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Yes I know, things have been slow at iLeher for some time. As Vivek pointed out earlier, the team members have been busy individually in their own stuff. Anyways,`I wanted to assure our audience that we are not fading away. The Internet activity in Indian space is as buzzing as ever. I was catching up on my reading and came across a couple of interesting thought-provoking posts by industry experts.

Darpan Munjal has this great post on ecommerce in India, where he talks about what are the gaps that need to be filled and what it might take to create a successful business in online commerce. I completely agree with him on all the points, and believe that starting an eCommerce venture is going to be much more challenging in India. It involves proving the audience about the value of online shopping, which of course can only happen if some one can execute on the points that the post talks about - not an easy ask. I have my own personal doubts on whether we have the critical online mass for that in India right now. But that doesn’t mean that now is not the right time to venture into ecommerce. I am sure there exists a model that will fit the Indian market and to get that model right, now is probably the best time to start, falter, learn, evolve and get the early mover advantage. What are your thoughts? When will we see an Amazon in India?

Anurag Gupta ponders on the much talked about web 2.0 brands in India. Whether Indian firms can compete with the global biggies. Do we have the resources, talent, mindset to come up with offerings that can pull users and make money. All I have to say on this is that web2.0 is just fancy term for a combination of some web technologies and business models that leverage the power of community. If there is a compelling online service that solves a problem or adds value (e.g. travel, matri, job sites) or even just lot of fun (e.g. orkut) to customers’ online experience, we can do just as good a job as any global biggie. Now whether a new site can start making money or not is a different question. If you ask me, if its pure advertising based model, I’d not bet my money on it today, but online advertising market is surely evolving. On the other hand, this presents an opportunity to invent new business models to leverage the online traffic maybe by adding subscription based premium services, sending leads to transaction oriented sites such as ticketing, online shopping etc.

On a side note, do you think Reliance Entertainment is worth $3 billion ?!

A new photo printing site called ZoomIn was launched last week. Sunny Balijepalli, the fabled co-founder of Half.com (which was sold to eBay for $350 million in 2000) is the CEO and co-founder of the company. I for one am surprised that people still see an opportunity in the crowded online photo printing space. From their pitch and from the site, I fail to see what is it that will make users switch from one of the existing sites. They claim to have a “Flickr meets Shutterfly” model, which is basically good photo sharing features accompanied by printing service. Sounds good, but then iTasveer and PicSquare already have Flickr/Picasa integration, by which users can logon to their Flickr/Picasa accounts and print photos from there. Another feature ZoomIn boasts of is the US delivery (since they have launched in US and India simultaneously) which again is already possible if the users adopt Flickr + an Indian site. Finally, ZoomIn also plans to introduce mobile upload and ordering features. This feature can certainly prove to be a key differentiator when actually launched, given the fact that mobile usage volume is orders of magnitude more compared to Internet in India. It will be interesting to see which other existing players roll out mobile features to fight off the competition (Its one of the features I am waiting to see for some time now).

My conclusion is that as of right now its hard to see what value the new site is adding in terms of user experience. Of course at this point it becomes the game of who can do a better job of marketing, acquiring new customers at low cost (ZoomIn is talking about leveraging social networks) and extracting higher margins. I personally would not like to play this game, but hey - competition among players and more choices for users is always great!

Invite your thoughts.

Ecommerce has been one of the recurring themes here at iLeher. On this topic we have have covered various stats, strategies, and new ventures. The reason why its so interesting to study this area is its at nascent stages, its upcoming and most importantly its rise will create new avenues for generating revenue for Internet companies across the board - including logistics, advertising, transaction processing, referrals and lead generation. I am personally very excited to watch new companies and businesses coming up in this space and observe how this market shapes up. Web 2.0, community sites are all great (and good to see Indian companies are getting noticed), but ecommerce is what will directly impact lives of general people. An example is how it has changed the rules of the game in travel industry.

Various issues that have been discussed are how our market is different from others in terms of customers, logistics, pricing models and what is it that will get us to the tipping point and more. We discussed these issues with Darpan Munjal, the CTO - eCommerce at Indiatimes.com. He has closely seen this industry as he led the ecommerce division of Sears Holdings (A $55 billion retailer in the US). He has shared some excellent view points on the topic of ecommerce with us. Some of the important points that he touches on in the conversation are:

• the current underlying infrastructure supporting the ecommerce eco-system in India
• the value additions that online shopping sites can provide to customers
• pricing models
• muti-channel retail strategies
• supporting businesses to online retailing

Read on below for his insights on all these topics. Love to hear your views/questions.
Read the rest of this entry »

Aloke Bajpai is a founder of iXigo, an Indian travel search engine that currently serves domestic airline bookings.

