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Snapchat CEO says India is poor. Is it?

Mad over Marketing
M.O.M. replies to Snapchat CEO

Recently when ex-employee of Snapchat alleged that Snapchat CEO Evan Spiegel had called India and Spain poor, Indian Millennials didn’t take it well. For the entire week, my social media feeds were flooded with mainly three types of posts.
Type-1 were posts from people who were offended (because India is a rich country) and were displaying anger towards the Snapchat CEO and asking everyone to boycott Snapchat.
Type-2 were posts from people who believed that the Snapchat CEO was indeed right and there was nothing to be offended about because after all, most Indians are poor.
Type-3 were posts that said the Snapchat CEO can say anything in his closed room meetings and it shouldn’t matter to anyone. It doesn’t matter what opinion has a certain individual formed of your country.

While Type-3, to me, seems the most accurate, it is the type-1 & 2 posts that draw my attention. Type1 & 2 posts tell us that Indians are divided between “India is rich” and “India is poor”. This compelled me to do a bit of secondary research and guess what I found out? Both type 1 & 2 are correct because India is rich and Indians are poor.

India is rich

  • Indian economy is one of the fastest growing in the world
  • India ranks 3rd in terms of GDP PPP and 6th in terms of nominal GDP 
  • India is the seventh wealthiest nation of the world with individual wealth accounting to $5600 bn 
  • With 101 billionaires, India is ranked 4th in terms of the maximum number of billionaires
  • India’s ISRO is one of the six government space programs with full launch capabilities. It recently created history when it launched 104 satellites in one go
  • India’s ISRO has undertaken glamorous projects like Chandrayan and Mangalyan reaching the moon and the mars
  • India’s total acreage (cultivable land) is about 60% or 1,945,355 square km
  • India’s coal reserves are 4th largest in the world
  • India’s Manganese ore reserve is 7th largest in the world
  • Also, India holds huge reserves of mica, bauxite, chromite, natural gas, limestone, and thorium
  • India exports diamonds worth $20-$22 bn every year
  • India's Sree Padmanabhaswamy Temple holds an estimated $1 trillion worth of gold 

Indians are poor

  • Per capita income of Indians was $1750 in 2015
  • Per capita income of Indians in terms of PPP is $4000. It ranks 168th
  • According to the Indian government, about 22% of Indians are below poverty line i.e. they earn less than $1 a day
  • According to world bank’s international standards, India has about 30% of the population in poverty i.e. earns less than $1.9 a day
  • According to Swachhta status report, 2015 about 52% of rural Indian population defecates in open
  • It is common knowledge that many Indians don’t have access to even primary education or basic medical facilities and some don't even enjoy the basic "food, clothing and shelter"
  • According to the 2011 census, about 1.77 million (0.15% of the population) people in India are homeless

Antillia and slums
The two extremes: Antillia and Slums
But why this contrast? How can India be both rich and poor? Well, the answer is more simple than you’d think. India is home to 1.3 billion people i.e. 1 in every 6 people on Earth is Indian. All 1.3 bn can’t be rich or poor. Like most other countries, with a Gini coefficient of 51, India is a victim of Income inequality. While Mukesh Ambani sleeps in his Antillia, somewhere a homeless Indian is spreading his sheet on a railway platform.

We are proud of our rich cultural heritage. We are proud of the fact that the world’s first university “Takshila” was built in 700BC India. The number zero and algebra and geometry and trigonometry all originated from India and make us proud. We take pride in the Ayurveda and the yoga. We take pride in Hinduism. We build the Taj Mahal and likes. We build the world's most extensive railway network. And soon we will have the bullet train. Silicon Valley is flooded with Indians and we got Indians at the head of Microsoft and Google and the likes. Even Game of thrones can’t match India’s Mahabharata now, can it? But hey, does that make me, an average Indian rich? I just work to make the ends meet while many of my poor brothers do not even have work to make their ends meet. Surely, India is all great and all rich but the majority of Indians are not.

Snapchat CEO is neither wrong nor right when he calls India poor. In fact, India is a rich country of poor people. But when he says he doesn't want to expand in a poor country like India, he most certainly needs to know better. Now, I know he's the CEO. It's his company and can do whatever he likes with it but studying Management (in International business) from one of the premier institutes of the nation has taught me a few things too.

At about 7-8% growth rate, India is the fastest growing nation in the world. The number of poor in India has reduced by 30% in last six years. While you look at the absolute numbers, it's important to also look at the changes in those numbers. While 52% of rural India still defecates in open, it should be known that it's down from 70% two years back. Similar are the numbers for per capita income, the reach of education and medical facilities, literacy rate and so on. The growth percentages in all of these have been massive in the last decade.

While looking at expansions for a technology / social media company, it is of utmost importance to look at how well is the network and internet connectivity. Here too, one must look at the growth more than the absolute number. The number of internet users in India has increased from 42 million in 2007 to 432 million in 2016 i.e. from about 6% in 2007, it has reached about 40% in 2016. Currently, India's internet user base is second in the world. In 2005, it was Desktop + Broadband; only available to the rich. In 2010, it was Laptop + wi-fi; also available to the middle-class. Today, it is smartphone + Jio. More and more people are buying smartphones today and complementing that, Internet connectivity is increasing and costs are decreasing.

A smartphone and an internet connectivity: What more does a social media app need? Once you have that, its all about your marketing skills and if you can get people to use your app. Even if we ignore the growth, if the CEO knew a thing or two about marketing STP, surely he would have found his "rich" in India. After all, it’s home to 1.3 billion people. You get all kinds here.    

Sources: New world wealth report, Forbes, Space Probe, Ministry of Mines, CIA world factbook, Trading Economics

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