What Emerging Market Customers Really Want from the Internet: An Indian Perspective

What Emerging Market Customers
Really Want from Internet
- An Indian Perspective

Tathagat Varma,
Sr. Director
Yahoo! India

October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida

Disclaimers

• These are my personal views.
• Internet obsoletes documentation very fast!
• All data obtained from public internet sources.
• All infographics acknowledged with thanks.
• Data currency as of Sep 17, 2012

Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida

Discussion Topics

Powershift in Global Economy

India Internet - Drivers and
Constraints, Adoption trends, Case Studies

What are we learning?


Global Economy

• India &
China
dominated
World GDP
for 90% of
last two
millenniums
• Balance
restoration
is underway!

Projections are wild by any standards!


India – In Numbers
People

• Population: 1.2B, 50% <25y, 65% <35y; 30% Urban; 30m NRI/PIO
• Households: 250+ Million
• Languages: 18 official, 114 languages, 216 mother tongues, 900 dialects
• Literacy: 74%
• Unemployment: 10%; 488m - 2nd largest labor force (ILO)
Economy

• GDP: #4 by PPP ($4.5T); 7.2% (2011); 17% Agriculture, 26% Industry, 57% Services
• Cash-driven economy: 95% retail transactions are cash-based; Credit card market
$20B (2011-12) with 18m Credit Cards (decreasing), 270m Debit Cards (increasing)
• Scale: #1 Milk Producer, #2 Food Producer, #3 Roadways, #4 Railways, #5 Electricity
producer, #9 Waterways, #12 Exporter, #15 Importer,
• Poverty: 25%
Internet

• Mobile: #2; 945m Subscribers; 335m Rural Subscribers; Sub-$100 Smartphones;
• Internet: #3; 137m Internet Users (25% growth in last 12m, expect 300m by 2014);
350m Mobiles on Data Services; 60% Internet access only through mobile devices;
World’s youngest internet population (<35y)
• Ecommerce: $10B online market, 80% is travel related; 10m online shoppers; 2/3rd
of all e-com thru mobile; Cash On Delivery (COD) is a novel payment method

India’s Digital Impediments

Infrastructure Content
• Costly, • Lack of Content
• Low, and in Regional
• Poor Quality Languages
Bandwidth

eCommerce eGovernance
• Hyper • Lack of
competition, seamless end-
• Payment and to-end systems
• Delivery issues


Indian subcultures…a Billion niches…


Internet is SEXY!


…but also brutal!


Growing ‘Indian Internet Class’…


How India uses Internet?
Source: Comscore Media Metrix, Jun 2012

By Reach By
By Activity
(Unique Engagement
(time spent)
Visitors) (time spent)
Google (95%) Facebook Social Networking (25%)
Facebook (83%) Google Entertainment (10%)

Yahoo! (66%) Yahoo! Portals (9%)
Email (8%)
Microsoft (48%) Network18
Search (3%)
Wikimedia (35%) Rediff
Business / Finance (3%)
Times Internet (34%) NIC.in
News / Information (2.2%)
Network18 (30%) Microsoft
Retail (2.2%)
Ask Network (26%) Times Internet IM (2.2%)
Rediff (25%) Wikimedia Games (1.8%)
NIC.in (22%) Ask Network Directories (1.8%)

Mobile


Social Networking

• India is -
• #2 on Facebook, LinkedIn
• #6 on Twitter, Youtube
• Projected #1 on Facebook in
2015
• 9 of Top 10 Twitter accounts
of Bollywood Celebs (the
only other is Cricket)

What they do on Social Networks?

