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Seems like a headline grabbing thing in the current geopolitical context. They are stating $10B in the next 5-7 years. Quite sure a company like Google would have a spend like that earmarked from way before in one of the big emerging markets like India. Facebook, Amazon, Apple, Google all have been working towards this for a while now.
Seems like a headline grabbing thing in the current geopolitical context. They are stating $10B in the next 5-7 years. Quite sure a company like Google would have a spend like that earmarked from way before in one of the big emerging markets like India. Facebook, Amazon, Apple, Google all have been working towards this for a while now.
Earlier quoted context omitted.
China PR makes me question a lot of things. For example, I’ve always been told that protectionism doesn’t work but with the great firewall it seems to work just fine in China PR. How do I explain it?
Protectionism only works in specific situations. For example you have a competent workforce and instead of making them work in a foreign country because that's where the multinational companies are, you introduce protectionist policies to keep them in your country. Getting to this point requires decades of focused efforts. You don't just introduce protectionism and get results automatically. Protectionism doesn't wor…
Mind you they are making a profit, not running a charity
There's been a recent surge in American companies investing in India primarily through Reliance Jio (owned by Mukhesh Ambani who's got a good connect with the current ruling Government). It's been spiking since the Anti-China sentiment led Buy and Use 'Made in India' cries. Government has even asked eCom Flipkart and Amazon to display Country of Origin for each product. With all these, This investment from Google see…
I don't see how it's not alarming for Indians that one key person/company connected to the govt is the sole beneficiary of incoming businesses into India.
The recent spate of investments in Reliance JIO, have been just stake purchases. He is selling stake in his company to get capital for expansion.
Ambani has signaled that he wants investment to further grow an already rapidly growing empire of media services.
A few things are very favorable to Jio
a) Due to COVID and the expectation that this pandemic and its ripple effects will be felt for a few years, there is a very high likely hood that new customers will start consuming digital media services. And that is the key. Investments in JIO reflect the fact that it is the only company that has all it's cards right to capture the new user market.
b) Also, JIO has been at the cusp of an already rapidly increasing user base, that includes a large portion of rural people. It has seen a massive growth in user base and actual users too (No one is simply taking a phone connection and keeping it. They are actually using their JIO connections to consume content)
c) And the pandemic has come at just the right time too. Old guard companies are caught on backfoot. There is tremendous good will in people for JIO. JIO reduced costs 30X for data. It was a game changer. Peoples media consumption in India exploded.
d) In addition to this, Reliance group also has its hands in the Media and Entertainment industry. Not to mention retail, FMCG, etc.
So, as on date, JIO has the following services fully available to a large and every increasing base of users, this is apart from dead cheap 4G internet connectivity on phones and dongles.
1) Movies 2) TV Channels 3) Retail Shopping, they recently launched a competitor to Amazon. 4) Games 5) Educational content.
and a myriad more.
But here comes the best part. There are a couple of reasons India tailor made for services.
1. It has a large pre-teen, teen and young adult population, that will dominate consumer markets for at-least 5 decades. 2. It has 28 states, 122 major languages, and similar set of cultural groups. So you have ample amount of scope to localize content and have a good audience for that content. 3. Indians love to indulge in languages and cultures from other parts of India. Punjabi songs are loved all over the country. Telugu cinemas have huge markets in southern states. Tamil movies are revered all over the country. And Indians consume a lot of dubbed content. Including international ones, like Korean etc. So what this means is that media produced for one local culture / language, if received well, has a ready market all over India. This reduces risk and increases rewards. 4. Indians love to consume content. We are a noisy civilization. We consume a lot of content and want new content all the time. Movies are a huge part of the daily lives of rural villages. 5. Large number of people in rural areas have been using smartphones for the past 5 years, thanks to reducing handset costs and usage costs. They are already consuming content on the internet via Youtube, etc. They are a ready market to push content and services too.
I suspect JIO is looking for large investments to create new content for its media services and setup a distribution network for it's retail services.
Additionally, Reliance is highly respected in India. When the current CEOs father ran the company, millions of middle-class families in India bought houses, cars, got their children married, gathered retirement funds, etc riding on the sheer growth of Reliance as a company.
