According to a veteran internet analyst, India is emerging as the testing and acquisition playground for global consumer technology companies, especially the so-called FAANGs.
According to RBC Capital Markets’ Mark Mahaney, self-claimed as Wall Street’s “oldest internet analyst”, India in present scenario is more popular market than countries like China because of the lesser regulations and same growth dynamics.
India is one of the largest economies and most populous countries in the world, making it into a testing ground for companies such as Facebook Inc., which tested its beta-test a payment feature for WhatsApp. Netflix Inc. also introduced its mobile plan in India at Rs 199 (US$ 2.80), which is much cheaper than what it charges for a basic plan elsewhere, and it has also created original content to target more market share.
Mr. Mahaney said, “India does have regulations, but it doesn’t seem to be as protectionist as China.” Although India has been opting to introduce new law that would need personal data to be stored locally, which could disrupt in the operations of the Internet giants but Mahaney remains confident they can still penetrate the market.
Besides organic growth, companies are also focusing on acquisition in India, particularly since they are facing more regulations back in their home grounds and in western Europe. Mahaney added, “There’s an opportunity to build growth” in Asia, particularly in India.
Amazon.com Inc. has already tried its hand at deals in the South Asian nation by trying to acquire Indian e-commerce pioneer Flipkart Online Services Pvt., before it was taken over by Walmart Inc. last year.
Facebook, Netflix, Amazon and Alphabet Inc. can all win big in India, said Mahaney, who has a buy rating on the stocks. “India is less than 5 per cent of the Amazon’s total revenues but it has the potential” to get to that level within five years, Mahaney said.