Perplexity CEO Aravind Srinivas encourages Indian entrepreneurs to take on Instagram, WhatsApp

Aravind Srinivas, CEO of Perplexity AI, recently voiced his admiration for the potential “bravery” of an Indian company that dares to challenge global tech giants like Instagram or WhatsApp. Speaking on a podcast hosted by Zerodha cofounder and investor Nikhil Kamath, Srinivas addressed the opportunity for Indian entrepreneurs to carve out their space in the digital advertising ecosystem dominated by Meta and Google.

His comments came as a response to Kamath’s query on whether young Indian entrepreneurs could disrupt the digital ad market and capture a slice of the revenue currently hoarded by Silicon Valley’s biggest names. Srinivas acknowledged that his own company, Perplexity AI, is attempting to break into the space, despite being met with scepticism from those who deem competing against Google as “stupidity.”

“If you can build way better targeting than Instagram does, at least for consumers in India that you are trying to target for your business, there’s an opportunity,” he said, emphasising that a solid alternative must offer a compelling reason for users to engage and post content on their platform.

According to recent data from the Registrar of Companies (RoC), Google India’s gross ad revenue for FY23 surged by 12.49% to Rs 28,040 crore year-on-year (YoY). Platforms like Google Search, YouTube, and Chrome have cemented Google’s dominance in India’s digital advertising market.

Meanwhile, companies like AstroTalk are still dedicating massive portions of their ad budgets to Meta and Google platforms, with approximately 50% of their ad spend going to Meta platforms (mainly Instagram and Facebook), 35% to Google and YouTube, and 15% to influencer and celebrity marketing.

As concerns around data protection and security grow, smaller players are struggling to set up robust consent mechanisms, which Srinivas believes plays to the advantage of established giants like Google and Meta. These companies already have a wealth of parent and child data, effectively creating a data moat that new players find difficult to break through.

To tackle this, companies are testing various consent models, including third-party tokenisation and leveraging existing frameworks like DigiLocker or APAAR ID. However, these methods are still far from perfect.

India’s software and network-based service industries are vital to the country’s broader Digital India economic strategy. With the government continuing to invest in the education and intelligence of its population, the appetite for technological innovation remains strong.

As per Statista, Instagram boasts about 229.5 million users in India, while YouTube continues to lead with around 462 million users. These numbers point to a massive potential audience for any emerging player with the right technology and targeting capabilities.