• Top uses include checking
updates, sending messages,
sharing photos, getting in
touch with old friends,
watching videos, and keeping
in touch with family
• Using the apps is #7
• The data doesn’t seem to
suggest any engagement with
brands as a need from the
consumer point of view

Retail

• $10B (‘11); $14B (‘12)
• 150m consumers are
‘ecommerce-ready’
but only 10m are
shopping!
• 57% coming from
non-Tier-1 cities
• 80% spend on travel
• 40% transactions
under-$20, 80%
under-$100

Retail


Travel


Case Studies

• Travel Rail: IRCTC
• Ecommerce: Flipkart
• Social Networking: Facebook


IRCTC

• Indian Railways: largest rail
network in Asia, 10B
passengers in 7,000 trains
annually,
• Everything happens between
8:00-8:15am!
• 17.22m transactions (July
2012)
• About 750,000 users go
dissatisfied every day!
• Payment gateways take about
1.5-2 min, and ~29% fail (July
2012)

Flipkart

• 2011 revenue ~100m –
grew 10x in a year!
• ~30,000 shipments a day
• 11.5m book titles
• 2.6m users
• ‘Pioneered’ Cash on
Delivery (COD) successfully
for online transactions
• 4,500 employees


Facebook

• 30% of new
Facebook
users register
via mobile
phone


What are we learning?

• Indian Internet market is huge, fast-
growing…and close to tipping point
• Fueled by aspirational youth and burgeoning
middle class
• Key success factors include -
• Bollywood, Cricket and Social sells
• Effective solutions for everyday painpoints
• Mobile as key access device, esp. for new-to-net
• Indian languages support and content


References
• In India, Distribution is God – Samir Patil, Aug 17, 2012, http://blogs.hbr.org/cs/2012/08/in_india_distribution_is_god.html
• To Size Up Your Market In India, Look Twice – Samir Patil, Jul
12, 2012, http://blogs.hbr.org/cs/2012/07/to_size_up_your_market_in_india.html
• India’s Exploding Digital Economy – Jeffrey F. Rayport, Mar 8, 2012, http://blogs.hbr.org/cs/2012/03/indias_exploding_digital_econo.html
• Indian E-commerce Industry: Riding on High Tides – Zinnov, Jul 30, 2012, http://www.slideshare.net/zinnov/indian-ecommerce-industry-riding-
on-high-tides
• International Rankings of India, http://en.wikipedia.org/wiki/International_rankings_of_India
• http://www.netindex.com/download/allcountries/
• http://www.internetworldstats.com/top20.htm
• http://articles.timesofindia.indiatimes.com/2012-02-25/computing/31100538_1_users-online-last-year-email-and-instant-messaging
• http://sharepress.org/google-ranked-top-destination-facebook-tops-user-engagement-in-india-comscore-study.html
• http://www.comscore.com/Press_Events/Press_Releases/2012/8/In_India_1_in_4_Online_Minutes_are_Spent_on_Social_Networking_Sites
• http://forbesindia.com/printcontent/27042
• http://articles.economictimes.indiatimes.com/2012-02-23/news/31091228_1_irctc-website-indian-railway-catering-bookings
• http://www.medianama.com/2012/08/223-irctc-reports-17-22m-transactions-for-july-
2012/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+medianama+%28Medianama%3A+Digital+Media+In+India%29
• http://www.indianrailways.gov.in/railwayboard/view_section.jsp?lang=0&id=0,1
• http://www.hindustantimes.com/News-Feed/SectorsInfotech/Bookshops-vs-mouse/Article1-858765.aspx
• http://www.pluggd.in/india-is-the-third-largest-online-video-market-in-asia-after-china-and-japan-297/
• http://www.marketresearchcareers.com/show_news.aspx?newsid=abb1cc93-f144-4b1a-82ff-0c50bc2a4b28
• http://yourstory.in/2011/10/e-commerce-in-india-understanding-its-uniqueness/
• http://sanki.in/2012/07/15/red-bus-pioneer-of-online-bus-ticketing-infographic/
• http://blog.nielsen.com/nielsenwire/global/indians-now-spend-more-time-on-social-media-sites-than-on-personal-email/
• http://www.watblog.com/2012/06/14/why-marketers-need-to-use-social-media-for-customer-service-2/
• http://trak.in/tags/business/2011/08/02/top-10-deal-sites-india-snapdeal/
• http://yourstory.in/2012/04/online-travel-portals-have-revolutionized-the-way-we-plan-a-trip/
• http://www.digitalstrategyconsulting.com/india/2012/05/smartphones_in_india_web_brows.php
• http://www.rexduffdixon.com/2011/05/11/mobile-49-of-indians-only-access-the-web-through-mobile/
• http://trak.in/tags/business/2012/08/27/comprehensive-indian-internet-usage-statistics-report/
• http://www.shodh.biz/what-are-indian-travelers-doing-online/


