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Got a chance to attend the ‘internet and mobile connect’ in Mumbai — the panel and audience stirred some interesting thoughts and I would like to throw them open to the audience of ileher:

Is the boom in Indian internet space real or just hype?

There was a consensus among the panel that even though internet population in India is rising sharply, the monetization from this traffic has yet to happen to its full potential. So, the boom is growth based but not profitability based.

Why is the reach of main Indian portals - rediff.com, indiatimes.com dropping over last few months? (Reach on Alexa.com)

Alexa’s system of ranking can be debated but given what it does, the reach should not fall.

Will India see new Internet and Mobile services coming from Media houses such as the Times Group / TV18 or standalone players will play a more important role?

The panel’s view was that media houses are in an enviable position to cross sell and up sell their new services to their existing customer base. But at the same time, smaller outfits can be disruptive and a lot faster to hit the market.

Looking at the way some of the successful internet companies such as shaadi.com and naukri.com are setting up offline distribution channels, can we safely say that it is not possible to succeed in Indian internet space by being purely ‘online’?

Will the products and services based on model arbitrage work in India?
Yes and No. To put things in perspective, the panel pointed out that the Match.com model has not quite worked in India. But, matrimonial services such as shaadi.com and Bharatmatrimony are doing well. So, model arbitrage concepts have to be implemented keeping in mind the Indian cultural and demographical nuances.

Overall, a very well conducted session. Kudos to the team at Venture Intelligence for bringing VCs and entrepreneurs together on the same platform.

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According to this study, when the question “Have you heard of Internet?” was thrown at few people from lower socio-economic class Indian society, around 75% of population responded with a NO. I bet this number would be much smaller when the question asked is about phone/mobile rather than Internet. Internet has been around in India before mobile phones hit the market. What could be the reason for such less awareness of Internet?

I think the answer is clear - 70% of India is still rural and agrarian and given their day to day lifestyle, having Internet access would not add any value to it. The next question then is, whether there really exists any real use case scenarios that rural India cares about. Sam Pitroda made the concept of long distance telephony commonplace with the introduction of PCO’s. In retrospect, its easy to see how the concept made sense. PCO’s created employment and enabled people to communicate in a way like never before. Does there exist a similar “gap” today that Internet can fill?  Here are a few notable initiatives that companies are taking:

1. ITC’s eChoupal Initiative: An innovative rural distribution framework that makes use of computers and Internet for procurement of soybeans from rural India. You can read the details in this article over at India Knowledge@Wharton, but it essentially enables the farmers to go to Internet kiosks and check prices and help them make a decision to sell their produce at the local market or directly to ITC. Mukesh Ambani group is planning to setup a similar farm-to-storefront infrastructure to tap into the rural market.

2. Online giant Google also realizes the enormous opportunity in rural India and is planning a number of initiatives to tap into the market by creating customized content including weather updates, crop patterns and other local data.

There are other similar initiatives that different companies are taking. Some of Internet based services (esp. related to weather, crops, jobs, train-tickets, better means of communication, etc.) can be very useful in improving the lives of the rural people. The mode and ease of access is going to be key. Its hard to expect people to have PC’s in the villages. Its hard to expect villagers to understand a complex computer keyboard. Clearly, noticing the ever increasing mobile penetration, providing customized, easy-to-access content on the mobile platform seems like the way to go. But of course, figuring out the business model could be tricky. What do you think? How much can people in rural India really benefit from such services? Does there exist economically viable models (both for villagers as well as the Internet entrepreneurs/companies) that can add value in the life of a common villager?

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Internet penetration growth rate is among the fastest in the world in India. But everyone knows its going to hit a plateau if the main Internet language remains English. Sure enough, there are portals like rediff, yahoo, msn, google and others who have started offering content in Hindi and other languages. But if you go hunting for any real information, it seems like the amount of activity that a person can do on the Internet with Hindi (or any other local language) as a language is rather limited. Limited to reading news.

Think of what a person from a small town/village who does not understand much English can do. Read newspapers? Why would anyone want to log onto Internet and read news? Google recently launched blogger in Hindi. Will the “critical mass” really want to log onto Internet and start blogging? Guruji.com has recently launched a Hindi interface for their search engine that indexes and searches web pages written in Hindi. Let’s consider a case where someone from a small town is visiting Delhi and wants to find out information about Delhi. So he/she logs onto Internet and searches for “New Delhi” in Hindi. What do they get? A few spam sites and few blogs that have the keyword “New Delhi” in their content, but no really helpful information about New Delhi. If a basic scenario like this cannot be fulfilled, I guess it’s time we need more serious players offering vernacular content. How about the situation where a non-English Internet user wants to do a transaction - like buy a rail ticket or a plane ticket or buy something online. Well, tough luck - most current ecommerce sites seem to be happy providing content and transaction in English only interface. How about few other popular sites that are hit in the Indian market like a job search portal or a matrimony site? Same story, most of them are happy catering to English audience only.

