Posts filed under 'Yahoo'

CMO is the new CIO

Recently I am hearing a lot about the fact that the IT budgets are increasing coming from the CMO department. Indeed “CMO is the new CIO”. Why this trend ? Reasons are manifold :

a) Customer touchpoint is the new focus : Customer touchpoint is where the action is now. Whether it is Customer Engagement, Customer Service, Customer Access or anything to do with orchestrating these, these are the hot topics now for enterprises large and small. This essentially means mobile devices, mobile apps, social, local, cloud, analytics etc. To be more specific, the big themes now are Mobile, Social, Cloud and Analytics – all that relate to customer facing technology or orchestrating the customer experience.

Who owns the customer experience – it is the Marketing office and not really the CIO office.

b) Image and Branding : In this world awash with media and content, image is everything. Social and Digital Media are increasingly commanding higher order of CXO focus and budgets. It is now possible for unknown brands and firms to accelerate their visibility overnight via a variety of Social and Digital channels. Traditional firms often find themselves late to this party or reacting to their customers who are already present enmasse on these Digital Channels. Simple 140 character tweets can embarass monstrous corporations in matter of seconds. Image and Branding on new media has become a herculean challenge for large firms and leveled the playing field for consumers, smaller firms and startups.

Who controls a firm’s image and branding, CMO again. So CMO will drive investments in Social and Digital technology which is increasingly important to firms’s reputation and respect in the marketplace.

c) Backend infra is mature : Increasingly, one finds that backend infrastructure in traditional IT departments is mature – the big bang Oracle, SAP and middleware projects are stable and it is increasingly hard to find those big ticket IT projects now. Most of the transformational IT is now happening at customer edge and not in backend tech or networks. Of course, there are exceptions, like 4G and LTE investments by wireless industry and Big Data projects to slice and dice the voluminous data banks that now exist.

However, save for a few big items on backend, backend tech is now mature and even Oracles and SAPs of the world are now developing products for the front-end, where the growth multiples seem better going forward. The customer front-end, of course, is owned by the CMO and not the CIO.

d) Emergence of new tech : Web 2.0 is now being replaced by Web 3.0 – a world of seamless mobility, applications, and front-end use cases. Mobile Payments, Mobile Media, Mobile Devices, SME Cloud Apps, Social Networks, Location Services, hyperlocal marketing are the big glamour areas of tech now where most developers and firms want to focus their energy now. Apple may have started the trend of massive consumer revolution when it created the iPhone, Amazon has brought Web services to SMEs on a massive scale, Google is innovating in search and platforms, Facebook has amassed the largest number of eyeballs around the world. These kind of firms are at the forefront of consumer revolution in tech devices and applications.

Again, tackling this world is in the primary perview of the CMO with it’s mobile strategy, social and digital technology, connected consumer and advertising.

e) Consumerization of IT or COIT : COIT is a popular term now – where consumers walk in into the workplace with their consumer devices and force the CIO to adopt to their devices and apps rather than the other way round. The concept of a Social Enterprise is being adopted by all large firms to drive employee engagement, mindshare and collaboration. Gen Y employees are forcing their employers to change their ways and business practices to make these corporations employee oriented. Talent crunch is forcing firms to adapt to the employees wishes rather than the other way round. Hyper-informed customers are, in turn, pressurizing companies to provide relevant product information and fantastic customer service.

Certainly, CMO is the consumer and people expert and not the CIO. Most of the COIT trends require CMO to play a key role in the tech strategy.

To be sure, the CIO is not going anywhere and remains the bulwark of operational infrastructure and execution framework within the firms. The tech jazz (and related budgets), however, are now owned by the CMO due the macro trends outlined above. Indeed, CMO is the new CIO in the tech world.

September 24th, 2012

Apple iPhone 5 is here : CellStrat opinion

As if you have not heard enough about iPhone 5 already, here is more of it :)

Apple announced iPhone 5 on Sept 12th. The other big thing that happened that day was Quantitative Easing version 3 announcement by US Federal Reserve – one wonders, it was a synchronized announcement – just kidding.. Certainly, some market analysts have said that iPhone 5 may do more for US GDP growth than Fed’s QE3..amazing..

