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Thirty million plus internet users in India is not a number to snigger at. Check out Linkedin, Facebook, Orkut, Expedia, Amazon, Youtube, Google and you will find that there are hundreds of thousands if not millions of Indians actively engaged with these sites. On the home front, names like Rediff, Naukri, Shaadi, Bharatmatrimony, Baazee, Makemytrip, Yatra, Cleartrip, Indian Railways boast similar usage patterns.

Indians are accessing the internet from home, office, cybercaf�, college, mobile, wherever. Indians are no different from the rest of the world in their online needs � they are looking for entertainment, information, convenient commerce, social communities like their counterparts in Brazil, Poland and China and the US.

So why is there so few online successes in India today when there is such a great need? The popular reason seems to be �lack of broadband�. While broadband can definitely enhance the user experience, lack of broadband is not the reason why millions of Indians today are not widely adopting internet sites within India today.

Multi user environments like office and cybercaf�s do provide ample broadband access today. Many applications also work fine on narrowband access. Many global and domestic companies have done just well with the current internet situation, so why can�t more such companies exist?

The answer is simple. The main reason is that there are not enough compelling applications online today that really solve a customer need. Take for example, bus ticketing online. Intuitively, a great concept. There is a consumer need to book bus tickets online and get them delivered to your doorstep. There is no reason why bus ticketing online cannot take off just like railway bookings did. However, if you go to any of the popular bus ticketing sites today, you will find limited inventory which either kills the consumer experience or limits the audience appeal.

The reasons for this are structural within the bus operator industry � fragmentation, lack of online connectivity, questionable practices (double booking), lack of manpower to manage orders and fulfilment, etc.

So unless the bus ticketing sites decide to solve these issues, consumer adoption may never take off. A pretty looking site with limited inventory doesn�t solve mass need. The day these bus ticketing sites offer breadth of inventory, instant bookings where the seats are guaranteed without a fear of double booking, flexibility of payment options and prompt fulfilment, you will see adoption take off. Online companies, especially in ecommerce sometimes need to solve offline structural issues to succeed.

Another good example of a lack of compelling application is social networking . There are more than a dozen Indian sites seemingly trying to solve a need. Don�t understand what the need is given that Facebook, Orkut, hi5, etc allow Indians to connect, chat, poke, play games, flirt, form community groups, share their moments, etc. I firmly believe that if there is a site in India that meets a compelling social need that is not being addressed by the global sites today, it will take off, no question, broadband or no broadband.

Comments

harsh, September 16, 2008

yeah its so true. i am myself an entrepreneur and started almost 4 sites till now, mostly content based. we are for the first time going for a service model.. hotel reservations in jaipur. lets hope it works out well!!

gautam kumar, September 12, 2008

suvir and others have made a good point on what is constricting internet businesses in India. But nothing new.I have heard the very same data points or grouses as far back as 1998/1999 when IMRB and Frost n Sullivan etc came out with with the first set of reports on internet/ecommerce etc.

The same points are still grouse points a decade later.So really nothing has changed. Except the odd baazee, naukri,infoworld.Railways (IRCTC and Airtravel being the internet 'lifeline' has nothing to do with the internet as such.These sectors have always been there one for over a hundred years and the other over 60 years. Both serve a social need. Internet applied to travel only has worked because the industry structure of these two mass transportation systems changed viz capacity build up greater then peak demand, leading to competitive pressures to maximise yield per seat.Internet (one great cost effective channel)allowed that to happen instantly. All Happy! Co, customer, internet bloke, etc.

So if there was one GREYHOUNF equivalent in India run by Govt or NATIONAL Bus Coor whoever, and they ran a branded service (like the Volvo service between some cities in India, but fragemented still)with a contigous CRIS/Sabre equivalent booking system, then internet could help there.Naukri and baazee being the exceptions.The internet in these cases beame the default booking system - but they are not as mass social need as say mass travel, tax/voter registration etc

So social need by itself is not a money spinner.It is a precondition. industry srtuctures are the key. (Someone should re read Porters first Book Competitive Strategy..there could be tips there on primal conditions for changing industry structure and how to trend spot)

Paresh Murudkar, September 12, 2008

Given that even after a decade, the prices of computers still remain out of reach for most Indians (There are just about 70 million PCs in India, PCs with Internet connection would be even smaller in number!).
In all probability, the adoption of internet in India will be driven through mobiles. For may Indians, the first internet access point will be the mobile handset. We have about 300 million mobile users in India which is about 20 times the active internet users. However, the problem is more than 50% of them have a basic handset which is not GPRS enabled.
The internet companies and the mobile handset manufacturers can together open a huge potential market if they can work out ways of expanding the internet accessing population (INternet portals bundling some internet application with handsets for a fee given to the manufacturer to bring down the cost of internet enabled handsets etc). Also, the introduction of 3G in India will (hopefully) help make mobile internet access easy and fast.

Rammohan, September 10, 2008

"Komli is helping Indian advertisers advertise across a list of online publishers that would otherwise not be accessible to them"

Suvir - Google, YPN, Ads.com, ValueClick, TribalFusion, BlueLithium, CPX interactive has been doing this for ages. And all these networks are in India.

Komli and all other Indian AdNetworks are the Minglebox of the Adnetwork business.

Deepak, September 08, 2008

The views you have presented definitely showcase the need of the hour and catering to the masses on a broader level but at the same time it needs to serve the consumers with the cost and time effective solutions which addresses the core day to day problems.

Akshay, September 08, 2008

I would like to ask . How many Social
networking websites have actually made money??

If so how would they make money in India??

Vipin, September 06, 2008

Suvir's has proposed quite a alternative opportunity in the internet space. DimDim looks to be a great concept usefull to internet users in the business space hugely. Komli has a naive site and still needs to put focus words on their site rather than saying that "we are different"

Krishna Mony, August 29, 2008

There is a lot to learn from the online success of Indian railways. Never club IRCTC with other air travel / matrimonial / bus / pizza portals because it complements a highly organized, reliable, low cost, time tested base service that is the Indian railways. Some other salient points -

- It serves even those who live with under a $ a day. For roughly the cost of a pizza, you can travel upto 300 kilometers with a sleeper comfort and toilet access. Compare this with a rip-off air ticket or even a movie ticket and you know why masses don�t flock! And, And nobody gouges you Rs.50/- for 100 gms. of pop corn just because you happened to be inside a train!

- The only PITA about railways has been the crowded booking counters and long waits and IRCTC clearly addressed this issue. Now with air travel getting costlier, even business travelers take to railways en masse.

- It does not call for buying high cost hardware. Just sneak in and out of a cyber caf� for roughly for a half hour (costs just Rs.10/-) and you are done. This is an essential service unlike a movie that you go only when you find time.

- Bus travel can never be equated to railways. The multitude of operators with indifferent attitude towards consumers can hardly be compared to the efficient railways. Then you get the sleeper comfort and toilet access.

So what are the learnings?

If Internet has to be a success in India, it has to drive mass adoption.

The base service has to be so reliable and efficient.

Power tariff can't be so high if you want consumers to spend more time online. Bring them down or make hardware that guzzle less power.

It will have to be run on low cost hardware that doesn�t suck up battery power either.

Broadband speed will have to improve significantly if you want customers to stick. You can�t expect all users to be patient enough and wait for the download to complete.

Finally broadband should be FREE � remember radio? Broadband service providers will have to make money from marketers that use the pipes. There is absolutely no justification why consumers should pay for broadband that is not much different from air that we breath, so far as online apps are concerned.

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