References
• http://www.capgemini.com/technology-blog/mt-files/statistics.png
• https://lh5.googleusercontent.com/-ONX1WKFdaxs/TxWWMVJWRNI/AAAAAAAAq4w/bRhXoUrNKS8/w497-h373/google100mil.jpg
• http://s.wsj.net/media/internetrevenue_G_20110226161214.jpg
• Facebook India: http://www.the4cast.com/web-n-social/web-facebook/facebook-india-infographics/
• http://blog.nielsen.com/nielsenwire/global/smart-and-social-android-phones-in-india/
• http://techcurry.co/10-of-indians-would-be-on-one-or-other-social-network-by-2014/
• Is 2012 the year for India’s Internet? – Rajini Vaidyanathan, Jan 3, 2012, http://www.bbc.co.uk/news/business-16354076
• http://en.wikipedia.org/wiki/Fact_sheet_on_India
• https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
• http://www.cio.in/article/cash-delivery-charms-e-commerce-market
• http://fusioncreation.com/jaipuring/?p=793
• http://www.googlezeitgeist.com/en/top-lists/in/top-searches
• Rise of India’s Digital Consumer – ComScore, Aug 2012
• http://digitalbursonmarsteller.com/2012/04/india-social-media-coming-into-its-own-and-the-epic-rise-of-mobile-l-burson-marsteller-asia-pacific/
• http://www.mobileyouth.asia/what-does-india-do-in-social-networking-sites/
• http://www.pluggd.in/india-remains-country-with-lowest-average-internet-connection-speed-report-297/
• http://www.pluggd.in/olympics-2012-traffic-data-from-india-297/
• http://www.pluggd.in/e-commerce-trend-in-india-297/
• http://www.pluggd.in/indian-ecommerce-industry-challenges-297/
• http://www.capgemini.com/insights-and-resources/by-publication/digital-shopper-relevancy-full-report/
• http://www.business-standard.com/india/news/indian-e-commerce-players-bullish-/460002/
• http://www.business-standard.com/india/news/google-search-retains-lead97-share/474456/
• http://gs.statcounter.com/#search_engine-IN-monthly-201108-201208-bar
• http://www.dealcurry.com/20120724-MakeMyTrip-Looking-For-Small-Ticket-Buys.htm
• http://trak.in/tags/business/2011/03/17/indian-e-commerce-market-2011-online-travel-bookings-dominate/
• http://yourstory.in/2011/11/e-commerce-in-india-to-ride-the-wave-of-internet-growth/
• http://startupcentral.in/2012/07/infographic-how-india-compares-with-china-on-ecommerce/
• http://letsbytecode.com/general/e-commerce-competition-today/
• http://trak.in/tags/business/2012/05/29/top-5-indian-ecommerce-etailing-boom/
• http://trak.in/tags/business/2012/09/06/indian-e-commerce-growth-trends-infographic/
• http://allfacebook.com/infographic-indias-34-million-facebook-users_b57020


Thanks

Blog: http://managewell.net
Email: Tathagat.Varma@gmail.com
Slides: http://slideshare.net/managewell
Twitter: http://twitter.com/TathagatVarma
My Articles: http://managewell.net/?page_id=2


What Emerging Market Customers Really Want from the Internet: An Indian Perspective

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What Emerging Market Customers Really Want from the Internet: An Indian Perspective