Well, intentional or not, both the announcements have a dramatic impacts – QE3 will accelerate the stock market rise around the world, fuel more inflation etc. Apple announcement will lead to Apple maintaining it’s hegemony in the smartphone ecosystem. I know, I know, some of you are on side of the table which is less than enamoured by the new iPhone 5. However, our take is that the ecosystem of Apple is much too strong and still underestimated by most. The vertical integration of iTunes, Macs, iPhones, iPads, licensed content in there, seamless charging via iTunes, cross-device synch capabilities are so intense and so transformational in the tech world, that few can match up with Apple prowess over the marketplace. Apple ran out of online inventory of iPhone 5 in one hour of opening the sales..validation enough of a huge pent-up demand out there.

Lack of NFC or some other popular features, now commonplace in other smartphones, will not deter iPhone 5 in creating breakthrough success once again for Apple sales. What most people fail to realize about Apple is that it does not usually toe the line created by others – it creates new models which, in many cases, become the benchmark over time. Coming back to NFC, Apple did bundle a feature called Passbook in the new iPhone 5 – a loyalty and coupon management feature – this is not payment enabled but it could evolve into a Digital Wallet. Many leaders like eBay, Square, Paypal are making do without NFC in Mobile Payments and quite successfully at that. It is likely that NFC may never become the mainstream mobile payment tech if Apple and others listed here do not push it.

As to what Apple iPhone 5 does pack, it has a laundry list of neat features :

LTE (4G capable), Thinner, Lighter, bigger screen (4 inch diagonally), all new Apple-designed A6 chip, better retina display, improved camera (although megapixels remain at 8 megs), enhanced HD video recording, 5 rows of icons on the screen, improved Siri assistant, new lightning connector, new Apple mapping app, better iCloud integration, 700,000 apps, new iOS 6 OS, Passbook loyalty feature, the list goes on and on.

To view all iPhone 5 features, click here.

As far as we can visualize, we still feel demand for iPhone 5 will be back-logged and people will go gaga over this device the world over. Apple mobile leadership is far from being threatened, not until they make major blunders or others truly can provide a neat vertically integrated ecosystem. So far, we see only Amazon as being anywhere close to providing the vertical ecosystem with Kindle platform. Samsung tried but it is missing many major components for creating a complete ecosystem, music partnerships to begin with, among other things. Google does not try as their focus is entirely different – to monetize via search engines on Android devices.

So – for now, it is Apple’s world to rule in the mobile arena, until somebody else “does an Apple” on them.

September 17th, 2012

Indian e-commerce market valuations take a dip

(with some ideas from The Wall Street Journal article dated 11 Sept, 2012)

The Wall Street Journal has an article today on how the Indian ecommerce is loosing it’s allure. Flipkart, Myntra and Snapdeal were once being hailed as the next-big-things in the India tech scene but that image is now loosing some shine. It has to do with a variety of factors, the predominant one being the Web bubble burst Phase 2 in the West. As we know, the valuations of Facebook, Zynga and Groupon have been halved or even lower on the western bourses. Indian ecommerce firms, which are considered equivalent in India, are also seeing a declining shareholder and venture capital interest due to this. The valuation of ecommerce firms in India has been chopped into half (roughly) for now.

The Indian economic slowdown and the realization that such models face issues in monetization, has led to further decline in venture capital land grab of Indian ecommerce outfits, a trend widely prevalent last year; it was just last year when the India ecommerce firms like Flipkart and Snapdeal were flying high on the valuation scales. In 2011, VC investing in Indian ecommerce firms rose to $344.4 million from $49.2 million in the prior year.

But, despite the recent downturn, Indian ecommerce market holds stupendous promise. According to Zinnov Management Consultants, India’s e-commerce industry is expected to accelerate from $10 billion in 2011 to $260 billion by 2025, a whopping 26 times growth factor. Only 10% of India’s 1.2 billion people are online so far, as per comScore, which tracks online usage patterns.

Some consolidation is now happening where the big firms are gobbling up some others. Eg Flipkart bought out rival electronics online retailer letsbuy.com while fashionandyou.com bought online rival urbantouch.com in August.

To read the Wall Street Journal article, click here.

