tata's Croma and Reliance Digital, Pixel devices are now available in over 150 stores across 15 cities.

Offline sales play a crucial role in India's premium smartphone market, accounting for 60% of non-festive quarter sales and 40% during festive periods, making this retail expansion key to Google's strategy.

To further support its retail efforts, Google is opening three walk-in service centres in Delhi, Bangalore, and Mumbai, in collaboration with Flipkart’s service arm. These centres are expected to enhance after-sales support, helping Google establish itself as a reliable brand in India’s premium segment.

Pixel's Market Performance: Challenges and Opportunities

Despite Google’s ongoing efforts, the Pixel brand remains a relatively small player in India’s smartphone market, capturing just 0.4% of the market in the first half of 2024.

However, India ranks among the top five markets for Pixel devices globally, and Google remains optimistic about future growth. Experts predict that Pixel sales in India could triple within the next year, driven by the new manufacturing and retail initiatives, as well as the increasing demand for premium devices.

Nonetheless, challenges remain. Google faces stiff competition from its OEM partners, many of whom are also entering the premium segment. To succeed, Google will need to address pricing concerns to make Pixel devices more accessible to a broader consumer base.

However, with Android powering the majority of smartphones in India, Google’s strong software foundation gives it a competitive edge in the hardware market.

AI Innovations for Indian Merchants

Google is also helping Indian merchants enhance their digital presence with AI-powered tools. New features in the company’s Merchant Center, such as AI-generated video animations from static product photos, are designed to make online profiles more visually appealing.

Additionally, Google is introducing an automated system to convert photos of restaurant menus into formatted online listings, allowing merchants to promote deals from social media alongside popular aggregators like Zomato and Swiggy.

These AI-driven tools, along with the option to add chat functionality via SMS or WhatsApp to search listings, offer businesses greater flexibility and engagement with customers, potentially revolutionising how Indian merchants interact online.

Google’s Long-Term Focus on India: More Than Just a CEO Connection

Demographics and Aspirations

Beyond its innovative products, Google’s commitment to India is also shaped by a deeper understanding of the country’s vast economic potential. While many view Google’s focus on India as axiomatic due to the company’s CEO, Sundar Pichai, being of Indian origin and an alumnus of IIT, the tech giant’s strategic interest goes far beyond personal ties.

With a population of 1.4 billion, two-thirds of whom are under 35, and a rapidly growing aspirational middle class, India represents one of the world’s largest and most dynamic markets.

Infrastructure and Government Support

The country’s robust internet backbone and expanding wireless infrastructure provide fertile ground for digital expansion, while government policies under Prime Minister Narendra Modi, focusing on "Ease of Doing Business" and welcoming Foreign Direct Investment (FDI), further enhance India’s attractiveness for global companies. Unlike China, where tight governmental control over tech firms creates challenges, India offers freedom of speech and expression with minimal governmental interference, creating an environment conducive to business innovation.

Sundar Pichai’s Cultural and Political Ties

Additionally, Sundar Pichai’s ability to engage in India’s vernacular languages and his strong rapport with both the central leadership in New Delhi and regional governments, such as those in Andhra Pradesh and Telangana, has bolstered Google’s position in India.

This unique combination of cultural connection, a favourable political environment, and economic opportunities explains Google’s long-term focus on India as a key player in its global strategy.

Summing Up: A Strategic Long-Term Vision

Google’s focus on India is not just about leveraging personal ties but is driven by solid economic and political factors. India’s youthful population, advanced infrastructure, and supportive government policies provide a strong foundation for Google’s long-term strategy in the country.

Looking Forward: Google’s Commitment to India

Google’s aggressive AI initiatives and local manufacturing efforts underscore its long-term commitment to India, a market it views as critical to its future growth.

As the competition among U.S. tech giants intensifies, Google’s localisation of AI tools and expansion into the premium smartphone segment demonstrate a forward-thinking approach tailored to India’s diverse needs.

With its deep-rooted presence in India and continued investment in AI, local manufacturing, and retail expansion, Google is poised to remain a key player in shaping the future of technology in one of the world’s largest markets. The race for AI leadership in India is just heating up, and Google’s strategic moves could set the stage for a new wave of innovation across the country.

The future for Google in India is indeed bright—and fittingly, very "Sundar" (pun very much intended).

October 7, 2024