IT IS ALREADY DARK in the New Delhi suburb of Noida on a night in December when I arrive at the home of one of the biggest YouTube stars in all of India. Yet the person who greets me at the door defies every stereotype the word YouTuber evokes. Nisha Madhulika is a 60-year-old grandmother dressed in a long robe and sandals, with her hair tied in a ponytail. After settling me in an armchair in the living room, she plies me with home-baked cookies. “You must try them,” she says, in a voice barely above a whisper, using her son to translate from Hindi.
Given the transformation unfolding in India, it seems fitting that Madhulika, with 6.5 million subscribers to her YouTube cooking channel and 200,000 more signing on each month, has hit it big late in life and with little forewarning. That, in a nutshell, could just as well describe India’s belated embrace of all things digital. Hundreds of millions of Indians have logged on to the Internet for the first time in the past two years. The surge is owing to aggressive government policies aimed at connecting Indians online and plummeting prices for data and smartphones. About 390 million Indians are now active Internet users, almost a third of the population and twice as many as were connected in 2016, according to industry estimates. For context, that’s more Indian Internet users than all the people who live in the United States.
A generation ago, the U.S., Europe, and then China added similarly huge numbers of people to the Internet. Yet the process in those areas was steady and gradual, moving from dial-up modems through clunky Wi-Fi to mobile tech. Contrast that with India, where hundreds of millions of people have skipped the early-stage Internet altogether; many have never even touched a computer. Instead, they have started online by downloading apps and watching mobile-phone videos at a furious rate. Since 2017, Indians have begun downloading more apps than Americans do. And last year, India became the biggest consumer of mobile data on Android phones. “We have not seen this kind of user behavior anywhere else in the world,” says Rajan Anandan, vice president for India and Southeast Asia for Google, the purveyor of Android mobile-phone software. Google also owns YouTube, which started the phenomenon of user-generated video in Silicon Valley more than a decade ago and now has 245 million Indian users. “This is perhaps the world’s first video-first digital economy,” he says.
For Western companies vying to increase their slice of global markets, India’s steep digital trajectory has proved a strong draw. Perhaps no company embodies the huge hurdles of ramping up in India, and the huge payoff it might bring, as much as Google. The company’s growth depends on finding ever more users, as advertising drives more than 80% of its profits. Given that Google and other Western giants essentially are shut out of China, no other country offers a bigger opportunity to add hundreds of millions of consumers than India. “This is one of the largest populations in the world, with an income base that is a lot lower than elsewhere, so it is challenging,” says Brent Thill, an analyst in San Francisco with investment bank Jefferies. Still, he says, with more than $100 billion in cash, Google can spend years creating its India business without fretting over the cost. “They have an incredible asset base to use to go after that population,” Thill says.
That much was plain when I crisscrossed the country late last year, from remote villages to the vast urban sprawl of Mumbai and New Delhi, to see how Google was building its infrastructure in India, as well as how the country has become a crucial testing lab for the company. The process of scaling up Google’s India business is in full swing. But it will be both long and costly. Google declines to quantify its investment in India. “It is a lot,” says Anandan, the region’s top executive. “It is an investment we are going to make for the next 10 to 15 years, to really get people online,” he says, adding that true profitability “is long term.” Google also won’t describe the size of its business in India, but analysts peg annual revenue at $1.3 billion, a paltry portion of the company’s $136 billion in 2018 revenues.
The impact of Google’s work in India, nonetheless, is being felt not only in India but also far beyond, including more than 7,000 miles away, at the company’s headquarters in Mountain View, Calif. Increasingly, India is becoming the blueprint for Google’s eventual push into dozens of other emerging markets, where poverty, illiteracy, and costly but slow service have kept most people off the Internet. These include some of the world’s fastest-growing economies, like Indonesia, with 260 million people, and Nigeria, whose population is on track to overtake that of the U.S. by 2050. “We are thinking of products from scratch,” says Josh Woodward, director of product management for Google’s “next billion users” team, which the company formed in 2015 to focus on new markets. “If you were to build a product for Mumbai and not Mountain View, what would you build?” asks Woodward, illustrating the unit’s approach, which it expects to evolve over “generations.”
Google’s executives likely will not be around to see how that question is answered. They also know there is genuine good to be done—and a ton of money to be made—by the companies that figure out how to bring Internet service to the vast numbers who still don’t have it. “The big question is, What does it take to get them connected?” asks Google’s Anandan. “India absolutely will tell us a lot about what it really takes.”