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Photo: Sajjad Hussain/AFP/Getty Images

As tensions with China grow deeper, media giants could look to further ties in India, where the mobile economy is booming.

Why it matters: India is one of the fastest-growing internet markets in the world. But few consumers have the disposable income to pay for multiple services, which will make it hard for some companies to conquer the country.

Background: Like many developing countries, India is mostly a mobile-only internet economy.

By the numbers: Unlike the largely saturated North American digital market, India's still has room to grow.

Expand chart
Adapted from eMarketer; Chart: Axios Visuals

Internet adoption is driving unprecedented advertising growth in India, as many consumers are more comfortable with paying for content via data-based ads.

  • India will be the third-biggest contributor to ad spend growth globally between 2018 and 2021, according to a new report from global media agency Zenith.

The media scramble: Western tech and media companies have been expanding their presence in India to take advantage of and cover the growing economy.

  • News companies, like the Wall Street Journal, the New York Times and NPR have expanded staff or products in India over the past few years to cover the growth story.
  • Tech companies like Google and Facebook, that serve as big distributors of information in India, have pushed to expand internet access in the region to increase the internet population. Google launched its "The next billion users" plan to conquer India last year. Facebook's "Free Basics" program was rejected by regulators in 2015.
  • From a social media perspective, Google is now looking to take on Facebook's social media and messaging dominance in India with a new hyper-local social network called Neighbourly, Amazon officially rolled out its social e-commerce site Spark, in India last week.

Major streamers are also looking to conquer the territory. India will remain the fastest-growing video market, per Media Partners Asia.

  • Netflix, which has been in India since 2016, scored big last summer with its massive hit "Sacred Games," its first piece of Indian original content with a mix of Hindi and English. Netflix has said it would consider cheaper pricing tiers to lure more subscriptions in India.
  • Amazon, meanwhile "has no fewer than 30 Indian originals in different stages of production and recently developed a dedicated Hindi-language version of its platform for India," according to the Hollywood Reporter.
  • Spotify, a Swedish company, is expected to launch in India within the next 6 months, per Bloomberg's Lucas Shaw. But it may face challenges: "Streaming services have about 100 million users in India, but a tiny fraction pay for the services."
  • YouTube, as Shaw notes, is the "most popular online music source in the country," in part because it's free. It's grown so big that one of India’s largest record labels is expected to surpass the most-subscribed-to YouTube channel in the world, PewDiePie, which has held the top spot for the past five years.

Between the lines: Compared to China, India is a much more lenient entry-point from a regulatory perspective. Recent trade tensions between China and the U.S. have helped strengthen the trade relationship between China and India. That could be driving India to start erecting new barriers to U.S. companies.

  • "As for protectionist policies, we have taken much relaxed approach than China," says Manish Singh, a tech reporter in New Delhi who contributes to CNBC and VentureBeat. "It was only recently that the Indian government began to think about things like having Silicon Valley companies store specific data such as payment transaction info in locally stored servers," says Singh.

India's slow middle class growth means fewer internet users are willing to pay for subscription services. Language and cultural differences can also be a challenge.

  • Cash payments have been used by Indian internet upstarts to drive transactions, says Agrawal. For example, Flipkart (India's Amazon equivalent) and Ola (India's Uber equivalent) accept cash payments upon delivery or a completed transaction.
  • "Indians don't trust credit cards and generally don't like to pay online. There's a local distrust of digital commerce — for now at least. Western players need to be aware of it," says Agrawal.
  • Language barriers also presented a barrier to digital growth in India, which hosts hundreds of dialects and over 20 official languages. Today, voice technologies and artificial intelligence help bring down those barriers to entry, though there are still difficulties with content production.

Be smart: Western companies already have big stakes in the Indian market. Twenty-first Century Fox-owned TV streaming company Hotstar is by far the biggest over-the-top TV provider in India with roughly 100 million subscribers, followed by Voot, which is jointly-owned by Viacom and Mumbai's TV18.

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The U.S. economy added 210,000 jobs in November, while the unemployment rate plummeted to 4.2% from 4.6%.

Why it matters: Job gains slowed sharply, but the labor market recovery remains on track.

Elon Musk's mega-billion bounty

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The largely successful U.S. effort to hobble China's Huawei has benefitted a host of other tech companies — from smartphone makers such as Apple and Xiaomi to chipmakers like Qualcomm to network vendors including Nokia and Ericsson.

Yes, but: The massive disruption to the industry furthered an industry wide mismatch between supply and demand, exacerbating the global chip shortage.