Perplexity taps India’s massive user base via Airtel partnership, boosting downloads by 600% and MAUs by 640% to challenge OpenAI.
Perplexity is discreetly expanding into India to compete in the next phase of AI adoption, while OpenAI has solidified its lead in the U.S.
In the world’s second-largest internet and smartphone market, the search-focused AI startup rapidly acquires millions of users, establishing itself for mass-market scale.
Bharti Airtel, India’s second-largest telecom operator after Reliance Jio, partnered with Perplexity this week to provide all 360 million Airtel subscribers with a complimentary 12-month Perplexity Pro subscription, which is typically priced at $200.
Airtel affirmed to TechCrunch that the agreement is exclusive, which means that no other telco in the country can provide Perplexity’s services, including free access, to its subscribers.
One of Perplexity’s most significant moves to date in a global expansion strategy that includes partnerships with over 25 telcos worldwide, including those recently announced with SoftBank in Japan and SK Telecom in South Korea, is the Airtel partnership. Volume is the determining factor.
The San Francisco-based startup will not be able to access a mass market in other regions due to India’s status as the world’s most populous nation.
The country is already experiencing significant growth in the popularity of Perplexity. According to Sensor Tower data that was exclusively shared with TechCrunch, Perplexity’s downloads in India increased by 600% year over year to 2.8 million in Q2.
OpenAI’s ChatGPT experienced a 587% increase during the same period, resulting in 46.7 million downloads.
The growth trend was also observed in active users: Perplexity’s monthly active users (MAUs) in India increased by 640% year-over-year in Q2, while ChatGPT’s MAUs increased by 350%.
In the most recent quarter, according to Sensor Tower, India was the largest market for Perplexity in terms of MAUs.
Nevertheless, ChatGPT maintained a substantial advantage in absolute numbers, with 19.8 million MAUs compared to 3.7 million for Perplexity.
Perplexity has been utilizing India’s user base to advance in Western markets, where OpenAI has a significant lead in paid subscribers, by leveraging previous partnerships.
Perplexity collaborated with the Indian fintech giant Paytm earlier this year to provide access to its AI-powered search through the Paytm app.
The Paytm app, among the top-three apps on the Indian government’s Unified Payment Interface network, has over 500 million downloads and has processed over 1.2 billion transactions worth over ₹1,34,000 crores (approximately $15.6 billion).
Aravind Srinivas, the CEO of Perplexity, has also implemented direct measures to expand in India.
He announced in January that he intended to employ an Indian executive in the country. However, he suspended the hiring process after receiving an “overwhelming” response.
He also disclosed that he would allocate five hours per week to a team developing artificial intelligence in India, in addition to a $1 million investment.
Additionally, sources have informed TechCrunch that the startup has internally contemplated providing its AI search engine to Indian students to expand its audience.
The relatively few local AI startups, notably in the AI search space, are one reason Perplexity considers India a key growth market.
Simultaneously, India boasts a substantial and engaged user base of tech-savvy individuals, leading Google, Perplexity’s archrival, to introduce AI-powered search features such as AI Mode and AI Overviews in India before other markets.
It is still a challenge to monetize such a substantial user base. Despite both services providing a $20 monthly subscription, Perplexity continues to be significantly behind ChatGPT in revenue on a global scale.
ChatGPT’s in-app purchase revenue worldwide increased 731% year-over-year to $773 million in Q2, while Perplexity experienced a 300% increase, reaching $8 million, according to Sensor Tower for Q2.
In India, consumers are notoriously price-sensitive, which exacerbates the revenue challenge.
Nevertheless, there are encouraging indicators. In the second quarter of the year, ChatGPT experienced an 800% year-over-year increase in in-app purchases, which amounted to $9 million in the country.
Perplexity has not yet generated significant in-app revenue from India; however, the startup can potentially increase its paid subscriber base there.
In the immediate term, Perplexity could expand its subscriber base through agreements like the one with Airtel.
Investors prioritizing geographic diversification and user growth may be attracted to Perplexity through strategic partnerships in markets such as India.
However, to convert that attention into long-term support, the startup must demonstrate its ability to generate revenue from its growing user base.
