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

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My presentation at 36th Product Innovation Management Annual Global Conference organised by PDMA (Product Development and Management Association) at Orlando, Florida Oct 20-24, 2012. I have taken a broad-brush stock of various trends from the Indian internet market and what kind of solutions are seeing higher adoption.

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

  1. 1. What Emerging Market Customers Really Want from Internet - An Indian Perspective Tathagat Varma, Sr. Director Yahoo! IndiaOctober 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  2. 2. 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, 2012Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  3. 3. 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
  4. 4. 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
  5. 5. Projections are wild by any standards!Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  6. 6. India – In NumbersPeople • 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 methodProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  7. 7. 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 issuesProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  8. 8. Indian subcultures…a Billion niches…Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  9. 9. Internet is SEXY!Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  10. 10. …but also brutal!Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  11. 11. Growing ‘Indian Internet Class’…Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  12. 12. 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%)Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  13. 13. MobileProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  14. 14. 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
  15. 15. 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 viewProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  16. 16. 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-$100Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  17. 17. RetailProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  18. 18. TravelProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  19. 19. TravelProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  20. 20. Case Studies• Travel Rail: IRCTC• Ecommerce: Flipkart• Social Networking: FacebookProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  21. 21. 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
  22. 22. 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 employeesProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  23. 23. Facebook • 30% of new Facebook users register via mobile phoneProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  24. 24. 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 contentProduct Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  25. 25. 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/Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  26. 26. 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_b57020Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida
  27. 27. 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=2Product Innovation Management 2012 Conference October 20-24, 2012 Buena Vista Palace Hotel & Spa Orlando, Florida

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