Business Today

Here's looking at you, India

Why Sheryl Sandberg continues her love affair with this country.
twitter-logo Sunny Sen   Delhi     Print Edition: Aug 17, 2014
Facebook COO Sheryl Sandberg
Sheryl Sandberg, Chief Operating Officer, Facebook. Photo: Vivan Mehra/www.indiatodayimages.com

When Sheryl Sandberg was in the sixth grade, she took part in an oratory contest, standing on a stool to be able to look over the lectern. The other participants were much older, but Sandberg managed to connect sufficiently with the audience to finish second. Later in life, she refined that natural ability through formal and informal training, and through ingenious methods like aerobics - that last one taught her, as she told Time magazine, to smile even when she did not mean it.

All her skills were at display on July 2, when she spoke to a predominantly female audience at the Oberoi in New Delhi. The voice modulation, at times dropping to a whimper, was pitch-perfect, the pauses were eloquent, and the hand gestures, made with bent fingers, struck a chord. She owned the stage like few can. Even off it, she charmed everyone who came up to her, squeezing her shoulder blades with a little shake of the head each time she radiated a smile. She connects.

Her arrival at Facebook, on March 24, 2008, would therefore seem predestined: the world's largest human network got the COO who connected easily with people. Her boss Mark Zuckerberg has gone on record to say there are few like her who combine IQ (intelligence quotient) and EQ (emotional quotient) in a single package.

But to Sandberg, it goes beyond the smiles, hand gestures, and squeezed shoulders. "Why do we let children die of unclean water all over the world? Because we do not know who they are. If we saw their names and saw their faces, we would not let that happen. It is really hard to shoot [anyone] if you know who they are," she says in an interview with Business Today.

Real identity was what drew her to Facebook from Google, where she was vice president of global online sales and operations. "[Facebook] wanted you to put your real name and your real picture.... I think Facebook is by far the world leader in real identity. Everything else is based on usage - it's different. Every connection I make on Facebook is me."

Peace on Facebook is an initiative that stems for this belief. "It shows real time connection with real people in parts of the world that have historically been at odds." India and Pakistan. Israel and Palestine. Turkey and Greece, Serbia and Kosovo. "You watch it and every second two real people have connected in these regions. I really believe that real identity and technology change human condition."

Her rendezvous with India - a country with a lot of people eager to connect with a lot of other people - would also seem predestined. She came here many years before Facebook was born, working on a World Bank leprosy project from 1991 to 1993. There was no Internet, and the Oberoi Hotel in New Delhi, where she stayed then, had one of the few treadmills the country had - rickety, but a treadmill all right.

Quote

Our objective is to connect the world and a large thriving ad business helps us meet that objective.

SHERYL SANDBERG

Chief Operating Officer, Facebook

By the time Facebook set up its India office in 2010, the world had changed. India had 750 million mobile phone users, more than any other country bar China, and 200 million Internet connections. Sandberg had moved far beyond leprosy. And your neighbourhood gym had half a dozen treadmills that showed you your heartbeat and calories burned.

But these data provided as much of a challenge as opportunity. The biggest of which was that India, despite its love for software and computers, had fallen hook, line and sinker for the mobile phone.

It mirrored a global trend. Mark Zuckerberg, Facebook's hoodie-wearing founder, announced a shift to mobile in the middle of 2012. The shift was not easy on Sandberg; she headed operations and it would mean a hit on revenues. But Zuckerberg was sure.

He used to review products by looking at screen shots. Before the shift, engineers showed him desktop shots. Now they had to bring mobile screen shots. There were hardly any mobile product engineers inside Facebook. "We took almost all of our engineers - 600 of them and placed them in training boot camps," says Sandberg. Facebook no longer has a PC engineering team.

The inevitable loss of revenue came soon after. The right hand side panel on Facebook, which flashed advertisements, was not there on mobile. Those ads were a big, established business. Yet they were done away with. Now advertising would be only as newsfeed. To move every client - there were many of them - to the new format was time-consuming and needed persuasion. "We moved aggressively and we really helped them see newsfeed," says Sandberg.

Today, she says, Facebook is the best mobile ad product in the world. In the US, it commands more mobile time than its next seven to eight competitors put together, including LinkedIn, Twitter, Yahoo! and Snapchat. "I think if we had not pivoted to mobile we would have been over."

The change was faster in India, where mobile Internet, already more popular than Internet on PC, was racing further and further ahead. And why only the PC, the average user here spent twice the time on her mobile than on watching television. Facebook activation on mobile burgeoned.

Sandberg thought it fit to build an operations centre here, one of just four around the world. Kirthiga Reddy became Facebook's first India employee. Kevin D'Souza came from Microsoft to grow the user base.

The problem was that a large chunk of the mobile phones in India was feature phones, which is what they call low-end phones that do no more than voice calls, text messages, and some rudimentary internet surfing. They have none of the frills of the so-called smartphones. Facebook acquired Israeli company Snaptrue, which made software that made feature phones more compatible with usage like Facebook.

