Episode 2: Amit Agrawal- Understanding the Indian Consumer Landscape
About Amit:
My next guest on The One Percent Project is Amit Agrawal, Founder, OckyPocky, and growth expert. OckyPocky is India’s 1st interactive English learning app for vernacular preschool kids. Amit head YouTube India and grew the business from scratch to $100 million per annum revenue. Known as a thought leader in kid-tech, internet and online video space, he has advised some of the biggest names in Indian industry, Silicon Valley and Asia.
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In this conversation, he talks about:
The Indian consumer and discusses the evolution of EdTech and the growth of Indian digital media in the last decade.
How businesses are coping with the impact of COVID, economically and culturally.
How you can create organic virality?
India
Who is an Indian consumer?
How to segment and analyse the 1.3 Billion Indian population?
Growth strategies that EdTech products such as OckyPocky, UpGrade and Coursera have used in India?
How Netflix, Amazon Prime and TikTok have entered and dominated the Indian market?
YouTube: It’s challenges trying to compete against other nimble and younger social media video platforms.
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Transcript:
*The transcripts are not 100% accurate.
Amit: I think COVID is going to change a lot of things temporarily, for sure. But there will be a huge segment of people who are going to begin to be more careful around a lot of things. So if I'm in the business of selling insurances, selling anything essentials, selling anything that keeps people engaged creatively while they're at home, I think I would be a happy entrepreneur or happy company, so to speak because the people's habits around these would change a lot. What's also changing is that around this whole, B2B layer around SaaS companies with lots of productivity tools like Slack or even Zoom call on which we are hosting this particular recording. These tools are seeing a huge change in terms of adoption because the whole country upon countries being forced to use these tools in a hurry. Literally, within less than a week, I would say a lot of companies are just forced to adapt to this whole new demand for work from home culture. So one of my friends, She's head of HR, and she was talking to her boss. He was like what does HR need to change for a potential lockdown for the next three months? What all do you want to change as VP HR? Do you want to change the hiring culture? Because for seniors, we've never hired before meeting them. How do you do that? Similarly, tools are evolving. So for example, tools with limitation and gap because they're scaling, like let's say WhatsApp video chat or video policy is limited to four, giving birth to many other tools. And a lot of people are using Zoom for audio calls only, internationally because it scales beautifully. But there are other apps somebody might've moved to a house party yet. Well, you can do video chat with more people, play games while you do that, et cetera, et cetera that has gone insanely viral in my network. I don't know what the numbers are globally. Such things like that are beginning to change a lot. On the flip side, there are businesses that are getting eroded. Travel heavy businesses, things which are very high experience, high-touch, sort of, higher end experiences sort of businesses around dining or maybe shopping, stuff like that. They're getting really into a very bad phase, and they're just battling for survival. One of my founder friends was into the travel business. He just said, okay, for the next six months or till the time things change, I'm just willing to do something pro bono because I really can't sustain this. So he's let go of his team, told them that this is all I can do and he's running errands for senior citizens in Gurugram. And I think is it a beautiful value add. I think it's also easy to monetize it as a space. So who knows? That's a pivot time for some of these guys who were low on runway time to go out and do this. Let's change gears. Talk about TV as a media habit. I think the newspaper has been hurt because it's physical. But TV or anything that's been digitally delivered inside a household has gone through a TRP, massive boom. And guys like Netflix, Amazon Prime they've been busy launching titles upon titles here in India, at a more rapid space because literally, people are running out of content that they can watch on OTT apps and on TV. It's all repeats now. So, that is creating more and more creative areas. Gaming has typically taken off. A lot of cause based products where content campaigns around cause somebody. A good friend of mine in the startup ecosystem is running a whole campaign around feeding the people who are below the poverty line. It's part of like a national thing, and they've fed like about half a million meals, totally pro bono. Totally on a private, individual-based funding initiative. And that's a great campaign that I'm proud of. I think it's a huge change just to summarize it and bring it together. The way you do business is fundamentally changing the way you look at your risk appetite buffers, When you are planning your runway. The way you plan your delivery. The way you communicate with your users for services that are shut down, like Flipkart. What kind of notification do you send to just keep your database to remember about you? That you exist in their life. So all of that has changed dramatically and sad to say a lot of people have not. and then this is a big differentiating time. We hear that every crisis is an opportunity, but I'm literally seeing it happen now because this is probably the biggest crisis I've seen in my whole life. That's changing for good about your assumptions around runway time, the way you use your messaging. The way you look at your product, delivery mechanisms and so on.
