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Is YouTube the Next Indian Search Engine? | EMQQ

Likely, if you are searching for information on a subject, you started on Google. In fact, according to Statista, Google commands nearly 79% of desktop search traffic in the United States.[1] That figure was even higher in other countries.

However, India is experiencing a rapid transformation in the behaviour of its online population. Rather than utilising textual based search engines and viewing static websites, many in India are embracing video, including in their online searches.

What is driving this shift and what are the potential implications for internet and ecommerce in India?

Declining Data Costs

According to an article in the Wall Street Journal, 4G data costs have declined to under $2 per month.[2] With this decline, the volume of video that Indians are streaming has grown over 10-fold, according to the article, bringing their data usage to 8.5 gigabytes of data per month, or more than 40 hours of video.

Mobile enthusiasts are using their smartphones to watch and share video clips. They also use Youtube to watch instructional videos such as math and science explainer videos and use Youtube as a search engine much as Google is used for search.

Waste Not, Want Not

Another factor driving the surge in video viewership and data usage is the tendency of many in India to make sure that they utilise their entire data allotment. One young man interview in the Wall Street Journal article will switch to his mother’s smartphone after using up his daily limit, explaining that it would be a waste if her data wasn’t used.

Indians like to download as much content as possible. They carefully monitor their allotted data on a daily basis and when they reach the final part of the measurement period, they will binge download to make sure that they use up every byte that they purchased.

Changing Consumer Behaviour

According to the Wall Street Journal, there is a marked difference between the way that many in Southern Asian countries are gaining their first access to the internet when compared to more developed nations. Many are coming online through video rather than static websites. They may be more drawn to swiping, viewing, speaking rather than typing, searching, and reading.

As a result, many in India are using video sites, such as YouTube, as a search engine. They often use video to search for categories such as medical and financial advice, travel tips, education, and religion. As the article pointed out, YouTube is their Google.

Internet Companies Respond

YouTube is responding by increasing its content and offering it in a wider variety of languages to give viewers what they are looking for. One of YouTubes most-viewed channels is T-Series which is backed by one of India’s oldest media companies. The channel features music videos.

Many leading internet media and social networks, such as Facebook, Netflix, and Amazon, are increasing their video content to appeal to the Indian market.

Highly Connected Market

According to data from Statista, India, with over 462 million as of December 2017, has the second most internet users in the world.[3] However, with a population of over 1.3 billion, the internet penetration rate is relatively low.

Most of India is accessing the internet via mobile devices. As of the end of 2017, there were over 320 million mobile users in India, according to Statista.[4] That number is projected to increase to over 492 million by 2022.

Projected Growth

The Wall Street Journal article noted that the digital advertising market in India is only around $2 billion per year. But, citing a study by KPMG, that could surpass $6 billion over the next five years.

Opportunities

While the way that Indians are accessing the internet is different than many countries with high penetration rates, the good news is that they are embracing online content. Companies will need to continue to rethink the way they present content to be successful in the Indian market. They will need to appeal to the country’s preference for video and more interactive approach to online viewing. But, there is great potential for those that are able to adapt.

The Emerging Markets Internet and Ecommerce ETF

The Emerging Markets Internet and Ecommerce ETF (EMQQ) invests in internet and ecommerce companies operating in the emerging markets. As appropriate opportunities present themselves to gain exposure to the online market in India, EMQQ seeks to gain access to them. Investing in EMQQ may provide investors with access to the Indian online market.

Article Date: 3rd March 2019.

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