What should the Indian ecommerce entrepreneurs do going forward :

a) Market is too big over the long term for entrepreneurs to ignore

b) Entrepreneurs need a viable business model which can sustain over a long period. These startups need to develop brand recognition and sustained marketing over a long term to survive and thrive.

c) Customer service and customer experience is key to customer acquisition and retention.

d) There are a variety of niches which can be targeted eg location-based services, home and lifestyle, kids and women, healthcare services, infrastructure-oriented ventures, education and many others.

e) Offline retail partnerships and arrangements are key to drive down costs and warehousing challenges.

f) A gradual drive for product innovation and clean websites can help entrepreneurs differentiate their offering from the hodge-podge of ecommerce outfits emerging everyday.

g) Mobile, Social and Local convergence (or MoSoLo) can drive a lot of the innovation in ecommerce business model and delivery.

h) Mobile and Tablets are perhaps the most suitable channels for market reach and scalability. PC / laptop penetration may remain low and grow slowly.

i) Tier 2 towns and unexplored markets like rural may offer interesting possibilities for online entrepreneurs.

September 11th, 2012

Notes from TIE Bangalore Seminar on Mobile App Monetisation

(from our Bangalore desk)

This week I attended a seminar organized by TIE Bangalore on the topic of Mobile App Monetization. This is a vexing problem which has bedeviled most Mobile Apps developers around the world. Problems of app discovery, app marketing, too many apps, app development fatigue are well known.

This was an interesting panel discussion sponsored by Qualcomm Ventures. The speaker lineup was top-notch and included the following speakers :

  • Karthee Madasamy, Sr. Director, India and Israel, Qualcomm Ventures
  • Manik Arora, Founder & Managing Director, IDG Ventures India
  • B. Vamshi Reddy, Co-Founder & CEO, Apalya Technologies
  • Rahul Chowdhri, Director, Helion Venture Capital
  • Suresh Narasimha, Founder & CEO, TELiBrahma Convergent Communications
  • V. V. Ravindra, Managing Director, Idea Brahma

The discussion was riveting and inspiring with this star speaker lineup. Below are the key points of discussion from this seminar :

Karthee’s keynote :

  • Globally, there exist 6 billion wireless connections now out of which 1.6 billion are 3G connections. This number is expected to swell to 3.1 billion 3G connections by 2015. Also, by 2015, emerging markets will contribute 50% of smartphone market share.
  • A smartphone is now a full blown computing device. A smartphone now embeds more and more electronic functions like camera, GPS, watch etc. Tight silicon integration is driving this trend. Mobile processors now offering full windows experience Eg Windows 8 may run on the same processor has as the Windows 8 phone.
  • As to India, in 2012, 200 million phones are expected to be sold in India. By 2015, 300 million phones will be sold in India. Smartphone sales will multiply by 4 times in India by 2015, compared to now. At the same time, the costs of high-end smartphones keep falling.
  • Another great trend is that of the rise of mobile broadband users in India. Today, there are 52 million active users in India. 42% Facebook users in India are mobile users. India has 37 million 3G HSPA users today.
  • India is very interesting in that, here, a phone is the first computer for a user, it is often the first camera as well as it is the first gaming device a person might have.
  • India has a huge amount of mobile opportunity. In fact, for India, mobile may be the only primary computing device which a huge amount of users might have.
  • 3G tariffs have dropped drastically in India. India is one of the cheapest 3G markets now, anywhere.
  • There was a time when there were hardly any Indian-brand devices. Now India has seen several homegrown device brands – who have increased market share using innovative strategies like dual SIM or Tier 2 market penetration. Indian brands like Micromax and Lava now own 20-30% of the market in India.
  • There are too many apps now and app fatigue exists, however good apps can still see a bright future.

Karthee also mentioned about the Qualcomm program to find successful startup models – this program is called the QPrize and it has total 1 million USD available in prize finding. One of the previous QPrize winner has been Capillary Tech.

Question : Is mobile apps just extension of VAS ?

Vamshi – Apps are to engage and entertain customers as far as Service Provider is concerned. Monetization of Apps, however, does have a VAS feel in India.

Suresh – TeliBrahma had decided early on not to work with operators and focus on domestic markets, however it is now trying to work with operators and is also marketing abroad. Advertising is a tough market. Need a billion impressions to make 1 million dollars.

Rahul – Their firm is concious that VAS market is challenging. As to working with carriers, it is a country specific issue and mostly an Indian problem. Mobile payments is a tough business to crack (but one of Helion investments ngpay has succeeded after some efforts). App monetization is generally difficult, somehow apps have to go local to add value. B2B2C seems to be a monetization model so far.

Question : How to make money on apps ?

Ravindra – To make money, need persistence. Positioning is important. For mHealth, doctors have to be targeted. App Store is not a good model – need to go through B2B channel eg via clinics or other healthcare firms. Selling via B2B2C seems only viable option in India to make money so far.

