This blogpost shall be a commentary on the Gulf News Article ‘Asia is the real battleground for all things internet’ by Annet Aris, INSEAD’s Adjunct Professor of Strategy, published on the 8th of Sep, 2017.
Aris, of INSEAD, states that last year marked a historical milestone: For the first time, more than 50 per cent of the world’s internet users are in Asia. The Asia-Pacific now accounts for more than 50 per cent of smartphone users. More than 21% of them are coming from China alone and 14% are coming from India. Given that only 1 in 2 Chinese and 1 in 3 of Indians are currently online, this statistic is bound to grow in a staggering rate year to year.
Given such rise of connectivity and market size, it is expected that Western, especially American internet giants like Amazon, Facebook, Google and Apple would be hungry to capture the market share in Asia. Yet, in many cases local competitors could withstand the American pressure due to the large local market and the national regulations. Moreover, the peculiarities of the local conditions restricted many western companies to just copy and paste their business model on the Asian consumers. Such peculiarities include differences in infrastructure referring to low or lack of internet in many areas, differences in consumer behavior and expectations as well as the lack of supporting services such as banking that allow for successful render of internet services in the west. Innovating in such scrutinized environments led Asian internet firms create competences that are better fit and are immune to the local changes.
China took a restrictive path not allowing Google and Facebook to enter the market allowing for its own creations such as Baidu and similar services. India on the other hand, played a more democratic game allowing for foreign competition from the East and West making itself a battleground of all internet. Given that Amazon is competing with locally grown, but Chinese half-owned Flipcart only reiterates the fact that it is a battle-field that benefits the consumers at the cost of local competence creation. Similarly, the Indian mobile payment system PayTM and Uber competition, Ola are majorly financed and owned by the Chinese giving both control and equity away.
On one hand, by allowing global free competition from West and East, Indian consumers are benefiting the most through everyday lower price of services due to the throat-cutting competition. Yet, on the other hand, India could remorse the fact that it didn’t build and own its own competences in the field of Internet in the future given that these services are way beyond just the service. It is about the indispensable data that it generates. Such valuable data of Indian consumers in the hand of other countries including its disputed neighbor China could even turn into a national security issue. Given this intelligence that these companies are gathering, should they stay within the national borders or not?
Source:
Aris, A. (2017, September 08). Asia is the real battleground for all things internet. Retrieved September 19, 2017, from http://gulfnews.com/business/sectors/features/asia-is-the-real-battleground-for-all-things-internet-1.2086726
