India is increasingly becoming a market of interest to the Big Tech companies, which were all part of an antitrust hearing in the US Congress this week. Google, Facebook and Amazon registered healthy profits in the April-June quarter, despite the pandemic.
During the earnings call of all three companies on Thursday, India found a mention as an area of investment, and all of them have already promised to invest in India. In 2020 alone, Amazon, Facebook and Google have made announcements to invest in India.
In January, when Amazon chief Jeff Bezos visited India, he made announcements to invest a $1 billion to help in digitising small and medium enterprises. This month, Google announced a Rs 75,000 crore ($10 bn) digitisation fund (of which Rs 33,737 crore went into Jio Platforms for a 7.7% stake), and Facebook was the first to pick up a 9.99% stake in Jio Platforms for Rs 43,574 crore.
During Alphabet’s earnings call, the company spoke about the digitisation fund, which it wants to deploy over the next five to seven years.
“We'll enable information in local languages and apply technology and AI to important areas like health, education and agriculture. Jio platforms is the first partnership agreement in the fund and will work with them to help millions of users in India become owners of smartphones,” CEO Sundar Pichai said.
Alphabet, which is the parent company of Google, saw its revenue declining for the first time to $38.3 billion (down 1.7% from the year-ago period) in the quarter that ended June 30. The company reported a net income of $6.96 billion in Q2.
Amazon, on the other hand, is betting most on India among all its international markets. When asked about Amazon’s investments internationally, Brian Olsavsky, Amazon’s Chief Financial Officer said that India was “obviously” the biggest one.
“What's going on internationally is we have some very healthy established countries that we've been in a long time. And we have probably accelerated their adoption of Prime benefits. We've pushed video and devices and music and other things to those countries probably earlier in the life cycle than you would have seen in the U.S. So there's a bit of a forward investment on Prime benefits in many of those countries, but what you also see are investments in new countries,” he said.
Amazon reported a 40% increase in net sales to $88.9 billions Q2, compared with $63.4 billion in the same period last year. Net profit increased to $5.2 billion in the second quarter, compared with net income of $2.6 billion in the second quarter 2019, the company said in a statement on Thursday.
This year will also be the first time that Prime Day is not being held at the same time across the world. While it is being delayed in other parts of the world, it will be held in India on August 6 and 7.
Dave Zapolsky, Amazon’s counsel, also said that they launched new features in India to help with digitisation efforts. “They have some goals there around getting more sellers on board and hiring many more people as well, so a lot of focus there,” he said.
Meanwhile, facing a massive ad boycott over its inaction to remove hate speech, Facebook shares reported net income of $5.18 billion as revenue jumped 11% to $18.69 billion from $16.89 billion a year ago.
The monthly active users (MAUs) hit 2.7 billion while daily active users (DAUs) rose 12% to 1.79 billion (as of June 30). Facebook said it counts 3.14 billion monthly users across its family of apps (Instagram, Messenger and WhatsApp), compared to 2.99 billion in the first quarter.
CEO Mark Zuckerberg said that there is “huge opportunity” in India for companies to buy and sell through WhatsApp. He referred to their partnership with Jio, where JioMart will be integrated with WhatsApp.
“That starts with enabling payments. A big part of the partnership that we have with Jio will be to wire up and get thousands of kiranas, small businesses, across India on boarded onto WhatsApp to do commerce there,” he said.
Once they prove it in India, Zuckerberg said he wants to expand this to other countries as well. India is WhatsApp’s biggest market.
“But there's no doubt that India is a huge opportunity. It is the largest country by the size of our community that we're serving already, and it should be one of the faster-growing business opportunities as well to help businesses grow there, and we're very excited about that,” he said.