Welcome to India


Mumbai, India’s capital. Population 18.4 million.

This week you will be hard-pressed to find a financial periodical, blog, or website that isn’t raving about India as the next land of opportunity for the digital payments industry.

From the tidal wave of news reports, the casual observer might conclude that, by sheer coincidence, independent reporters happened upon the same data and drew the same conclusions at exactly the same time.

In fact, nearly all of the news stories can be sourced to a joint study that Google and Boston Consulting Group undertook with Nielsen and published on Monday. You can tell they all used the same source because they all credit the study and because they all cover pretty much the same copy points. These include: 

  • Digital payments is relatively new to India.
  • People in India really dig their smartphones.
  • Convenience matters to Indians.
  • Roughly half of Indians have no banking relationship, which means they don’t have credit cards
  • 81 percent of existing Indian users like digital better than other payment forms
  • More than half of Indians are projected to use digital payments by 2020
  • The top 100 million digital payments users are projected to account for 70 percent of gross merchandise value
  • Ergo, digital payments is expected to take India by storm, to the tune of a projected $500 billion, by 2020. If I did the math right, that’s in four years.

For more information and details, the Google-BCG report is well worth a read.

Most of this week’s articles feature a quote from Rajan Anandan, Google’s vice president and managing director for Southeast Asia and India, so I suppose it’s fair game for me to reproduce it here:

“Spurred by smartphone penetration, and supported by progressive regulatory policy, the digital payments industry is at an inflection point and is set to grow 10X by 2020. It is telling that half of India’s internet users will use digital payments and that the top 100 million users will drive 70% of the GMV – a clear indicator of the growing importance of the digital consumer.”

Meanwhile, four days before the release of the Google-BCG report, Business Insider reported that in Bangalore, FlipKart will invest the equivalent of over $100 million U.S. in creating its own digitial payments business in India. 

This is all exciting news. Just a couple of cautions: 

First, the Nielsen study and the subsequent report rely on self-reported data and inference, which aren’t always reliable. You cannot assume that people will act as they predict. To wit, Harry Truman did not lose to Thomas Dewey

Second, it’s not always wise to launch big plans from one report based on one study. The wiser course would be to conduct additional studies to see if they validate or challenge the results. I realize that said wiser course can burn development time and give competitors a head start. The solution may be to conduct further study while at the same time putting plans in motion, remaining open to adapting should the data warrant. 

India may well mushroom into one of the leading happening online payments markets. My cautions mean only that, as with any study, we should consider the data and conclusions with care. In no way am I dismissing the research or suggesting we ignore it. In fact, I’m pretty psyched about it. After all, the folks at Nielsen, Google, and BCG are pretty danged bright. With the rapid advance of mobile payments throughout the rest of the world, there’s no reason to suppose its advance won’t be as dramatic or more so in India. 

India has 22 officially recognized languages. Besides those, it has over 150 unofficial languages spoken in significant numbers. Besides those, it has over 1,600 languages spoken among smaller populations. Even within one country, language differences portend cultural differences. These can be from the nuanced to the obvious. That means a marketing strategy that works with one population may not with another. Moreover, there is no such thing as word-to-word translation. Translation is more of a concept-to-concept thing, with an ever-present danger of tripping up due to connotation, idiom, or local custom. 

Marketers, your challenge awaits you.

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