South African media and Internet investment company Naspers has been investing in India since 2006-07 when the Internet ecosystem barely existed. While the initial years were a struggle and largely unsuccessful, the experience of being in the market early has helped the company to not only engage with the local entrepreneur here but also to understand the market potential.

Naspers has invested nearly $5 billion in India over the last five years and is hungry for more. BusinessLine spoke with Bob van Dijk, Chief Executive Officer of Naspers and its Internet assets division Prosus, to know the future roadmap for the company in India and how he sees issues around data privacy, Internet regulations impacting investment decisions.

What is your assessment of how India has fared so far, has it lived up to Nasper’s expectations?

We started investing in India around 2006-07. The attraction of India then was three folds. Our company loves entrepreneurs and we found India to be a school of entrepreneurs. Second was the market size. Third, was the youthful and progressive country. These factors made India irresistible.

The first investments we made were remarkably unsuccessful. This was pre smartphone days. So, the number of people with good Internet connection was extremely low. The reality is that if you want to build a network business you need a certain critical mass. So the first few years was mainly a struggle. Then the smartphone changed everything.

Now, India is the second largest Internet market in the world, almost twice as big as the US. This has happened over the last 5-6 years. The good thing is that we now have experience in the Indian market so now when this revolution of internet usage came along we accelerated our investment. I started looking at India seven years ago and the innovation level has already gone up several notches. India was already a big market but now we have business models here that can change the world.

Naspers has investments in multiple countries. Where does India figure in terms of new investments?

For new investments, India is the number one priority. There is only one country that we single out as a priority and that is India. We are global investors so we don’t usually look at geographies. We look at business models and entrepreneurs. We make one exception and that is India.

Will the next $4-billion investment happen at a quicker pace?

It’s hard to predict the future but we will do most of our new investments in India for years to come.

Globally, Naspers has placed its bets on select segments including classifieds, e-commerce, travel, food delivery, fintech. Is there potential for investments into new segments in India?

Typically, we have invested in areas that we know. This has served us well. We won’t, for example, invest in semi-conductor business, because we don’t understand that space. Having said that we have done newer models in India which we have not tried anywhere else . So I can see us do more of that in India but it is really going to be around the consumer Internet. We are an entrepreneurs first company and we may move into areas away from our core strength in India because we have been meeting exceptional entrepreneurs in India.

What has been your experience with Indian entrepreneurs? Do you see innovative and unique ideas that can be scaled up?

In the last few years, India has become from an engine of successful Internet growth to an engine of innovation. Some of the companies like Meesho are doing things which I haven’t seen elsewhere. First wave of entrepreneurs in India may have adapted ideas to India but not necessarily unique to India. That is starting to change. For example, the way Swiggy has thought about the business model is very different from what we have seen it in other places. What we learnt in India was instrumental in how we build our business in Latin America.

Every country is coming up with their own regulations to deal with data protection and privacy but not everyone is getting it right. Do you think this could be cause of concern?

Data protection is essential. Not all government actions on this front has done very well but the intentions are something I am supportive of. We need smart regulations to protect customers from possible harm. But having said , a lot of machine learning applications, the exciting ones, don’t require much data. You can minimise any privacy issues by doing it right.

We are in a highly politically charged environment where investments from specific countries, like China, are being targeted. How do you see this impacting your investment decisions?

When we invest in India we have always supported local entrepreneurs, We don’t come with our people, we don’t take anything away. We find the right people locally and give them the means to build a successful business. But at the same time, political decisions that restrict the inflow of ideas, is a pity. If investments become politicised it has negative consequences.

The pandemic has accelerated the pace of digital adoption which puts Naspers in a sweet spot. But there is also an economic slowdown globally. Has this changed your approach?

Pandemic has created a lot of pain, economic and personal pain for many people. This part gets forgotten. On the business side, we have always tried to invest in things that will be bigger in the future. The future that we have been investing for has come closer due to the pandemic. So the pandemic has not changed our outlook. We have been investing in the future and that has just got accelerated. There could be more competition as more people start investing in areas like online education which has become so huge due to the pandemic lockdown.

What is the one thing that you think could make it all go wrong for Naspers?

I fear being out innovated. We are sitting on the right side of the equation now but a lot of business models today will be disrupted 10 years from now. If we are lucky it will take 20 years from now and if we are unlucky it will be 3 years from now. That’s why we are determined to stay close to China and India because we see these markets giving birth to most innovations in the years to come.

What can Indian policy makers do to make India a more favourable investment destination?

As investors we care about predictability about policy. We invest for a decade or two so we need to be comfortable about the path that’s predictable. The Indian government has been a real blessing on this front. They have set out a path that is pro investment and pro innovation.

For example, what’s happened in payments in India is quite impressive. But one of the things I will be mindful of is that there is a natural necessity for more regulation in the Internet space. 150 years ago drilling for oil was unregulated. But as oil became important it had to be regulated. The Internet in many ways started like that. But there is a need for more regulations and governments are catching up. Some of the choices being made can be risky. Sometimes politics seep into policy.

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