Markets

Alphabet's Google Shifts Focus to Indian Market: Here's Why

Alphabet Inc. 's GOOGL Google climbed the ladder of success by serving citizens in developed countries.

However, as growth slowed in these markets, the online search giant turned more toward the emerging markets.

And this was clearly evident from CEO Sundar Pichai's speech in Delhi.

Key Points from the Speech

  • Google is teaming up with the National Skill Development Council to train two million Android developers in India.
  • Stressing on the significance of Internet connectivity, Pichai said that it is vital to broaden the reach of Internet across the country and that 'mobile internet can be a game changer'.
  • Free Wi-Fi is being set up across 400 railway stations in partnership with the Railways' telecom wing- RailTel. Internet connectivity will be with speeds higher than what an average user gets. Mumbai Central will be the first station to get the facility.
  • It will hire people for Bangalore and Hyderabad, and build a new campus in Hyderabad to boost its capabilities.
  • Google has reached an in-principle agreement with the government for its R&D project, Loon, which aims to provide Internet connectivity in rural India.
  • Google will work on products especially for India while developing items for consumers in developed countries. For India, there could be more products that work offline and on slow connections.
  • Google announce "Tap to Translate", a feature that will lets users instantly translate text from within a third-party app.
  • It also announced its plans to get more small businesses online.

Why India is such a Big Deal

India happens to be one of the key growth drivers for Google.

And for good reason.

India's Internet base is ever increasing, especially because of the rapid adoption of smartphones. By the end of this year, according to Forbes, Internet users in the country will cross the 400-million milestone. It will thus surpass the United States to become the world's second-largest Internet market.

This projection does not include 1.2 billion Indians without Internet connectivity. This explains Google's Project Loon and its move to connect the railway stations.

The Indian government has launched a massive Digital India program to take technology to the rural masses and further increase technology adoption.

Sometime back, Google had said that "India is at the center of a digital revolution today, with millions of Indians getting online every month. India has always been key for Google and we continue to work towards evolving our product offerings for the unique needs of our users."

Also, according to a UN report, India is expected to see 7.3% economic growth next year and remain the fastest growing economy in the world in 2016 and 2017.

Conclusion

Internet penetration has already crossed 90% in many developed markets. So Google is increasingly betting on large developing countries, like India, to boost growth.

Alphabet currently has a Zacks Rank #3 (Hold).

Investors may consider stocks like Stamps.com Inc. STMP , Mercadolibre Inc MELI and Amazon .com AMZN . While Stamps.com and Mercadolibre sport a Zacks Rank #1 (Strong Buy), Amazon carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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