Augmented Reality faces problems of perception, infrastructure in India, says Blippar country head

Augmented Reality (AR) is at a nascent stage in India, though some brands have begun to realise its potential. Globally, big brands such as PepsiCo, Coca-Cola, Red Bull, McDonalds, Heineken and Audi have leveraged the potential of AR as a mass media platform. Blippar Inc is one of the startups helping these companies use AR to run brand and marketing campaigns.

Founded by Indian-origin Ambarish Mitra in 2011, Blippar is a London-headquartered AR startup and has raised $100 million in funding till date. This includes a $54 million round it raised in March. In an interview with Techcircle, Arnav Ghosh, India managing director at Blippar, talks about the challenges that lie ahead for the adoption of AR in India and Blippar's prospects. Excerpts:

What is the status of Blippar's India operations?

Blippar is evolving in India as a platform and AR is seeing traction from a lot of bigger brands, specifically in the FMCG (fast moving consumer goods) space who are always the front-runners of innovation. Obviously, there is an increased perception of better infrastructure, better bandwidth and increasing penetration of 4G in urban markets which helps brands realise AR's potential. But growth has been a bit slow and the uptake has not been very fast.

What is the current AR scenario in India?

AR is being slowly recognised, as the consumer behaviour platform shifts after social media, mobile and e-commerce. But there are perception problems as to jargon (AR is often confused with VR, or virtual reality) and value addition of AR in a business. There is now an increased uptake in terms of interest from brands to do something innovative and they see AR as a potential investment opportunity.

While some brands have realised AR's potential to bridging the gap between digital and real, and as a tactical platform, it is yet to become a standardised marketing tool. In India, everybody understands technology, but what AR lacks here is probably the brands' readiness to pay for the value of the technology and dearth of ideas to use AR. Also, many platforms here have evolved to a level where there have wowed their clients with great ideas. AR is a mix of gamification, education and entertainment and content dissemination.

What are the potential user cases of AR in India?

With specific to consumer marketing space, it could be a mix of brand campaigns, tactical campaigns and promotions and not boxed into one of these. What we have seen is that if you are driving behaviour on social media and the reason is to connect your audience with smart content, AR is a good tool for that. AR is typically at a point where it falls under innovation to most brands, and for FMCG companies and consumer packaged goods it has become an important tool for driving the last-mile conversation with consumers.

Which are the other sectors where you see a scope for adoption of AR?

Globally, FMCG companies are the earliest adopters of innovation and India is no different. Education is one sector where we can drive a lot of AR because it's an extremely disruptive way of learning. We see a lot of scope in sports when it comes to fan engagement. Likewise, CSR (corporate social responsibility) is going to be a huge opportunity for us.

Is India lagging behind when it comes to adoption of such technologies? What is the biggest challenge you face as a brand?

I don't think India is lagging behind. The challenge is perception. When you go to any client today, they talk in number of downloads. There is definitely a download challenge by virtue of being an app, but as a form factor, the challenge is to make the user retain the app from a utility perspective. Like most high-end apps (such as Facebook and Twitter) that work only on 3G, Blippar is no exception.

There is also a lack of thought leadership in this space and everyone is waiting for the infrastructure to improve. I hope to see an increased adoption of AR in the next three to four months when Reliance Jio's service is commercially rolled out across India. Even otherwise, the 4G infrastructure in India is showing signs of stabilising. At a larger level, AR has to achieve this breakthrough with great ideas and RoI-driven (return on investment) metrics.

So, what is your game plan going forward?

We have figured that branded content will play a limited role and we are moving towards something called a visual discovery e-commerce platform. If you 'blipp' an object with our app, it will not only generate content about it but will also tell you where you can buy that. That is utility value. The engine behind the platform is evolving and will one day show 100% accurate content. You can Google everything that you can't see in front of you. But for what is in front of you, we want Blippar to be the go-to application. The visual is more powerful than words. That is a very powerful consumer behaviour we are trying to plug into the customer.

What is the potential market you are addressing here?

Globally, the market for AR is touted to be almost $100 billion by 2022. The tipping point here is how brands start using it on a large scale. Currently, it has been boxed into risk-free user cases. AR is still not mass media, but will eventually evolve into one. To achieve this, we have to keep hitting brands with great ideation, user cases and data.

India is a cost-conscious market. Will the perception that AR is an expensive tool also change as the market evolves?

It will change. But that is typically the Indian mindset where you don't give too much value to the idea but give a lot to the execution. As more big brands bite into AR, do big campaigns and get results, AR will go the mass media way. As it goes mainstream, the value of AR will also go up.

What is the market potential for AR in India? Have you done any market research?

While we have not done any specific market research, studies conducted by several research agencies point that there is currently no market size in terms of figures and is instead pegged to smartphone users. We consider the number of users who have a smartphone that costs upwards of Rs 5,000, the number of Facebook and Twitter users as our core users. Out of the firms that focus more on digital marketing spend, if 3-4% of the total marketing spend is digital, we expect the AR spend to form 1% of all digital marketing spend.

How does India figure in the scheme of things for Blippar?

India will always be a scale market. As far making revenues from a brand-led conversion, India will always lag behind the likes of its Asian counterparts including Japan and Singapore which are small markets but has a large digital audience.

India as a talent resource market offers a lot of tech talent. Hence, we have set up a tech hub-cum-product development centre in Bangalore. The Indian team comprises 65 in total, of which 25 are techies. We have offices in Bangalore, Mumbai and Delhi.

What are your revenue models?

We have three-four models. One is custom selling, where we go to a brand and create opportunities. Then there is this model where we offer our DIY (do it yourself) platform to businesses like media publishers and they create their own blips. There is an enterprise-led model where we talk to large enterprises exploring opportunities to integrate our product into their platform. We also offer our SDK (software development kit) and a core part of our engine to customers and weave it into their ecosystem. The visual discovery platform will also become a revenue model once it evolves.

Our revenue model is based on consulting, project execution, project management fees and tech fees. We also do annual contracts, but the scale of the contracts here is smaller than it is globally.

Can you mention some successful Indian brand campaigns through Blippar?

We have done some successful campaigns for Tropicana, Mountain Dew, Kellogg's and Tinkle. We have also worked with IPL (Indian Premier League) and did some AR content for the Kings XI Punjab team.

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