Hmm, makes me think - how important is Hindi really for an Internet company in India today? Should they care about non-English users at all? Actually, let’s take a step back - do non-English users care about Internet? Chicken and egg? Where is the tipping point?

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After we did our last post on local search, comments & discussion indicate that people are not convinced, if community driven local search adds any value against the algorithmic ones. Here are some data points that I found very interesting.

 

LeeAnn Prescott says “Based on traffic to Local.com, Yahoo! Local and Live Local Search, it does not appear that interest in local search is increasing, but the substantial growth in Yelp’s traffic indicates that the social networking/local search combo is an effective means of engaging users around local content.”

This is very interesting but I am not sure if we can directly apply this to the Indian market. Nevertheless, I am expecting our local sites to follow suit. This actually prompted me to do a traffic analysis for Indian local search/social networking sites. Here is what Alexa shows:

Alexa traffic patterns might not be very accurate as it is based on their toolbar and I am not sure of the toolbar’s reach in India. But we can use this graph to compare traffic between these companies. MapMyIndia is leading here because there is lot of curiosity around maps. People spend lot of time trying to relate maps with their local knowledge of the city. And this shows why maps are important to create a complete local offering. If you take mapping out, Burrp and ilaaka are neck to neck. tolmolbol has little traffic because they are new. Most interesting is Onyomo that is been there for sometime but not getting much traffic. Anyone knows why?

Please leave your comments/thoughts on what you think of these charts.

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Background
With the increasing Internet penetration, ecommerce is steadily growing in India. In the travel sector, it has reached a tipping point where buying tickets online has become quite commonplace. I believe it hasn’t reached that stage yet in the other sectors, but it is surely inching there. The number of sites selling stuff online is increasing at a good rate too - there are at least 150+ decent sites doing retail over the Internet. Surely, a lot of these have started off with focus on NRI customers, but it is not difficult for them to switch gears and start focusing on the customers in India, when there is demand.

Start of the concept
As the number of sites increase, how do you know where to go and buy stuff. Surely ebay is the current leader, but as other sites start becoming more and more competitive, it becomes a pain to find out the site offering the best deal. In comes the concept of comparison shopping sites. These guys build an index from the product inventories of as many online shopping sites as they can get the data from and provide search on this index. As a result, users can come to the site, search for products and see what each online merchant has to offer and eventually click out and go to the merchant site to do the transaction. The way these guys make money is by charging the online merchant for driving traffic to their site (mostly cost per click). As with the standard CPC concept, this marketing channel is very effective and accountable for the online merchants as they pay only when they actually get the user on their site. With more than 150+ shopping sites out there, you’d think someone would have seen an opportunity and started a comparison shopping engine. You didn’t think wrong. Surely, we are starting to see some traction in this area with the early players being bechna.com and ultop.com. Check them out, these sites do not have a lot of stores in their index, but its a good start. We will definitely see more players entering this field and will try to offer more and more value in terms of better user experience, having more items/stores in the index etc. Obviously, the more items and stores that a player has, the better job it can do by helping users find the best products and best prices.
How to scale?
Now the next question then is - how do these players get the data? Couple of options here: they can get data feeds directly from online merchants or they can scrape/crawl the shopping sites and extract data from there. The first method is an easier technological problem, because of the fact that data feeds that they get are much more structured compared to unstructured HTML from the websites (which ofcourse does not mean that no one takes this approach. Sometimes this is pretty much the only way to go. more on this approach in a later post). But the problem is that as more and more comparison shopping players come up, it is not scalable for the online merchants to provide data feeds to each of these players. Providing data feeds is not the only problem, the online merchants need to track how much traffic a comparison shopping site is generating so that they can pay appropriately and measure their ROI. As the industry matures and comparison shopping becomes popular, we will see “middle-men” in the form of data feed aggregators coming in, who will collect data from the online merchants and supply it to anyone looking to create a comparison shopping site. This is also a very attractive business as each these middle-men get a cut from the revenue that comparison shopping sites generate. Have not seen any player doing the data feed aggregation in India yet. To give examples from the US market, a few examples of comparison shopping sites are shopping.com, shopping.yahoo.com, pricegrabber.com, shopzilla.com etc. A few data feed aggregators are linkshare, commission junction, etc. In europe there is kelkoo, pricerunner to name a few.
Offline
Ofcourse the concept of comparison shopping is not limited to online shopping sites only. There are sites like Rediff Product Search and CompareIndia.com that actually build their index from data feeds from the local retailers, so users can find out who is offering the best deal and go and buy the products from the physical store.
Whats in the future?
I think bechna and ultop have an early foot in the door, but it will be interesting to see how they evolve and which other players come in by the time the concept really hits mainstream. Ofcourse aggregation and distribution of data feeds still looks like an open opportunity today (from my research).

