Google may steal Amazon, Flipkart's Diwali bonus; set for e-commerce debut

It’s official. Google will make its debut in India’s e-commerce and retail ecosystem this Diwali via its payments platform, Tez, rechristened Google Pay.

From tying up with more than 2,000 e-commerce companies, including big names such as cab aggregator Uber and movie ticketing platform BookMyShow, to adding about 1.2 million offline merchants, including the likes of Big Bazaar, Google is on a hyperdrive to create an ecosystem where everything will hinge on the payments app. The company is also going to offer consumers instant loans on its platforms and has partnered four banks — HDFC, ICICI, Kotak Mahindra and Federal Bank.

According to Google, a pre-approved loan limit for individuals, based on their bank account and Tez transaction history, will be set. The app’s users will get the money deposited directly into their bank accounts. 

The technology giant rebranded its made-in-India Tez app, launched in September last year, as Google Pay, with an eye on expanding the platform to other markets. “We have learned that when we build for India, we build for the world,” Caesar Sengupta, general manager of payments and vice-president of Google’s Next Billion Users initiative, said at the ‘Google for India’ event in New Delhi on Tuesday. 

While the company has kept its e-commerce plans under wraps, this is being touted as the first move to enter the segment. “The company has 1.2 million merchants. It is partnering online cab aggregators, travel companies and ticketing firms, as well as expanding its tie-ups with brick-and-mortar retailers. It is all pointing towards creating an ecosystem which Amazon or even Flipkart has. The next step will be getting into the online marketplace,” said a source close to the company.

With Amazon as well as Flipkart trying to reach customers directly, Google is losing out on advertisement sale revenue. Now, with e-commerce, Google is hoping to make users stick to its platform. 

Sources said just like Amazon, Flipkart and a few other online marketplaces, Google would soon be going to help merchants secure short-term loans via banks. With such a move, Google would take on both Amazon and Flipkart in a sector pegged at $38.5 billion and projected to grow to $100 billion by 2020 in the country. 

Google planned to invest at least $2 billion in Flipkart after the Walmart deal. However, it subsequently decided to opt for the route that Amazon had taken five years ago -- to launch solo in India, another source said. Google’s growing interest in e-commerce, could be gauged from the fact that the firm announced in June an investment of $550 million in JD.com, a leading Chinese e-commerce company.

Google has already 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 identify sellers on its e-commerce platform. It has also partnered business chambers for digital programmes. More than 15,000 sellers have been identified for the Google e-commerce platform. 

Leaving nothing to chance, Google has sketched out its rural plan as well, mainly through its ‘Saathi’ initiative. Through almost 50,000 saathis across rural India, Google wants to offer assisted shopping till the masses are comfortable with the process.

Google all the way

• 10 million SMEs catered to by Google My Business
• 55 million downloads of Tez (renamed Google Pay)
• 22 million people use Tez everyday
• $30 million value of the transactions at an annual rate