My father was also one of them.
Earlier quoted context omitted.
Protectionism works when you're weak and try to develop your own industry (all East Asian countries followed that path). Protectionism hinders you if you're strong and try to penetrate other countries' markets. Protectionism is often detrimental to consumers. Nothing is black and white.
East Asian development was not based on protectionism, it was based on providing goods/services for export (even when "weak") which requires openness to competition on a global scale. Protectionism was tried in Latin America and even in India prior to the 1980s and 1990s, and it has consistently been a failure.
Earlier quoted context omitted.
Companies don't invest billions in India to shaft China, they're doing it to maintain or grow their position on the Indian market, which is a huge one. If India suddenly sees a wave of "build it at home" sentiment then Google or Apple won't want to be left out and fall behind the competition. Publicly traded companies can't afford to play favorites, they "have to" go where the profits are and make the best of it, whe…
No, but they need to make logical decisions about which market to invest in, and it seems they've picked a favorite and decided ? If I was making that decision, it would be clearly easier to do business in India rather than China and likely far more lucrative with less concerns about property theft, censorship and the stain that human rights abuses will leave. I don't know if you've ever tried to setup anything in Ch…
It doesn't look like this to me. India's population is within 50 million of China but has double the growth rate. Even if the GDP per capita (nominal or PPP) is about half of that of China, it still has a huge potential as a market and it never received enough attention. Companies are starting to see that potential now. We shouldn't anthropomorphize company decisions, they are generally purely pragmatic. There were money on the table, it doesn't imply India will be the biggest or most profitable market or production center.
While domestic consumption in big markets that demand local production will be satisfied as such (so an Indian iPhone might say "Made in India"), companies will still supply other markets with products coming from the factory that allows them the highest profits (so a US or EU iPhone will likely still say "Made in China").
> it's not exactly a straight forward process or something you'd want to have to do often.
Designing and building an iPhone are also not very straight forward but if it's profitable companies will do it. That's why so many companies still operate in China despite the chicanery.
There's been a recent surge in American companies investing in India primarily through Reliance Jio (owned by Mukhesh Ambani who's got a good connect with the current ruling Government). It's been spiking since the Anti-China sentiment led Buy and Use 'Made in India' cries. Government has even asked eCom Flipkart and Amazon to display Country of Origin for each product. With all these, This investment from Google see…
I don't see how it's not alarming for Indians that one key person/company connected to the govt is the sole beneficiary of incoming businesses into India.
May I know exactly what sort of connections are we talking about it? Big business families have always had some relationship with politicians in India but they were less evident 2-3 decades back then due to then governments' incline towards socialism.
Is there even a way for Google to invest in a high-corruption country like India without paying bribes (which would break US anti-bribery laws)? I'm pretty sure such an investment would be impossible in e.g. Russia, where many a hand needs to be greased before anything can happen.
Which departments Google would need to bribe to get their work done?
Earlier quoted context omitted.
Protectionism works when you're weak and try to develop your own industry (all East Asian countries followed that path). Protectionism hinders you if you're strong and try to penetrate other countries' markets. Protectionism is often detrimental to consumers. Nothing is black and white.
East Asian development was not based on protectionism, it was based on providing goods/services for export (even when "weak") which requires openness to competition on a global scale. Protectionism was tried in Latin America and even in India prior to the 1980s and 1990s, and it has consistently been a failure.
Domestic markets were kept relatively closed in order to foster development of local industry and companies.
Earlier quoted context omitted.
I think this rather shows the continued weakness of India. On one hand, China and nationalism are used as a tool by the Indian government (not least while the Covid-19 situation goes pear-shaped), on the other hand they are at least as dependent on US companies, if not more. I think India should rather reflect on China's industrial strategy, including investments in infrastructure and fostering the development of nat…
More broadly maybe one should think of the China model as state-led capitalism and note that it did not origin in China but in Japan and succesfully carried countries such as Taiwan, South Korea, Singapore out of their development country status. It is not the same as nationalism and in particular for India, strong nationalism has the flip-side of igniting dormant conflicts with it sizeable muslim minority.
Also don't forget the Prussians, where Japan got it from.