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Amit Agarwal, the author of the the Digital Inspirations blog, is India’s first professional blogger. Recently, we asked him a few questions and the answers, like the man himself, are simple and straightforward. Aspiring professional bloggers (we know that there are a good number of you out there) would do well to keep them in mind. Once you have read the interview below, please leave behind a comment or send us an email to let us know what you think about the professional blogging scene in India, the technology blogs out there and what value these add to your life. Also, if you know of other Indian bloggers who are blogging for a living, please let us know. Now, to the interview itself.
iLeher: In your view, what is professional blogging? How would you describe what you do in terms of it being an economic function?

Amit: When you are not posting pictures of your cat sitting on the couch or not writing about what you had for dinner last night.

iLeher: Many of us consider a profession to be something one does from 9 to 5. Do you blog for some specific time (9 to 5) or do you do it as and when you feel like? How much time do you spend a day blogging/researching?

Amit: My blogging schedule is generally dependent on the site traffic. Since a bulk of my readers are from US and Europe, I like to post new stuff in the evenings here.

I generally work between 10-12 hours a day and more than half of that time goes in researching topics that might interest DI readers.

iLeher: How do you decide on stories and how do you go about identifying what would make a good story?

Amit: I get a lot of queries from readers on technology and related topics. Plus I read hundreds of RSS feeds to track what’s hot and might interest people.

iLeher: Are there many more in India like you?

Amit: There are tons of good technology bloggers in India though I am not sure if they blog full-time.

iLeher: Do you have any advice to those wanting to blog for a profession?

Amit: It’s a very risky business because you are dependent on so many other factors like SE rankings, inbound links, etc. Therefore, try to have a backup plan before making your blog a profession.

iLeher: What are some of the best Indian blogs you like?

Amit: I like reading Ouch My Toe, Swadeshe, Newsmericks, VentureWoods and Mad Momma.

iLeher: How do you characterize the typical readers of yours and other Indian blogs? (young, savvy, etc.)

Amit: The majority is young but there are some very senior people as well who read my blog.

iLeher: What do you do to promote your blog?

Amit: I focus on writing regularly and rest everything follows automatically. But yes, DI web address is printed on my business card.

iLeher: How has the blogging scene evolved over the years in India?

Amit: It’s growing and will continue to grow. No doubts about that and conferences such as BlogCamp and BarCamp will just aid in spreading the awareness.
iLeher: How much money do you make off your blog and what are the various channels ?

Amit: I think my blog generates some decent revenue and most of that is via online advertising. I do some consulting work as well.

iLeher: What is the most important thing for a blogger? (E.g., honesty to the readers, “interestingness”, etc)

Amit: Always disclose your sources of information and give them due credit.

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iTasveer is in news as they recently announced a deal with Microsoft. If you have Vista, you can order photos right from Windows explorer, without needing to visit any website at all. Pretty neat. They also announced Doodlepad, a new feature with which you can custom design your own tshirts/mugs and order them online. Good to see some innovation in this space. Clearly, these features make them stand apart from others in this crowded space. However, digital camera + decent Internet access + Windows Vista is not a combination that is prevalent at least today in India, so it will be a little while before they start reaping real benefits from this. (esp. with all the steps Microsoft is taking to prevent piracy in Vista).

Obviously (its hard to not imagine mobile while speculating the next disruptive innovation in the Indian context), the next question is - will we see someone striking a similar partnership with Airtel, Reliance or some other mobile network? So that people can just click with their high res mobile phone cameras (or click with their standalone camera and transfer to mobile) and order prints from mobile directly. We are starting to see such services coming on mobile. For e.g. recently Reliance announced a deal with Naukri.com, stating that you can search for job listings with Naukri.com login from your Reliance mobile phone. Interestingly, the news also mentions in the end that they are looking for “other such content providers”. I do understand that ordering prints type service is more difficult than information fetch (news, email, search) type of applications because of transaction processing and large data transfers involved, but it will surely happen some time. The question is when?

Thoughts? Am I too much ahead of times to think of it at this point? Maybe our friends from iTasveer, MeraSnap, Picsquare can shed some light here. Are they thinking of any mobile angle at all?

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