In 2020, Covid-19 and the national lockdown expedited internet penetration, and the 3Es-- E-commerce-Entertainment-Edtech--drove internet adoption. In this new reality, can a company without a vernacular strategy penetrate deep in the Indian market? The answer is a resounding No!

According to a 2020 report by ICUBETM, prepared by data, insights and consulting company Kantar, as of May 2020, rural India had more active internet users at 264 million, more than urban India’s 210 million. Content consumption has also gone up considerably; with internet connectivity becoming cheaper and easier to access, underscoring the trend of tier 2 and 3 markets driving the digital revolution in the country. While the latest numbers are pushing 700 million, local language content and video lead the internet boom in rural India, with a 2.5x rise in penetration in the last four years. Still, Internet penetration in the country stands only at around 40 per cent, with the immense potential of adding new users in the next few years.

Local language content

The English-speaking population as per the last census in 2011 was 125 million, which was about 10 per cent of the total population. Even if the number had multiplied rapidly in the last decade (which is unlikely), it would still be below 20 per cent. According to a Lok Foundation survey, only 12 per cent of urban and 3 per cent of rural people were English-speaking. As per a report by Google India, 9 out of 10 new internet users in the country are consuming online content in Indian languages. This will get more skewed towards local language content, as 90 per cent of the users coming online now will be from rural areas, the next billion.

Flipkart reported 15 million daily users connecting through their vernacular interface within a year of launching in Hindi, and their stickiness was a whopping 95 per cent. One of our portfolio companies, Jiny, also reported an increase of 20 per cent conversions by providing vernacular audio/text support while transacting. Those are numbers that can determine whether your business will succeed or not!

As founders pick up on this insight, they have begun incorporating vernacular aspects into their digital solutions to tap into regional communities, to expand their customer base, and explore the opportunities that arise from it. Sectors, like edtech, gaming, entertainment, health, agri, E-commerce and SMEs are leading innovation in this space, with startups such as Sharechat, Roposo, and Pratilipi showing growth. One of the challenges that comes with tapping a new user base, is minimising the barriers to the adoption of a product or service, and here is where providing content in local languages has appeared to become a vital strategy, showing significant results.

AI chatbots in use

Vernacular textual content has its own challenges, due to the sheer diversity in a country like India, but E-commerce platforms like Flipkart are overcoming this vernacular search challenge by focusing on visual and voice-based content by using newer technologies like AI and ML. Following in their footsteps, more e-tail platforms are now using AI chatbots and voice-to-action SDKs, which ease the engagement process for regional consumers. Another sector where non-English consumers are accessing content and services is healthcare, as the current situation has upped the demand for quality health information. Similarly, the agritech sector, which is booming, is predicted to be largely dominated by non-English speakers, and startups like BigHaat are prioritising video vernacular content, which is driving more users to their platform.

Vernacular tech is time-consuming and expensive, but the cost to opportunity is huge for this segment, as it has the potential to expand horizons for businesses and companies in the next billion market. A report by research and consulting firm RedSeer, stated that vernacular monetisable Internet users have three times the total spending power of monetisable English internet users, and this makes them capable of fuelling immense growth in the coming years.

The challenges remain - vernacular in India is not one bucket - 22 languages and 1,600 dialects! Building for this is not easy. It’s not only expensive, but requires cutting-edge technologies to create solutions for audio and chat bots. In addition, businesses have to focus a lot more on UI, as that will make or break the adoption. UI needs to be more intuitive, less cluttered, less clicks, not overwhelming and has to appeal to them as being made for them.

There lies the opportunity for entrepreneurs and technology folks! And investors are eager and willing to back these bets. Let us go all out and create businesses for the next billion as consumers and producers.

The author is co-founder and managing partner, Ankur Capital

Related Topics
comment COMMENT NOW