The online travel business is a fast growing market segment due to increased travel in India as well as growing number of travel service providers like airlines and hotels. This market segment is also competitive with multiple players including travel agencies like Yatra, MakeMytrip and travel search portals like iXigo, Zoomtra.

In this interview Aloke talks about the market, iXigo’s value proposition and competitive positioning, revenue model as well as general tips on how to bootstrap and build a successful company.

(Click here to see a list of Consumer Internet companies in India like iXigo)

Transcript of interview with Ixigo.

What is iXigo –
iXiGO is a travel search engine for Indian consumers. It currently focuses on airline ticket search.

Any plans to extend your search beyond airlines?
We are currently evaluating other search opportunities such as hotel reservations, tours/activities, railway booking etc but have no immediate release announcements to make.

When was iXigo founded and who are the founders?
iXigo was founded in early 2006. The founders are Aloke Bajpai, Jens Schutter, Rajnish Kumar and Dharmendra Yashovardhan. The idea was conceived while Aloke was at INSEAD business school. Aloke, Rajnish and Jens are from Amadeus, the world’s largest travel technology company, while Dharmendra is Aloke’s classmate from INSEAD. The entire iXigo team possesses knowledge in what we believe are the three pillars of building a successful company in this space – Business, Technology and domain (Travel) expertise.

Where is iXigo located?
Gurgaon, India

How is the company funded?
Bootstrapped. Before building iXigo, the founders also provided product strategy consulting to another innovative European travel company and the proceeds from this engagement helped fund iXigo’s ongoing operations.

How do you compare yourselves against other travel portals like Cleartrip, Yatra, MakeMyTrip?
These companies are travel agencies that sell tickets on their own platform. We are a travel search portal that searches for the best deals on the web, and then takes you to the airline you select to buy a ticket for. In fact we complement these companies, since we can even search the travel agencies along with the airlines directly for the best price. This will be even more useful for products like hotels and packages, where product differentiation and price differentiation occurs.

Prices for the same air-ticket at the same time on different travel agencies like Yatra, MakeMyTrip will never be the same as they charge additional booking fees based on their relationship with the carrier. We don’t charge additional fees. We simply aggregate ALL available flights and redirect you to the airlines web site for the ticket you wish to purchase. Our unbiased and comprehensive service will almost always provide the lowest price.

Many Indian consumers feel more comfortable entering their credit card on the well known airline’s Web site than a travel agency’s site. We plan to attract those customers to our platform since it eases the search on multiple airline websites.

We also believe that our user experience and superior search algorithms are our points of differentiation. Finally we fall in the search quadrant and not transaction quadrant, and so our product roadmap is likely to be significantly different than those of travel agencies. Stay tuned!

OK, so how do you make money?
We have relationships with the airlines by which they pay us for a transaction. Over time we’d like to move to a pure referral model, where we are paid for each referral to the airline’s Web Site. In addition, we will introduce targeted advertising on our platform.

How do you plan to get users to iXigo?
At this point we are relying on word of mouth and making sure we get repeat usage thanks to a great first-time experience. Today 30% of our visitors come to our site again within a month. Also, we already launched two features that came as feedback from users of our product. We plan to continue doing that in the short term, get feedback from our customers and perhaps in the future, launch more mainstream marketing efforts.

Closing thoughts?
Over 55% of people that buy airline tickets online in India, still buy direct from the airlines. Both the travel agency sites and travel search sites like ours provide means for customer to find their right flight, however, we provide a more direct search and comparison for those 55% who still prefer to book directly. This fact, along with the continuing overall surge of air travel in India, makes it a large market potential and a very exciting space to be in!

comScore recently came out with a report on the Indian Internet industry. Here are some of my observations and thoughts:

Search engines - One of the popular category of sites. This category pretty much reflects the global trends in terms of the popularity of search engines. (Google, Yahoo, Microsoft, Ask). The interesting thing to note here is that there is no Indian company in the list. Given the variety of different cultures and languages in India, one might think local players might have an edge if they really tried. Currently though, most of the Internet population is English, but this is certainly going to change as the penetration increases. If Chinese search engine Baidu is anything to go by, there is certainly room for a local player in India too. And hey, its not like no one is trying. But frankly, other than Guruji, no one seems to be anywhere close to the standards of the big global players. We have talked about Guruji here and here, let’s see how they progress in the coming years.