D'Souza forged partnerships with mobile phone makers to embed Facebook into their handsets. Nokia Asha 205, as much a feature phone as they come, was the first with a Facebook button in December 2012. Soon there would be partnerships with mobile operators to launch free Facebook, which segued into Facebook for Rs 1 by Uninor and Airtel. With Ericsson and chipmaker Qualcomm, work started to optimise data usage. It became possible to open a Facebook account on the basis of just the mobile number, an email account became unnecessary.

In September 2010, when Sandberg opened the India office in Hyderabad, Facebook had recently crossed 8 million active users here. By June 2013, a year after they went mobile, total users had vaulted to 82 million, 75 per cent of those mobile. The user number crossed 100 million in March this year, 84 per cent on mobile. India is now Facebook's second largest market by users, next only to the US and Canada, which have a combined 201 million.

Clearly, Facebook has cracked the mobile conundrum in India. But the money conundrum remains. For all its users, Facebook's India revenue, according to advertisers and industry experts, is somewhere between $120 million and $150 million in 2013/14. It has grown 12 times over the past year, but remains minuscule in comparison to the $3.6 billion dollars it makes in the US (in calendar year 2013).

Not for long, believes Sandberg. "India has 1.2 billion people, with the fastest internet penetration increase in the Asia Pacific? We take a long-term view of things and the investments in the ad market here is very important. In the long run we will more than cover our cost. In the long run I think [India] will be an extremely profitable market."

In India, the digital advertising market is small, just over a billion dollars, and more than half of that is with Google. But digital is growing at three times the speed of the overall ad market. "Digital is no longer a niche medium. It is a lead medium. Conversations [with clients] start with digital these days," says C.V.L. Srinivas, CEO of ad firm GroupM, which recently signed a contract with Facebook.

This is where Sandberg's faith in real people, real identities, and real connections can, apart from furthering the cause of world peace, yield money and profits. After all, to some, real people also mean real customers or real business partners.

This is the era of mass customisation. The oxymoron marketing strategy is not really new. Levi Strauss tried it in the 1990s, without spectacular success, but it is catching on now on the back of burgeoning online technologies. So if you want to order a dress online, you can first send it to your friends on Facebook and redesign the dress according to their suggestions. Many see mass customisation as the future of retail. And Facebook can point to potential customers based on their interest, location, age, and sex. That many of its users are on mobile would mean a closer proximity.

Ratan Jalan, the founder of Medium Healthcare Consulting, a health-care firm which runs The Birthplace, a concept of giving birth to babies in a premium atmosphere, targeted mothers-to-be who were using Facebook on high-end smartphones and who liked designer brands. "We have over 20,000 fans and 60 per cent of our business comes from Facebook ," he says.

Travel site Yatra.com earns $24,000 every month from leads generated from Facebook, apparel and accessory designer Chumbak gets 28 per cent of its online revenue. Online lingerie boutique Zivame has seen 80 per cent repeat customers in the six months since it got associated with Facebook. There are 900,000 Indian small and medium businesses active on Facebook.

The big boys are not far. Facebook is already integral to some of Coca-Cola's campaigns and all of Nokia's. Sandberg met Hindustan Unilever, Procter & Gamble and Tata Group when she was in India. "I spent some time with a few of our largest clients? we are helping all of them grow their businesses and we can do so much more."

While Facebook awaits its gravy train in India, it may have already won the battle for mind space, if this year's Parliament elections are to be taken as evidence. Activist voters and candidates leveraged social media like never before. Prime Minister Narendra Modi, an adroit user, is the second most popular person on Facebook, with 19.5 million followers, next only to American President Barack Obama.

Sandberg met Modi when she came to India. "Being an avid user of social media myself, I talked [with Sandberg] about ways through which a platform such as Facebook can be used for governance and better interaction between the people and governments. I also talked about how Facebook can be used to bring more tourists to India," Modi said on his timeline, next to a picture of him and Sandberg.

That would be music to Sandberg's ears. She did a stint with the US treasury department, under Larry Summers when he was the treasury secretary, and rose to become his chief of staff. Many expect her to return to public life some day, or at least suspect her of harbouring that sentiment somewhere inside. But the bigger music would be the appreciative cheers emerging out of the stock markets.


Sandberg is seen as one of those people who seem to have everything: a good job, a good family, and pots of money. The one blot on her has been Facebook's initial public offering and listing on the exchanges. Coming amid much hype, the IPO, in May 2012, was a damp squib. The stock, priced at $38, kept falling for months. Investors were concerned that the company would not be able to make much money from mobile advertising. Soon after, Zuckerberg got to work with his mobile screen shot reviews.

As this article was being finalised, the Facebook stock was trading at an all-time high of $76, valuing the company at close to $200 billion. Only Apple, Google, Microsoft and IBM were ahead on market capitalisation.

The boost to shares came after Facebook declared a surge in mobile advertising revenue. Somewhere in that number, the hand of mobile-obsessed Indians could be seen. And Sheryl Sandberg could be thinking of the country where her thoughts were once occupied by leprosy, perhaps while working out on a rickety treadmill.


*There was a mistake in the headline, which said - Why Facebook India COO Sheryl Sandberg continues her love affair with India. It has been corrected to - Why Facebook COO Sheryl Sandberg continues her love affair with India.

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