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

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

What Emerging Market Customers Really Want from Internet

- An Indian Perspective

Tathagat Varma,Sr. Director

Yahoo! India

Product Innovation Management 2012 Conference 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?

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

Global Economy

• India & China dominated World GDP for 90% of last two millenniums

• Balance restoration is underway!

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

Projections are wild by any standards!

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

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)

Econo

my

• 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

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

India’s Digital Impediments

Infrastructure• Costly, • Low, and• Poor Quality

Bandwidth

Content• Lack of Content

in Regional Languages

eCommerce• Hyper

competition,• Payment and• Delivery issues

eGovernance• Lack of seamless

end-to-end systems

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

Indian subcultures…a Billion niches…

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

Internet is SEXY!

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…but also brutal!

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

Growing ‘Indian Internet Class’…

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

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

By Reach (Unique Visitors)

Google (95%)

Facebook (83%)

Yahoo! (66%)

Microsoft (48%)

Wikimedia (35%)

Times Internet (34%)

Network18 (30%)

Ask Network (26%)

Rediff (25%)

NIC.in (22%)

By Engagement (time spent)

Facebook

Google

Yahoo!

Network18

Rediff

NIC.in

Microsoft

Times Internet

Wikimedia

Ask Network

By Activity (time spent)

Social Networking (25%)

Entertainment (10%)

Portals (9%)

Email (8%)

Search (3%)

Business / Finance (3%)

News / Information (2.2%)

Retail (2.2%)

IM (2.2%)

Games (1.8%)

Directories (1.8%)

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

Mobile

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

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)

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

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

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

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

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Retail

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

Travel

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Travel

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Case Studies

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

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

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)

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

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

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

Facebook

• 30% of new Facebook users register via mobile phone

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

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

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

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_campai

gn=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/

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

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

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

Thanks

Blog: http://managewell.netEmail: [email protected]

Slides: http://slideshare.net/managewellTwitter: http://twitter.com/TathagatVarma

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