Vamshi – Apalya is selling via operators and direct to consumers also now. Collecting money today is via operators – that is one of rare ways to collect money. Apart from that, app monetization is very hard. Sheer persistence is key to get to inflection point in environment. Collection agent today is service provider. Another model – Vodafone is trying to act as change agent and willing to take only 30% app revenue share
similar to the app stores. Discovery thru app stores etc is hard.

Manik – with app stores, mobile social networking or mobile travel firms are hot again. Mobile is anytime anywhere location-based experience. Internet penetration is low but mobile penetrations is high. Especially, targeting tier two cities and local language support can help.

Social networks in India and search are in India are not promising as global guys do this. Mobile Commerce or m-Commerce requires local people, and hence is promising.

Angry bird started with a Finnish operator first, and then reached scale. And then Apple accepted them.

Rahul – ngpay – primary monetization is via payments. It has been difficult for ngpay in the beginning. Making money directly from end users is hard but possible.

Question : Paid apps vs ad-based apps?

Suresh – brand advertising is interesting but it is not easy. Eg Angry Birds became success after Rovio had tried many other apps. Mobile CPMs are too low compared to web CPMs. Mobile ad based revenue is not a viable model. White label apps do not work as IP gets transferred to the customer.

Manik – has a mobile advertising firm-vserv – in app advertising. It is early days for sure. if a firm has a little bit success, need to promote that. Eg Angry Birds. Long tail for mobile advertising in India is quite long. Only two media agencies in India have a dedicated mobile guy. Digital ad budgets will double at least in the next few years. But next growth has to come from mobile. Clearly there is a shift in positioning.

India has 900 million subscribers. So critical mass is there. Vserv has 60 million addressable users.

Vamshi – Angry birds focused on viral marketing.

Ravindra – India is about sheer size. Just smartphones are 15 million.

Rahul – invested in Dhingana. If one has a single app firm, need to have a deep app. Stay in low burn mode. Show engagement. Dhingana is radio ad market as radio has 100s of crores in ad revenue

Predictions :-

Manik – IDG is bottom up firm. Sees app opportunities in :

1) Infrastructure and enablers – eg advertising , security, discovery
2) enterprise mobility – still very new in India
3) cool movie movie hits type approach

Rahul –

1) B2B2C model is promising, that is hwere mobile and tablets are interchangeably used.
2) LBS services can be interesting
3) Global markets are promising

Karthee – Tablets are interesting – have a larger screen.

Vamshi – tablets market is still very small.

Suresh – tablets are promising. Eg winstores on tablets. Tablet will be bigger than PC at some point.

Ravindra – very bullish on tablet growth. Everybody knows tablets now and people understand their use now. People see PC replacement to a large extent. Clinics are good use cases for tablets. As doctors and radiologists are small compared to population, healthcare sector needs productivity improvements using mobile devices.

August 16th, 2012

Selling via Social Networks : “that’s where the customers are”

excerpted from Harvard Business Review (Jul-Aug 2012 edition) article on Social Selling titled “Tweet Me, Friend Me, Make Me Buy”

Social Networks are important to sales people, that’s where the customers are.. Social Media selling has risks, but the biggest risk is sitting on the sidelines while your competitors grab customers on social networks. It makes sense for businesses today, of all kinds, to explore selling on social media. This can be achieved via structured training the sales team. Interestingly, there is scant training programs catering to Social Media selling. This activity, so far, remains in the perview of a smattering of a few leading Social Media consultants who are trying to creat awareness in this area.

The world is moving from push to pull marketing tactics. Subject matter expertise delivered via white papers and tweets is part of sales strategy now. The coorelation between such high quality SME content to actual sales achieved is difficult to measure, but the fact remains that customer engagement, brand recognition and buying decisions are dependent on content posted on such social networks. The sales executives from Online Teleconference services provider PGi use their company blog to broadcast useful content to their audience and followers, helping create a brand recognition and awareness of PGi portfolio.

It’s where the customers are

Studies conducted by Experian Marketing Services indicate that social networking now accounts for 15% of internet visits in the USA. LinkedIn, the professional networking site, now boasts 100 million users, most corporate folks who are at various levels of potential customer firms.Twitter has more than 100 million active users and Facebook has almost close to 1 billion users, 14% of global population.

