Written by Christina Kim and Matt Homer

India has more smartphone users than there are people in the US, second only to China. With hundreds of million people poised to come online in the coming years, most of them will leapfrog straight to a smartphone as their primary means of accessing the internet. Data is also dirt cheap, if not always reliable. And unlike China, India’s digital economy is generally open to foreign tech firms — the FANGs (Facebook, Amazon, Netflix, and Google) of the world are fully present here — making it the world’s most populous open market for companies to compete and the place to watch as those battles determine the future. The size of India’s market means that companies with global ambitions will design digital products with Indian consumers in mind, and the rest of the world will experience those products as well.

We recently spent four months in Bangalore immersing ourselves in India’s bustling app ecosystem to see what we could learn from one of world’s most quickly digitizing markets. Here is what we discovered:

Mobile lite, most likely Android

In the US users have access to reliably fast internet, larger screens, and iOS has an equal market share to Android. Sites take a media rich responsive design approach and iOS apps might take precedence over Android. The opposite is true in India where there are 300 million smartphone users and 97% are on an Android operating system. Brands like Samsung, Sony, and LG are competing with Chinese brands to produce cheap Androids that can be bought for a mere $100. We bought a Xiaomi Redmi 5 for $118 and found it could do about 80 percent of what our brand new iPhones could, but at a fraction of the price. With more and more users coming online almost everything is being designed as mobile first, with some services available only via app, and many more exclusively on Android.

Data is relatively cheap (we paid $18 a month for 3 lines and a combined 75 GB) in India, but for many still a precious commodity, and the quality of service can be quite low (even when your phone says it is connected to a 4G network). If the app is too large it may not be downloaded or it might be deleted to make space for something else. Twitter, Google and Amazon have all developed mobile lite versions of their products that load faster and have smaller data footprints to accommodate for unreliable and slow network speeds. While app size may not be as much of an issue the US, faster load time is something everyone can benefit from, no matter where they live.

Mobile number instead of username or email

Without an Indian phone number it’s nearly impossible to participate in the local app economy. This is because the majority of companies ask for a local mobile number instead of an email address to register for a service. Thereafter your phone number becomes your login address and communications are primarily sent through SMS messages. Reminders for our Big Basket grocery deliveries, haircut appointments, and Fresh Menu meal discounts were all sent through text, not email.

WhatsApp, the world’s most popular mode of communication, provides a global example of your mobile number being your login ID. This is quickly becoming more common because of the ubiquity of smartphones, ease of use for those new to digital, and instant access to your mobile phone data, including contact lists of friends. Going forward we expect to see more and more apps following this method of user onboarding with your mobile number becoming your identity.

OTPs over passwords

One time passwords (OTPs) generated by service providers and sent to you via SMS are used much more than passwords you develop yourself. The use of SMS-provided OTPs has proliferated and is even required to access public wifi networks. This is part of a larger push within India to make two-factor authentication a requirement for nearly every type of service obtained through the digital economy, no matter how mundane or trivial it might be. While this might provide an increased sense of security, the reality is that SMS-based OTPs can be easily intercepted.

With data security becoming an increased priority for everyone, we see the use of two-factor authentication growing everywhere. However, India shows us that SMS-based OTP can add an incredible amount of friction and annoyance to even the simplest of transactions. If your phone is out of battery, out of network range, not immediately near you, or has a foreign SIM, you will find yourself in digital purgatory. As two-factor authentication and OTP become more common, smart companies will develop a menu of options for customers that make use of other form factors (such as biometrics and authenticator apps) that blend more naturally into the user experience they want to have.

Digital UX only as good as local infrastructure

While we could meet most of our daily needs via app (laundry, groceries, food delivery, cabs, etc) where we lived in Bangalore (the situation is much different in rural areas), that didn’t necessarily mean the experience was frictionless. Apps that worked seamlessly for us in the US, like Uber, ran into more difficult terrain in India. When ordering an Uber or Ola (India’s home grown ride-hailing app) you can almost always expect to triple the wait time the app initially displays. If they do arrive to pick you up, it’s almost never at the location you’ve actually requested. And when you order deliveries, the items don’t just show up at your door. You can expect the delivery man to call you at least once, but often two or three times, to ask where you live and how to get there. Many drivers and deliverymen are smartphone neophytes and don’t trust notifications or map directions. India’s poor roads and address systems combined with low levels of digital literacy make the off-line aspect of UX difficult to master.

It should seem obvious, but often isn’t, that what works in one market won’t necessarily work as well in another. Digital UX can’t be divorced for physical UX. And while you might be able to find digitally savvy employees with decent customer service abilities in one market, another might require greater effort.

For locals only

While India receives many visitors and business travellers, no homegrown apps we used were very welcoming to foreigners. First, many local apps are only available on the Indian version of Android and (sometimes) iOS stores. Second, as already mentioned you need an Indian phone number to sign up for local apps. And third, you must have a local financial account to use any apps that involve a payment. Even when an app says it accepts major cards like Visa or Mastercard, they’re only talking about cards issued by Indian banks. If you have a local phone number (which we did), but no local financial account (which we were unable to open as foreigners), you can often avail yourself of an option called Cash on Delivery, or COD. This meant we could make purchases online, but would have to pay in cash with exact change upon delivery. This added a significant amount of friction to our experience since we could not have deliveries made unless we were home and had the precise amount of cash required.

This experience stood in sharp contrast to our experiences in other markets such as Singapore where signing up for Grab literally took less than a minute, did not require a local number, and accepted every card in our wallet. We suspect the size of India’s market has something to do with this. While a much smaller market like Singapore has every reason to make it easy for foreigners to transact, the untapped potential of India’s market is so massive, foreigners simply aren’t a priority. A similar situation is playing out in China.

More relevant services from home-grown apps

While most of the apps we discovered were local versions of products pioneered in the US, rather than anything radically new, they often had features that made them much more relevant to local needs. For example, while the Uber app experience is generally the same in India as in the US and centers around the single use case of getting from point A to point B, their competitor Ola offers a variety of additional features more attuned to the local context. For instance, there are options to rent a car and driver by the hour or for a weekend getaway. We used Ola much more often when we needed a car for the day or for a few hours at a time.

While it’s tempting to believe that digital products and services can be scaled to a broader set of geographies without many changes, doing so can also create opportunities for local competitors to copy the basic service and add features that make it more attractive to a local audience.