[00:05:02] Pritish: You are a founder of OckyPocky, which is a kid's education app and that is not a very simple thing because in India, number of languages, dialects start, I would say probably from English and then it goes down right into sectors and states and provinces. How would you actually define the Indian consumer?
[00:05:26] Amit: Yeah, that's a very complicated question. There's no one, Indian customer. We used to learn this framework. Earlier I used to talk about how many slice India there is a very high end of India, which is very close to lets say a very developed country economy and there is enough segment of that maybe 100 million-plus people who act and behave, no different than a typical New Yorker or a valley guy or any of the developed market that you can proxy it out. Then there is a huge middle-class economy, not just by necessarily income parameters, but social indicators. Also the way they consume products, which is like the India, India, or the Brazil part of India, as we used to call it back in the day. And then there is a third segment, which is, huge and, different, which is like below basic indices. They're struggling for day to day life. So we have all three in ample supply. The second segment is literally about 400 or 500 million people. It's not small. And, and similarly, the last one is also profiling. So, you can literally find opportunities everywhere now, because you asked the question more in context of OckyPocky and how it's involved in serving these children. I think one of the fundamental rules that we've always followed is can you be really, really specific and personal to a user? At Google, I learned focus on the user and everything else will follow. It's sort of gone into my DNA because I've been using that philosophy now for 14 years. So when we were designing OckyPocky for the first time, we designing for vernacular children. Our first prototype rolled out in three or four languages because we want to talk with their language that they care about. Specifically, with kids, they're learning their mother tongue first. We all know India is bilingual or trilingual. A sort of an economy, specifically in the middle-class bracket. There are at least two to three languages that they care about English for sure and a mother tongue for sure. And sometimes mom and dad come from different backgrounds; therefore, a third language and so on, or they moved or relocated to a different city for careers. Therefore, third or fourth language also becomes important. So we always thought vernacular. Now when you follow the first principles of common sense around STP segmentation, targeting, positioning, and therefore your communication your life is very simple. As a marketer or as a product guy, as a founder, because we followed this like simple things. Do are ads talk in the language of the user? Product talk in the language of the user? These things help adoption. So these things help us with feedback loop because people feel closer to us. We literally get like dozens upon dozens of videos every month that parents are voluntarily just sending out these clips of their child using video in a fun way. I'll give you an interesting story. So there is this family where this baby is just three years old. They barely know how to talk. We launched a content around educating children about good practices, basic hygiene,things around Corona and protecting that called Coronavirus poke. Now, this dad shots his son of three years and, Devansh is going on and on about how he's learned on OckyPocky on how to protect himself and he has sort of become the kid teacher. I was so proud of that impact it created with children that, and I find kids as teachers, very cute because they can be really simple. They can be really specific. And they, beat you down if you are sh***ting them. You can't complicate things for them. They're like, but you said this sort of a gap. So that was an experience. And, and we're so proud of sending that out. I put that on my social and we literally got like almost 50 thousand people to see my post. Wow. Across LinkedIn and Facebook. And that reach is phenomenal for that sort of content. Just a voluntary post. So when you're specific that organic virality follows that every consumer app every B2B app is looking out for and that's the benefit. Similarly, we listen to data a lot that's another principle that we follow and then we find that earlier we planning to launch a different language after English and Hindi. We ended up moving to a different language because our data told us so and just by following simple basic common sense practices it evolves going back to the real question you asked, how do define the customer? I think there are various segments. India is a bunch of diverse states diverse groups and as a product guy, as a marketer, it's not in your philosophy to be more diverse I think your product and your marketing campaign would struggle. I can share some numbers. For example, in Edtech, if a typical CAC of getting a download in B2C space is for a user is about 10 to 40 rupees. We never touched 10 rupees, and have been a tiny fraction of that. So when you follow common sense, you get the rewards of that is all I am saying. And which why I am saying build diversity into your DNA. If you're targeting India, don't come with one shop fits all. In fact, one of the biggest success stories of Chinese import TikTok.They went vernacular from day one, not only vernacular, they actually localized the product a lot. So if you go to the filters and other features around which you can use for their content there's much of local content that is available it is mindboggling. Yeah. And no wonder that they just took off and took off beyond the huge ad budget that they committed to. The product was insanely localized for local flavors and was very diverse from day one because they were not launching India. They were launching a prepared product for India, which meant I think on day one they were ready with like some five or six languages and they have a more now. So, language is one clear filter. Second, is a content making common sense? So why did we launch Coronavirus poke in English and Hindi, et cetera because that is what's the top of the town around the house? Today is an Easter Sunday when you're talking. So my child has an Easter worksheet from us. Very very simple stuff around Easter because India is not a Christian or sort of a country. Hindu are the majority. So a lot of my users don't know about Easter. I think Christmas is more widely celebrated in India. Easter is relatively less, and therefore we simplify that content. This is what the Easter story is. This is what egg symbolizes this is what bunny is about, and so on, and, and kids love it. So, it's also about localizing, talking their language, talking about the things that are happening around that, which makes a lot of sense.
