For years, U.S.-based tech companies have looked to India’s vast internet user base as a key growth avenue. OpenAI, the creator of ChatGPT, is no exception. Although the company claims that India is one of its fastest-growing markets for the popular AI tool, third-party data suggests that OpenAI may face significant hurdles in converting this growth into revenue.
Data from analytics firm Sensor Tower indicates that, since 2023, Indian users have spent approximately $8 million on ChatGPT subscriptions via in-app purchases. However, this figure pales in comparison to the $330 million spent by U.S. users over the same period. Notably, this number does not include purchases made via the ChatGPT web app, where transactions are also taking place.
Local Pricing Issues Impact Monetization
A key factor in this discrepancy is the lack of localized pricing. OpenAI’s lowest-priced ChatGPT plan in India costs $20 per month, which translates to over ₹1,700. For many in India, this price point is considered steep for a digital subscription, especially when compared to other local digital services that offer a range of affordable options.
OpenAI did not provide specifics regarding its growth in India but pointed to a post on X by COO Brad Lightcap, in which he stated that India is ChatGPT’s fastest-growing market. Despite the current low revenue, India still holds potential for becoming a major revenue driver for OpenAI, particularly as the company works toward CEO Sam Altman’s ambitious goal of creating a platform with billions of users.
In pursuit of this goal, OpenAI seems to be eyeing India’s massive user base as a crucial stepping stone. The company is reportedly in talks with Reliance Jio, one of India’s largest mobile carriers, to enhance ChatGPT’s reach in the region and attract more users. Given the scale of Jio’s customer base, this alliance could significantly boost ChatGPT’s presence in India.
Despite the challenges, ChatGPT is growing organically in India. Data from app tracker Appfigures reveals that more than 20% of ChatGPT Android app downloads this year have come from India. A significant portion of this growth is likely driven by the newly revamped image generator feature, which went viral for its ability to create realistic Ghibli-style art, capturing the attention of Indian users in particular.
What The Author Thinks
OpenAI’s success in India will ultimately hinge on its ability to localize both its pricing strategy and product offerings. While the rapid growth in downloads is promising, the company will need to reconsider its pricing model to make ChatGPT more accessible to Indian consumers. Additionally, partnering with a major mobile carrier like Reliance Jio could provide the necessary push to bridge the gap between high adoption rates and revenue generation.
Featured image credit: Rappler
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