How Social selling helps

a) Prospecting : Cold Calling and email blasts are being fast replaced by prospecting potential customers on social networks. It seems the customers are more responsive to short messages sent via social networks from friends and contacts. Often the sales reps do not have to start the conversation, but rather can insert into an existing problem or situation being discussed on Social networks. Eg a client executive could be complaining about phone services, phone company sales reps can pick up such conversation and approach that customers with telco solutions and offerings. “A lead today can be a complaint on Twitter, a question on LinkedIn, or a discussion on a Facebook page.” Social monitoring tools like HootSuite allow such lead generation to be automated and integrated into a firm’s CRM system.

b) Qualifying leads : Using data intelligence tools like InsideView, salespeople can gain relevant, real-time insights about the companies and buyers they’ve targeted. “Follow”, trigger alerts, direct messaging are compelling tools on social networks which allow sales reps to research their prospects and be prepared for the sales presentations or sales calls. The key decision makers can be researched and targeted as direct contacts on social networks.

(CellStrat experience : LinkedIn is surprisingly powerful to make contacts and penetrate firms at senior level as per our experience)

c) Managing relationships : Sales remains a relationship-driven activity, but “who you know” is now trumped by “what you know about who you know”. Social networks are being used by sales reps to “know their customers” and what their customers are discussion online or in tweets. This helps empower the sales reps with valuable knowledge about prospects when making contact with them.

As to governance and credential risks associated with using social networks, firms can have in place policies and training for sales teams, to ensure that the employees do not end up causing trouble for their firm via inappropriate or questionable activities online.

It would not be a stretch to say that not participating in social selling puts a firm at a competitive disadvantage compared to it’s competitors, as the latter are certainly leveraging the social selling paradigm already.

August 5th, 2012

Social media spend soars HIGH

Reports say that spending of social media has gone up, currently it accounts for 7.4% of their total marketing budget, it has also been predicted that the share will rise to 46% i.e to 10.8% in the upcoming 12 months. The research conducted in February 2012 by the “Fuqua School of Business” also gave details of the  CMO report. According to this research report, the spending will undergo even more drastic upswing in the next 5 years, thereby accounting to 19.5 % of their total marketing budgets, almost tripling the current budget.

The same trend was noticed in December 2011, a study was conducted by Strong mail in conjunction with Zoomerang where 55% of the business leaders responded thoroughly in the survey and also shared that they are planning to increase their social media budgets to a greater extent by the end of this year, thereby increasing the spend behind email marketing that is 60%. This increase also reflects the passion for a channel on marketer’s part; data from an Econsultancy and Adobe survey released in February 2012, directly indicated that 54% of social media engagement was amongst one of the most exciting digital opportunities, but at the same time company marketers were  also passionate about 38% of Mobile optimization, 37% of content optimization, 31% of conversion rate optimization, 27% of  brand building/viral marketing and 24% of video marketing.

B2C Product- Firm’s “HIGHEST SPENDING LEVEL”

 

The CMO survey also revealed that B2C product companies lead all industry sector in terms of spending allocated to social media, which makes it around 9.6% of their current marketing budgets, that was very clearly ahead of 8.4% of B2C services companies, 7.4% of B@B service companies and 6.2% of B2B product firms.

Now,taking a look at the next 12 months, the same trend applies  with B2C product companies again forecasting that the largest share of marketing budgets to be spent in 23% of social media, though B2B service companies and B2C service companies are expected to be on par in terms of the share of spending which is dedicated to their channel ( 19.1% and 19%) respectively.

Social Media Integration “A CHALLENGE”

Though CMO’s expect to increase their  spending on social media,yet still the channel  remains poorly integrated with the firm’s overall marketing strategy.In fact, most of the respondents rated the extent of their integration with  social media a “1” on a  ”7” point scale, where “1” represents no integration at all.Whereas only 21.1% of the CMO’s rated their firm’s integration with social media  a top “2” box score.Thus , concluding that the mean score was of 3.8 which was the highest among B2C service ( 4.5 ) and product ( 4.4 ) companies , and lowest among B2B product and services firm( both at 3.6).

Rise in Social Media Employment Y-O-Y

The data from the CMO also indicated that respondents have an average of 9 people employed in-house in order to do social media for the company which marked a rise from an average of 5.3 since the previous year. At the same time the average number of individuals from outside vendors provided a social media support for the company, increased from 1.8 to 4 during that timeframe.

