The document discusses the opportunity for domain resellers and hosting companies in India's SMB market. It notes that India has over 47 million SMBs which contribute significantly to the economy. While over 5.6 million SMBs now have PCs, the opportunity for domains and websites is still large, with only around 1.1 million SMBs currently having domains. Several barriers like cost and lack of expertise are still preventing more SMBs from establishing an online presence. However, many SMBs want a website and email address. The Indian domain and hosting market is fragmented and growing rapidly. Global players are increasingly targeting India while local players offer more value-added services and conduct evangelism activities. Hosting companies are well positioned to tap into

1. Opportunity for Domain
Resellers & Hosting
Companies in India
Manish Dalal
Thursday, October 17, 2013

2. India has one of the largest SMB base in the world
Countries With Largest SMB Bases
50+ Mn
~47 Mn
~14 Mn
~8 Mn
India (Rank 2)
China (Rank 1)
~26 Mn
USA (Rank 3)
Brazil (Rank 4)
Russia (Rank 5)
Micro Enterprises
Small Enterprises
Others
23%
Prof.
Services
5%
Education
4%
Healthcare
2%
Medium Enterprises
Retail
41%
Manufacturing
25%
~ 1.3 Mn
~ 16.0 Mn
~ 29.7 Mn
100 - 1,000 Employees
11 - 99 Employees
1 - 10 Employees
Vertical Split
Horizontal Split
(~47 Mn SMBs)
(~47 Mn SMBs)
Source: Zinnov SMB Study
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3. SMBs contribute significantly towards the economy
99%
Of Total Indian
Firms
17%
Of Total Indian
GDP
40%
Of Total Indian
Workforce
SMB
Contribution To
The Indian
Economy
45%
Of Total Mfg.
Output
40%
Of Total Exports
From India
25%
Of Total Domestic IT
Spending
Total PC Penetrated Units
57% (~5.6 Mn) of all addressable
SMB units in India have a PC today
Micro
2.9 Mn
Small
2.4 Mn
Medium
0.3 Mn
Source: Zinnov SMB Study
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4. Opportunity for domains and websites in the SMB
segment is still tremendous
Current Base Of SMBs
With
Domain Names
Websites
~ 1.1 Mn
~ 520 K
Current Addressable
Opportunity1
~4.5
Mn
SMBs with PC
Access
~2.6
Mn
SMBs with PC
Internet
access
~1.4
Mn
SMBs with
e-mail Access
~1.3 Mn
SMBs online
through
aggregators
Note: 1 All figures exclude ~1.1 Mn SMBs with domain names
Source: Zinnov SMB Study
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5. However, a variety of factors are still impeding SMBs
to establish an online presence through a website
1
2
3
4
SMBs Satisfied
with Alternate
Sales Channels
High Cost
• Most of the SMBs are satisfied with aggregator websites
• Satisfied with other sales channels such as telecalling,
SMS/Email marketing and word of mouth
• A large number of SMBs do not budget for web presence;
for those who do, the budget is usually less than INR 5,000
Lack of Internal IT
Staff
• Most of the SMBs are struggling with lack of internal skills to
manage and run a website and manage website content
Lack of Awareness
• SMBs are not aware of the key benefits of having their own
website due to lack of knowledge and being less tech savvy
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6. Still, the majority of SMBs in India want to invest in a
website and a branded email
Future Investment in a Website
• Close to 50% of SMBs in India say that they want to invest in a website
• More than 90% of SMBs in India also say that getting a branded email
on their own domain is important and lends credibility to their business
Source: Verisign Research on benefits and barriers of bringing a small business online
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7. Indian domain and hosting market is fragmented and
provides tremendous opportunity going forward
Current Market
3.5 Mn
Domains
>1,000 active
hosting
companies
>100K active
resellers
Top Registrars
focused on
the Reseller
Model
3 Domains
Market Opportunity By 2016
per 100 Internet
users
16 Mn
Domains
Huge Growth Opportunity
USA and UK have 27
domains/ 100 Internet
users currently
6.4 Mn
Hosting Packages
~USD 500
Mn
Annual Sales
7 Domains
per 100 Internet
users
Source: Zinnov Analysis
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8. A number of trends are emerging in the Indian hosting
and domains market
Increasing Focus Of Global Competitors
Value Added Services
Increasing Evangelizing Activities
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9. Top global hosting companies are now targeting the
India market aggressively
• > 150,000 customers supported
currently
• Customer care facility recently
inaugurated in Hyderabad, India. The
centre operates in local languages to
increase customer satisfaction
• 60% of GoDaddy India SMB
customers are from tier 2 and 3
cities
• Hostgator established its Indian office in Mangalore, Karnataka . Servers are located
across Mumbai, Hyderabad and Mangalore
• Dedicated support provided through partner in India from Mangalore
• Payments accepted in INR and cash payment facility now provided to gain traction
Source: Company Websites, Zinnov Analysis
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10. Increasing competition has led to rapid introduction of
value-added services
Website Building Assistance
• Build your own website models introduced
• Local website developer search platforms created
• SMS to website product launched (e.g. build a website
with 4 SMS’s at Nowfloats)
Mobile Websites
• Verisign offers its product MobileView to registrars for
free. The benefits are in turn passed on to the end
customers
• Startups like Mobstac offer mobile and tablet-optimized
websites and applications
Source: Company Websites
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11. Evangelizing activities are on the rise to stimulate the
ecosystem further
 Educating SMB clusters on online identity benefits through
various roundtables and education seminars across
Gujarat, Bangalore etc.
 Go Daddy partnered with Google in an offline campaign
to promote .com website adoption amongst SMBs in
Delhi, Mumbai and Hyderabad using a bus / canter
 Google’s GIBO (Get India Business Online) program offers
free .in domain name and website for 1 year
DELL
BigRock
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 Dell teamed up with BigRock to bring web products and
services to Dell customers at discounted rates to increase
adoption
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12. Hosting companies are well poised to tap the
opportunity in India
Hosters have an
advantage to tap the
SMB opportunity
Customer
Proximity
What Do the Hosters Need To Do?
Invest In
Marketing
Create Relevant
Offerings
Customer
Needs
Partnerships
Offline
Payments
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Give
Unforgettable
Customer
Service
 Give customers choice
 Display and explain offerings in detail
 Product/Service localization is of great
importance
 Increase value rather than decreasing cost
 Partner with innovative firms to gain customer
access and differentiation
 Partner with established players looking to
evangelize the market to gain mindshare
 Gain customer stickiness and trust
 Customers willing to shell out money for quality
of service
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13. Thank You
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