Pritish: You talked about OckyPocky and you talked about TikTok and how both the businesses are taking off in their own capacity. You headed YouTube, from scratch to a hundred million per annum revenue. How do you see the future of YouTube given TikTok and multiple other, video streaming products are in the market in India?
Amit: That's a tough one. But, I'll give you the easiest stuff what's very obvious to me. What's very obvious to me is video is so big. It's beyond YouTube, of course already. And, if, you're going to videofy every single product, depending on how it works, like I'm surprised that Slack has not launched a Zoom like meeting feature. It makes so much sense. Slack is for team and teams are talking on Zoom. They could easily launch it and maybe they are, who knows? Similarly, if people do videofy everything, it's bound to create segments where no one product can fulfill the full promise. Big products they create a market like YouTube where UGC content becomes viral lot more creators are able to come on board and create great content that was the original YouTube promise. That's what they've held good for. When Snap started doing content in very different slices. The whole definition of VOD changed with them because, and that format went across to Facebook stories and Insta stories and so on. Similarly, when TikTok started, they took the whole musical.ly idea, by the way, which came from YouTube alumni. They want to do something different and disruptive in this space. And how that, you know, after Bytedance, took it over became the TikTok of today and, and just took off. I think just probably space for a lot more over here. What we're beginning to see is very normal. So even if I talk globally or I just talk India and India is now like, you know, 300 to 400 million active users on the internet. Relatively more active due to COVID more recently, but in general, fairly active. And that's bound to create segments and niches that you're not fulfilling. So I think, YouTube is experimenting. There was a recent article that came out that they are planning to launch something TikTok, like, et cetera. I think I don't know what's the right answer for YouTube there. I think they should need to develop their core better. What they do really, really well, which is monetizing through ads. Can they do it better? They've been struggling with that last couple of years due to various reasons. GDPR, though the whole kids content crisis, and I find that they are caught in the U.S, so stepping, forced to adapt a lot the core model. A lot of the creators are getting into more diverse platforms where it's easier to monetize for them because they don't work on equal democratic principles, but more on the, in a selection basis sponsorships and deals. So in Insta, for example, does not have an ad revenue share sort of formula yet, or Facebook or, TikTok. Right? So, so they work on very different, philosophies TikTok, also change the port creator DNA. They started very aggressively on what YouTube has been. Last few years, doing very passively. I think they went, one layer closer and implementing a creator campaign for each brand. So sort of, becoming the creative agency layer, without becoming an agency. So facilitation layer. YouTube has very often shy away from that. They don't go that far because I think the scale is huge. But the forced to challenge that model now in the new economic model as a product model, can they build better features, around UGC content, fake, duplicate content copyright issues are a standard problem that they face forever. At scale, every platform is solving that even though Insta is owned by Facebook, Facebook is struggling with that too today. And that's, they just need to get insanely better and sustain the core around that. And, I think that they do it, but they do it with a very big company approach. So either they should start buying our players, like TikTok like Facebook does to Insta, which is a perfectly justified strategy. Or they need to have the patience to cultivate smaller experiments, allow it to grow. Now, honestly, $100 billion company, very hard to launch from scratch. And watch organic growth, what's happening to YouTube kids. For example, if it was born in a startup and today YouTube was acquiring, or Google is acquiring it. They would have taken it really far. But because it's sort of clouded by the fact that it's a video product first with the asset of YouTube database of content. I think that strength becomes it a limitation because now you're not playing with the product format in a significant way. It's a great time for product. It has a very steady, huge audience, but why are they not able to break into a hundred million sorts of an MAU or DAU bracket? I think that's where the problem is. They tried the gaming experience separately and so on. So I think patients to grow to a level where it becomes 100 million MAU plus app from scratch is really hard. As a corporate, what's infinitely easier is to acquire a musical.ly turned into a TikTok and them with your capital, with your resource base. I expect that to happen a lot more. So there are lots happening around sports experiences. Kid's technology where I operate in OckyPocky and then so on. There's a lot happening there, but it takes some laser focus to know children grow to a certain level, frugally, on organic principles [00:18:00] before a big-money power begins to impact. And, I see that happening a lot more specifically what I've been really impressed with the short time in which TikTok has taken off, I've actively written about on my social. About the fabulous revenue engagement trajectory is still low in terms of number of hours, but that's also a bit of format here. It was enough of a lot on content now versus, but a number of users, active users their attention their repeat usage, their monetization, I think it's been phenomenal. So I'm a big fan of the TikTok journey as much as I'm a fan of YouTube journey. But I think where it's beginning to happen as YouTube now, has to deal with a more diverse world than where they started. Where they started was they were the Netflix and they were the YouTube and everybody else was trying to play a blend of that. When you were launching a Disney plus or a HotStar, you are basically playing between these two philosophies. That's fundamentally not true anymore. I think video [00:19:00] will go to a significant evolution now musical.ly sort of DNA is one approach that has worked. There will be dozens more.
