This is an interesting time for the Indian online industry. Whether one looks at the number of internet users, the ad spend on internet, the value of e-commerce, the total size of venture capital funds invested in the online ventures, all of them have been growing year on year in the country.
Mahesh Murthy, founder and CEO of Mumbai-based search engine marketing firm Pinstorm, estimates that the internet attracted over Rs 600 crore of advertisers’ money in 2007 which is about twice of what it was in the previous year, and about half as much as what it would be this year.
According to a joint study by Internet and Mobile Association of India (IAMAI) and IMRB, the consumer internet market in India is expected to grow by 30 per cent and touch Rs 9,210 crore by the end of March 2008, as against Rs 7,080 crore estimated for the fiscal year 2006-07.
The entry of Reliance Anil Dhirubhai Ambani Group is only going to accelerate the growth of the Indian online industry. The group has allocated Rs 100 crore to be spent on its online gaming venture Zapak, and a similar amount to be spent on its social networking site BigAdda and online movie rental business BigFlicks.
Also, there is no dearth of venture capital fund to help the online entrepreneurs execute their plans and scale their online ventures as and when possible! The year 2007 witnessed a good number of Indian internet companies receiving VC fund. These included online advertising company Komli and social networking site Minglebox.com both of which received $7 million of venture financing.
The online medium currently attracts less than 2 per cent of the total ad spend in the country but the good thing is that the Indian online advertising market is believed to be growing 60 per cent year on year. Mark Read, CEO, WPP Digital, recently said, “In India we expect strong growth in the digital medium though access remains the limiting factor.”
What Mark Read left unsaid was the fact that less than 5 per cent of India’s population have access to the internet. But again the good thing is that the picture is getting brighter with the passage of time. According to IAMAI, the number of internet users in India has increased by 40 per cent at 46 million in September 2007 as compared to 32.2 million in September 2006.
The government of India has taken an ambitious initiative to set-up 1 lakh broadband internet kiosks in the countryside to enable rural Indians access the internet. This move is only going to widen the reach of internet in the country. Already, 41 per cent of the total internet users in India are from the smaller towns and cities with less than 1 million population, according to IAMAI.
There is significant excitement for the shares of Indian online companies. The unexpectedly huge success of the Info Edge (Naukri.com)’s IPO launched a year ago is just a case in point. Not surprisingly, a number of Indian online companies including MakeMyTrip.com and People Interactive (Shaadi.com) have already expressed their intentions to go for public listing in the next 12-24 months.
Corporate houses are increasingly leveraging the internet to create brand awareness and reach their target audience. Many companies have launched brand specific websites such as SunsilkGangofGirls.com and micro sites like MentosHelpline.com. Virals, an online version of the words-of-mouth marketing, an example of which is Betano1.com, have recently gained huge traction in the country. Some of the Indian companies have also launched corporate blogs to establish an online communication channel to interact directly with their current and prospective customers.
It’s interesting to know that Google-owned video sharing site YouTube.com is one of the top 10 most visited websites by the Indian internet users. And this is when the country has less than 3 million broadband subscribers. Now, it remains to be seen how online video content is going to be leveraged by Indian marketers and recruiters for their benefits.
Advertising is going to be the main source of revenue for online publishers. Subscription model for online content is very less likely to find the netizens’ favour. The India Today group, for example, has already jettisoned the subscription model and has started making its online content freely available to the internet users.
Many people believe that the real potential of internet lies in the mobile space for the sheer number of mobile phone users in the country. But one view is that personal computers and laptops would continue to be the predominant medium of accessing the internet, at least till the mobile operators start allowing their subscribers to access the internet through their mobile phones freely and without any restriction. Interesting, let’s wait and watch!
