Solely speaking from a brand perspective, technology brand and any other usual FMCG brand have always been looked at differently. Rajan Anandan, Vice President, South East Asia and India, Google
, defied this as he emphasized on a brand’s need to build ‘great consumer solutions’ to meet consumer needs especially in the technology space, which is similar to any other brand. He pointed out the differentiation aspect as he said, “It’s about understanding consumer needs and building amazing products. But what has changed in our industry is that we first build for scale. We don’t worry or obsess about monetisation on day 0, day 10 or day 365 and for several years. But we do end up with the top five technology companies having $500 bn cash in bank. This exact thing will happen in India.” He was speaking at the launch of BrandZ™ Top 50 Most Valuable Indian Brands 2017 by WPP and Kantar Millward Brown on September 13.
The primary difference between a technology and FMCG company is that the former doesn’t focus on monetisation from day one, according to Anandan. He is confident that once its (technology) products acquire millions of users, revenues will be generated automatically. This is evident in Google’s case itself whose seven products have over 1 billion users: Gmail, Chrome, Maps, Search, YouTube, Google Play Store and Android, which just hit 2 billion active devices. The company’s brand value is worth more than $245 billion according to BrandZ Top 100 Most Valuable Global Brands, where it took the tenth spot.
Anandan pointed out that the potential of companies to build scale will become a reality. “Large focused brands in India are a reality. That’s why there are companies like Flipkart, Ola and Zomato. The reason for so much media discussion on this topic is monetisation. All of these companies are scaled on investment mode.”
That’s where the ‘raging’ debate on e-commerce gets focus. Valuations have gone down over the last 18 months but they are still ‘way higher’ in this industry than what they should be. Anandan threw some numbers here saying, “Last year the gross merchandise value of e-commerce industry was $16bn. It’s still very early for e-commerce in India. e-commerce hits a tipping point when GDP per capita is about $4000. In India it’s about $2000 dollars (6-7 years away from the above amount). Over the next 10 years it will be a $200bn GMV industry by a very conservative estimate. By 2023-24 we will see the inflection point. So the best performing companies in the US and China will grow at 30-40 per cent undoubtedly.”
“The winner in the e-commerce space within the next 10 years will be worth $50bn. The fifth most valuable company in India is worth $45 bn. A large number of users today and the low level of monetisation will change dramatically over next 5-10 years. The exact same dynamic will take place in logo, digital advertising, digital financial services, gaming, international services and every other segment of the Internet space in India. We are confident because India will have a large number of users who are spending an extraordinary amount of time (on these). The only question is who will win in each of these segments?,” asked Anandan.
He further predicted that going forward 10 years, most of the logos will have a technology component to them. “Given the current dynamic nature of technology and its future, 10 years from now 50 per cent (if not 80 per per cent) of the logos will be different. They will have significant technology component to them and in many ways that will reimagine their industries and reinvent their business models. So it’s the same game: Build amazing products and everything else will come,” he said.