Archive for November, 2009

Indian online startups

November 18, 2009 7 comments

Well, these are just my views; feel free to contradict them, i would love to have better insights by anyone 🙂

We did see the .com boom which appeared in the US and 10 years down the line, we have the most amazing services namely – Google, facebook, twitter at our disposal. Millions of users all around but what is the market like? Are there people on the internet who will buy your product? Things are incessantly changing in this sphere and for sure this is currently the biggest market and home for all kinds of sectors for e-commerce, marketing, sales, etc.

What about the Indian online scene? I will walk you through 3 important points to convey my entire learning and conclusions.

Low penetration, high volume – Visit this link which shows the World bank data, indicating 7.2% penetration (as of 2007) but that is like 81 million internet users! Surely, it is no small number. Infact, we are third largest after China(country that matches our population has 338 million internet users, which is four times) and Japan(just greater than ours) Source in Asia and 4th largest in the world with the greatest potential. More importantly, we will never see a “penetration boom” (a spike) in India, but surely a greater than steady rise, mainly because 70% people dwell in the rural areas where development is slower. Read this for more statistics and numbers within India.

Indian mentality – I have come across many Indian online startups in various fields. Seriously, earning-through-ads is not a revenue model(it is an art and not many can master it and definitely not something you can bank your startup money inflow on) which many wrongly think will power their multi-million-super-cool-to-be-companies. The biggest problem Indian online startups (IOS) face is the difficulty in monetising their ideas. It has been almost a decade since e-commerce has begun but it is close to zero in India. Indian mentality is to “go and shop” as shopping is not the means to survive and live life but a family outing. People are just not comfortable with buying things on the internet, there are trust issues. Hence, the Indian internet has shifted much towards providing services and no wonder why we have the IT biggies and almost thousands of them on every street in Bangalore.

Nevertheless, this is the time – New people are using internet, old people are dying!(apologies for being rude there) From the world bank graph an increasing upward trend in penetration can be easily seen. The new generation is all aware of “online” technologies. Kids of grade 6 know how to complete assignments using google, which during our time was a black demon box – no teacher knew it, no student talked about it. When our generation(people currently in the age group of 20-25) sprouts out into the corporate world, we will be the ones pioneering the online product(not only food  but eveything) shopping concept. I myself would like to buy things online as I know its importance. So, agreed this is the time when you cannot possibly earn much out of an IOS but in 2-3 years the penetration will soar upto 15% and within 5 years to about 30-35% which should be the motivation of setting up an IOS right away(believe me, most IOS take about 1 year to launch, unless it is twitter you are launching :P) It has now become a game of patience. But 10 years down the line, you would be earning much more than the companies similar to you but on the other side of the globe.

// the end.

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