(Source : Marketing Charts)

March 12th, 2012

Is e-commerce boom already in India? Probably not…

Google, India, Rajan, Anandan, Google India Managing Director Rajan Anandan gave a fascinating talk to a Geeks on a Plane India group this week, giving a snap shot of the data that is driving the consumers, entrepreneurs, trends and investors in the rapidly growing Indian web and mobile markets.

Anandan says: “We’re probably in 1996 in the U.S. in terms of the Internet market in India.” Here’s the stats from Anandan’s deck accompanied with some comments from me in brackets. India has:

  • 1.2 billion people
  • The 9th largest economy in the world, with $1.7 trillion GDP
  • 600 million people below the age of 25
  • 22 languages
  • 250 million in the consuming class — these are the folks that buy e-commerce
  • 900 million mobile accounts, with 600 million unique mobile subscribers (many people have more than one account)
  • 30 million PCs — it’ll be a mobile broadband world
  • Average revenue per user (ARPU) is $3
  • 100 million Internet users, and 120 million Internet users by the end of 2011 that’s about 10% population right now.
  • By 2015 there will be 300 million to 400 million Internet users that would still be about 10% of population then.
  • 37 percent of Internet users access the web from home, 27 percent from an Internet cafe, 22 percent from an office, 3 percent from school
  • There are 50 million mobile data subscribers
  • 5 million access Internet only on the phone but still most of them don”t buy through m-commerce
  • In 2010/2011 e-commerce emerged as a $7 billion market, with $6 billion of that going to online travel
  • By 2015 the e-commerce market is expected to be $40 billion (how will 47 e-commerce companies present in India right now survive until 2015? )
  • 67 percent of e-commerce customers buy electronics and cell phones. 18 percent buy apparel.
  • 15 million 3G mobile subscribers
  • Broadband is 250 kbps to 500 kpbs fixed line
  • The use of smart phones will grow 52 percent CAGR
  • There are 37 million Facebook users
  • Google Plus use is bigger than Twitter use
  • 23 million unique users on YouTube India
  • There will be $1.3 trillion in online ad spend in 2011
  • The English Internet will not scale beyond 200 million, says Anandan
  • 159 million read Hindi newspapers and 31 million read English newspapers
  • There will be a massive tsunami toward vernacular content on the web, says Anandan
  • 70 percent of non-travel e-commerce is “cash on delivery” (no online payments, buyers pay cash when goods are delivered)
  • This cash on delivery market has a 30 percent return rate
  • Web 1.0 and 2.0 are happening at the same time in India, says Anandan.

Some Internet sites that have found success in India:

Considering numbers above, anybody feeling that e-commerce is here and now and they will miss the boat if they don’t enter now can re-think as even if they start 1-2 yrs. down the line, they would be good as internet penetration is still low and more purchase is happening in COD mode than online mode. But, if people feel it would be good to have presence now online so that they are ready when actually penetration rises, then my personal suggestion would be to have enough cash to be able to sustain until then.

For some time, people willing to enter e-commerce have been asking us if they should have wapsite or an app, we have been advising them to have wapsite now and apps soon as in long run leaving either will be a wrong decision.

What do you think about e-commerce state in India? I would love to see your comments…

(via GigaOm)

December 15th, 2011

Indian e-commerce – nuances and challenges

Everybody and their grandma in India now knows that Indian e-commerce market is set to explode – it is expected to go from current 7 billion dollar (of which 6 billion is online travel alone) to 40 billion by 2015 – ie in 3-4 years.

In view of this, dozens of new ecommerce startups have launched in India and some of them are increasing market share at a breakneck speed. Some of these include Flipkart, Snapdeal, Exclusively.in, yebhi.com, babyoye.com, myntra.com and several others from large brands as well as startups.

But Indian ecommerce is not like that in the West – where online credit card payment and cheap shipping are the order of the day. India has presented these online commerce vendors with its own unique challenges – eg. :

  • COD : customers are reticent to use credit cards online. COD or Cash on Delivery is the preferred method for payment for most online sales.
  • Free Shipping : Indian online customers do not want to pay for shipping – as a result, Indian ecommerce vendors have to bite the bullet on shipping as well.
  • Categories for online shopping : Indian customers so far are mostly interested in online travel purchases – but when it comes to other products like toys, baby products, household items, books, music CDs and such, physical stores still take more than 99% of the customer pie. Of course, now electronics, books and apparel are some products gaining traction in online sales.
  • Where are the profits ? : Of course, it is well known that most India ecommerce startups are taking a loss on online sales – just to grow market share. One expects a market shakeout on this sooner or later and only the strongest (and well funded) ones will survive this fight to the top. We feel that the shakeout will begin to happen over the course of next year with several pulling the plug on their ventures or being bought out by other stronger ones.

