Social media companies are increasingly adopting a confrontational tone on the new social media rules that came into effect on May 26. First WhatsApp, now Twitter. While WhatsApp has sued the Government of India legally with a petition that says that the proposed laws are detrimental to the fundamental rights of privacy, Twitter, on the other hand, says it is concerned with the potential threat to freedom of expression in India and has asked for a 3-month extension of new social media rules.
But can these companies take a confrontational risk in a market that might be their largest revenue source in future? China does not allow external social media companies so they have already missed the bus to a market in the world’s most populous nation. Now will they lose the market in the world’s second-most populous nation with 136 crore people that is also expected to grow fastest in the world by adopting a hostile attitude towards its laws and its government?
Can they risk to lose the user-base in India that is that is also the largest in the world?
(Source: India’s user-base – Ministry of Information and Technology; user-base globally – Statista, Business and Apps and Hootsuite)
India is now the largest market of future for US-based social media companies like Google, YouTube and Twitter. The user-base growth of these social media companies in the US and Europe has almost saturated while South Asian nation has the largest user-base and a possible future growth cycle on revenue generation waiting with India’s rapid digitization and fast economic growth.
Google, like the world over, has a 95% search engine market in the country. In mobile search engine market in India, its share is almost absolute, 99.29% as per database website Statista. Most of us run our mobiles on Android mobile operating system, again a Google product with 95% market share. Google Pay, Google’s digital payment platform, continues to be among the top three players in the digital payments industry.
As per an analysis by Media Partners Asia (MPA), Google’s video platform YouTube earns maximum revenue in India, almost thrice as high as of the second competitor. In 2020, YouTube earned 43% of the total revenue generated by India’s online video industry followed by 16% by Disney+ Hotstar, 14% by Netflix, 7% by Amazon Prime Video and 5% by Facebook. In April 2019, Susan Wojcicki, the YouTube CEO, said India was the fastest and largest growing audience market for the video streaming platform in the world. Today, YouTube’s 22.4% users are in India only.
To sum it up, Google sits at the top of online needs and behavior in India.
Facebook and its instant messaging service WhatsApp has largest user base in India. India has 41 crore Facebook users. As per Statista database, globally, Facebook has 2.853 billion monthly active users. That means its 14% users sit in India and the platform in registering a good growth year after year. The second largest market for Facebook is the US where it has 19 crore users.
According to a report from Social Media Today, Facebook though added 5 million active users, it lost when it came to daily active users, despite a home-based lifestyle due to the COVID pandemic. Stagnating growth in its most valuable market, the US, is clearly a warning sign to look for other markets to register user growth and a possible advertising market and risking Indian market would only double the jeopardy.
Facebook’s messaging platform WhatsApp has 53 crore users in India, i.e., 39% of Indian population of 136 crore people or 75.71% of its 70 crore internet-enabled population. WhatsApp Payment went live in India in December 2020 and with its big user base, the service is expected to churn a huge chunk of revenue from the digital payment sector in the country that will touch the $1 trillion mark by 2023 says a Bloomberg analysis.
For Twitter, the American microblogging website, India is the third largest market with 5% market share. In June 2020, Managing Director of Twitter India, Manish Maheshwari, said India was important for Twitter as it was the platform’s fastest growing market.
Given their expectations and the large user-base these companies have gained in India, that one day may provide a significant advertising market, the confrontational attitude would only harm their future business operations, especially when India is registering an exponential growth in telecom sector.
A McKinsey analysis says data costs have fallen by 95% in the country since 2013. That means more and more people are using internet, particularly on mobile phones with 87% teledensity in India. As per Telecom Regulatory Authority of India February 2021 database, the country has 74 crore wireless or mobile broadband users. These broadband users need a smartphone to operate these social media platforms.
As per Statista database, 24% mobile subscribers were using smartphone in India in 2016. The penetration rate reached to 42% or 15 crore smartphones in 2020 and is projected to reach at 51% by 2025. The McKinsey analysis says the number of smartphones would double by 2023. It means more digital and social media uses by the mobile phone users. That, in turn means more user-base growth numbers for the social media companies and so more possible advertising revenue in future. Couple it with a Cisco report that says, by 2023, the internet use base India would be 90.7 crore people strong.
To sum it up, India is a future market for these social media companies.