Pritish: Do you think for Indians, the cable TV or Tatasky content is going to move on to YouTube, and they're just going to connect or to the internet, to the smart TVs.
Amit: I think just going back to diversity principle in India, there's going to be enough user base for people who are going to stream their OTT apps on their smart TV. That base exists today. They are using it where you as a brand or tracking it or not. So very categorical crisp answer is yes, there's enough of that's happening. On the other side, there's enough of the other kinds of users. We're not moving to smarter TV and streaming. So I think we will have both, but given the fact that the internet is still relatively a new media its growth rates will be far more impressive than traditional TV. But TV is no way, by no means on a reduced usage. As a result, there will be enough people to cut the cord, so to speak, of there'll be enough people who will refuse to cut the cord. There will be enough people not consuming Netflix content today in India, even though they have a fabulous collection. They've actively worked on the India strategy ectra on the content side.
Pritish: I want to understand how do you see Coursera in India?
[00:20:23] Amit: Coursera specifically, I think in education as a space, India is a country an economy in transition. So what happened was pre-independence. Sorry, I'm going a little bit back in history for a couple of hundred years, we being, a British colony, a lot of our local education institutions got destroyed during that journey. One of the positive things of that is Britishers gave us English, which is a more global language, in today's era than before. And then that became a huge asset, but that eroded, access to education for about a majority of kids. And that was the task post-independence with the governments with the first 50 were building the case off. Now, as a result, what has happened is because of us being a developed economy question of prioritization of resources. There is a huge supply gap. We have not been able to invest enough in education institutions. We all know about IITs, but IITs even after expansion probably about 20 in number. And they're probably like more than 20,000 colleges in engineering, if not more. We don't even talk about the next e200, forget the whole 20,000, because the quality is really questionable. And the same thing is true about schools, including early childhood education. And then the things that we've just not solved yet. Now you map it back to the fact that India has huge aspirations. Because of awareness, media, growing incomes in the last 20-25 years, 30 years of fabulous GDP growth up till now. Started in the 90s and, [00:22:00] the aspirations are really high. And Indian parents see education as the ticket for the future. So EdTech is bound to boom. It's waiting for good experiences. This space for like 1000 Byjus'ss in India. China's already proven that they had similar gaps, similar aspiration gaps, and they've been able to fill it with a massive EdTech ecosystem growth sin India. That's just beginning to happen. If you look at all the EdTech deals in 2019 and m 2020 so far despite COVID I think it's just accelerating and accelerating. We'll probably have a thousand unicorns coming out over the next 10 years. Now some of it might be feeding Americans because there is a gap there are also, some of them might be feeding other emerging economies, but a lot of them will be inward-focused and so on. Coursera operates specifically in the age group of 18 plus 18 to 30, if I can call it. A lot of people were prepared by inadequate education supply chain, or like I said, 90% plus of the education system is struggling for quality, because of under-investment and today because of scale, because you cannot scale human, high-quality human beings for good, but you can through, you know, democratic means on internet, distribute great quality content. Coursera fits in there because these people are hitting the workforce and struggling. I'm a big fan of Upgrade, which was launched by a veteran in my YouTube world and phenomenal progress they've been making and the impact they are making. They're actually saying that can we make the graduate workforce of this country more employable or if you are already employed can we move you up the value chain in terms of the kind of jobs you can afford to do. We've not even scratched the surface yet. India is so hungry at higher Ed; you launch half a good quality product, just half. It's going to go through the roof, and we are waiting for those startups to emerge. It's a great and humongous opportunity a lot of low hanging fruits in the education ecosystem. Very, very easy to monetize that space as well. So very overtly bullish answer to what you said. But yes. Like I said earlier, Can you be vernacular? Can you be local? Can you apply to careers of today and not, what school is teaching you, which nothing has changed for last 30 years. At a school level, there's enough that changes and nothing has the changed. Both are equally true when I say that statement.
Pritish: Thank you very much.
Amit: Thank you so much for inviting me.