Portal/Services - A popular category from the Web 1.0 era. The sites in this category either have day-to-day utility or entertainment value. Lot of early local players here from the 90’s, yet only a few established ones. Google, Yahoo, MSN are again the big players, although the good news here is that there are at least a handful local players in the sector.
news/entertainment/communication - rediff, timesnetwork and sify - decent content but poor user experience (broken links, popup ads, flashy ads)
classifieds - This is one category which has achieved the best success rate as far as the local players are concerned. One of the reasons is the demographics that is online in India and the fact that these players jumped on to the opportunity quite early in the game and more importantly stuck it out at the time of dotcome burst. Naukri, Shaadi, Bharatmatrimony, etc. are a few examples. A few promising sites in this space - mapmyindia (maps and directions), onyomo (local yellow page listings)

Social networking / web2.0 - A rapidly growing category. Very few decent Indian sites. Mostly dominated by the likes of Orkut, Facebook, Youtube etc. Again this is a category where one would think a local player can gain an edge as they would presumably understand the sensibilities of the youth better. Like I mentioned above, once English ceases to remain the predominant language on the web, more possibilities will open up. A few promising startups in this space - Minglebox, burrp.

Ecommerce - My personal favorite but not a popular category in India yet. We really need to catch up here if Internet has to sustain. The reason is simple - the most popular business model on the Internet is advertisments and for ads you need companies who are ready to advertise in the first place. Yes offline companies do want to advertise online, but there is only so much they will do. Real spending will come only from ecommerce players as they can directly affect the sales/branding using this form of advertising. We are seeing growth in this category. Check out some good articles on this space at Darpan Munjal’s blog. Travel is definitely a hot sector which already has a bunch of players (makemytrip, yatra, travelguru, cleartrip etc.) followed by entertainment (seventymm). The next big sector is retail which is currently dominated by Ebay India, but definitely expect to see some action here. IndiaPlaza.in and Futurebazaar are upcoming players. Remains to be seen who will emerge out as the Amazon of India (how about Amazon India itself?)

While on this topic, you might want to check out an interesting discussion here about why Indian companies are lagging behind global players (as opposed to Chinese, Korean, European markets). You can read the complete article for details, but the summary is that dominance of English language and poor user experience of Indian sites are the two main reasons.

Conclusion
India Internet has come a long way just in the last 3-4 years, but I think we are still in early stages. It might still take some time to reach the maturity level of more developed markets. To me, it looks more like the pre-bubble period (’97-98) of the US market. A lot of investment is happening, user base is increasing, new companies are coming up - things seem to be moving in the right direction. What are your thoughts?

Update: My bad - I missed this somehow, but I’ve just been informed that iTasveer also provides integration with Flickr. This is great stuff, expect to see more from these two companies!
In a business like online photo printing there is only so much you can do to acquire customers. Not much scope for any substantial innovation here. Its been tried and tested before in other markets. It pretty much boils down to price when there are so many sites trying to fight it out. As a result, what companies try to innovate on is the process and logistics to keep the prices as low as possible and still extract good margins. Of course there is no substitute to decent user experience and customer service (which most sites claim to differentiate on and indeed seem to be doing a good job on), so we will count that even for all sites.

So just when we thought online photo printing business has reached that price wars stage in India, along comes this handy feature by PicSquare - integration with Flickr. You can now print your Flickr photos via PicSquare. So while Flickr already provides and will hopefully continue to innovate on and provide awesome sharing features, PicSquare can concentrate on their core business - printing and delivery. I personally will even pay a buck or two extra if I don’t have to upload pictures separately just for printing. I love this feature. In fact now I wonder why anyone didn’t attempt this before. While on this topic, I must also mention that iTasveer launched a similar feature sometime back by providing integration with Windows Vista. While Windows vista might take some time to find its roots in India, it will be interesting to find out what gets more NRI customers - integration with Flickr or with Vista. (it’s a different story that I have no way of getting this number)

With upwards of 2 MP cameras gaining popularity and speed of data transfers increasing, I am still waiting for the day when someone announces integration with one of the mobile carriers!

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).

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?