Google plans global e-commerce debut from India market

Sundar Pichai-led Google is seriously evaluating getting into e-commerce and India could be the first stop, it is learnt. The launch could coincide with Diwali later this year, a source said. The search giant, which was in talks to invest in Flipkart after Walmart’s $16-billion deal to buy 77 per cent in the Bengaluru firm, is now trying to enter the Indian e-commerce space on its own.
 
With such a move, Google could take on both Amazon and Flipkart in a sector pegged at around $38.5 billion and projected to grow to as much as $100 billion by 2020 in the country. While the American major was getting ready to invest at least $2 billion in Flipkart post the Walmart deal, it may have subsequently decided to opt for the route that Amazon had taken five years ago to launch solo in India, another source said.

 
‘’Google started having second thoughts as it felt that the valuation that SoftBank Group, Tiger Global (investors in Flipkart) quoted was inflated,’’ a Flipkart executive who didn’t want to be named said. After its deal with Flipkart, Walmart announced that it was hoping some other global investors would now buy stake in the firm. The impression it gave out was Google would invest at a later stage. However, Google is learnt to have backed out after witnessing how Walmart’s shareholders were getting apprehensive about the $16-billion Flipkart deal.
 
Google did not reply to Business Standard queries on the company’s e-commerce plan. An executive called it ‘’speculation’’.
 

In an indication of Google’s growing interest in ecommerce, earlier this week, the California-based firm announced an investment of $550 million in JD.com, a leading Chinese e-commerce company. The two companies said in a statement that it was part of a strategic partnership to jointly develop markets. Walmart and JD.com had also entered a strategic partnership earlier.
 

According to people in the know, Google’s India e-commerce plans have been in the works for close to one year, but “rather secretively’’. The initiative, being spearheaded by Caesar Sengupta, who leads product management at the global headquarters, is likely to test the e-commerce launch in India before going to other emerging markets, sources pointed out.
 
In the run up to the likely launch of ecommerce, Google has taken steps to understand the universe it wants to get into. For instance, it has been associated with some 2,000 workshops helping the company to identify sellers on its e-commerce platform. It has also partnered with business chambers for digital programmes. Many pilots are being scaled up to meet the ecommerce target, a source pointed out. Also, more than 15,000 sellers have been identified for the Google e-commerce platform. In fact, Tez, a payment app under the Google umbrella, was launched with the idea of populating the seller database, a source said.
 
Leaving nothing to chance, Google has sketched out its rural plan as well. Mainly through its ‘Saathi’ initiative. Through 48,000 saathis across rural India, Google wants to offer assisted shopping till the masses are comfortable with the process.
 
In preparation, the tech giant has been refining Google Shopping, its paid advertisement listing service. The company plans to make it more of an omni-channel experience to encourage brick and mortar retailers to list with Google. The company has launched this service in the US where it allows offline retailers to see what is in their stores for free as well as mark on Google maps. The company plans to launch this feature along with several others to increase the number of sellers on its platform.
 
The estimated 18-million subscriber base of gmail will help Google’s e-commerce, an analyst said. Also, the vernacular features are likely to give the company insight into millions of shoppers, he added.
 
Explaining why the company waited this long, a source quoted above said Google wanted to understand the India market better. ‘’It believes that it is better to have a budgeted spend than unbudgeted and unlimited discounts that the other cash cow businesses have to fund in perpetuity,’’ he said.