Above list highlights some major challenges for the Indian ecommerce players. Enter Indian Jugaad – or Indian version of “make it work somehow“. New services like Gharpay and chottu.in have been launched to tackle the COD cash collection challenges, as well as product delivery in some cases. These services are building networks of collection agents in various circles or cities and provide Cash on delivery collection services as well as product delivery for the major vendors like Redbus.in, Myntra and Flipkart. Within months of launch, these services have signed  up many leading online vendors as customers.

Well – one has to admit – when it comes to India, it is all about “Jugaad Karo“. In India, if there is a problem, there is always a “Jugaad solution” lurking somewhere – it is upto creative entrepreneurs to find such gaps and exploit them to make new ventures.

December 14th, 2011

The Indian Web and Mobile Markets by the numbers

(excerpted from GigaOm Pro article at http://t.co/20B9JVyo)

Katie Fehrenbacher with Gigaom is traveling with Geeks on a Plane in India. She writes following stats provided by Google CEO Rajan Anandan to the Geeks on a Plane group :

Rajan Anandan on Indian internet scene : “We’re probably in 1996 in the U.S. in terms of the Internet market in India.”

Here’s the stats from Anandan’s deck. India has:

  • 1.2 billion people
  • The 9th largest economy in the world, with $1.7 trillion GDP
  • 600 million people below the age of 25
  • 22 languages
  • 250 million in the consuming class — these are the folks that buy e-commerce
  • 900 million mobile accounts, with 600 million unique mobile subscribers (many people have more than one account)
  • 30 million PCs — it’ll be a mobile broadband world
  • Average revenue per user (ARPU) is $3
  • 100 million Internet users, and 120 million Internet users by the end of 2011
  • By 2015 there will be 300 million to 400 million Internet users
  • 37 percent of Internet users access the web from home, 27 percent from an Internet cafe, 22 percent from an office, 3 percent from school
  • There are 50 million mobile data subscribers
  • 5 million access Internet only on the phone
  • In 2010/2011 e-commerce emerged as a $7 billion market, with $6 billion of that going to online travel
  • By 2015 the e-commerce market is expected to be $40 billion
  • 67 percent of e-commerce customers by electronics and cell phones. 18 percent buy apparel.
  • 15 million 3G mobile subscribers
  • Broadband is 250 kbps to 500 kpbs fixed line
  • The use of smart phones will grow 52 percent CAGR
  • There are 37 million Facebook users
  • Google Plus use is bigger than Twitter use
  • 23 million unique users on YouTube India
  • There will be $1.3 trillion in online ad spend in 2011
  • The English Internet will not scale beyond 200 million, says Anandan
  • 159 million read Hindi newspapers and 31 million read English newspapers
  • There will be a massive tsunami toward vernacular content on the web, says Anandan
  • 70 percent of non-travel e-commerce is “cash on delivery” (no online payments, buyers pay cash when goods are delivered)
  • This cash on delivery market has a 30 percent return rate
  • Web 1.0 and 2.0 are happening at the same time in India, says Anandan.

Some Internet sites that have found success in India:

Thanks to Gigaom for the above post.

December 14th, 2011

Deals, deals and more deals

The best way for brands to attract followers on social sites is to offer giveaways and discounts, according to data from Nielsen/McKinsey’s NM Incite. Almost 60% of users say they use social tools to find discounts, and almost a quarter say they do so on at least a weekly basis. “While some may argue that consumers’ interest in discounts has faded, Nielsen data shows the desire for deals is still strong worldwide,” the researchers say.

Above is also proved by the fact that ventures like Snapdeal, a 1.5 yr. young Indian but hugely funded start-up has grown from just 10 employees to 600 strong and continue to grow at a fast pace. Their top management team is continuously hiring at a fast pace and are going to add another 400 people in next two months. They say market is too big for even all existing players including likes of Groupon and thus they need huge man power to be able to capture further market share fast.

Another Indian company Geitit yellow pages has started their own hot deals site by the name of  getithotdeals.in they may be at an advantage as they are yellow pages directory publishers and already have all the necessary data across major cities on India. Thus, they would be able to use their existing manpower and resources to collect deals and discounts and populate the site with 1000s of deals from across India.

November 10th, 2011

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