The whole discourse on 'Internet India' in the media and in business forums leaves me with an uneasy feeling of déjà vu. It sounds a little too close to the "size and opportunity of the Great Indian Middle Class" saga that was enacted out not too long ago. Small current markets were forecasted to grow to huge numbers, born out of the analogy school of forecasting that applied 'elsewhere' metrics of penetration, per capita consumption and growth to the humongous numbers of people in India. To the quantitative analysis, we then added the qualitative element - the Indian consumer, we believed, was 'emerging' and the ugly duckling was about to become the beautiful swan. The result was a very seductive picture of market opportunity that was expected to happen with a momentum of its own, powered by the 'who can resist progress' compulsion.
What followed, as they say, is history. There was the headlong rush of the so called new MNCs, launching never before products and services in the Indian market (and local companies followed, in their desire to get their fair share of the future pie). Then came the damper of disappointing volumes, and then the inevitable media post mortems of "where did who go wrong". The parallels in the e discourse that we are now experiencing are too close for comfort. Can we apply what we have a learnt from the great Indian Middle Class experience, and use it to develop a framework for thinking about and shaping the future of Internet India?
Reviewing all the numbers being quoted, it appears that today the number of connections are around 2.5 lakhs which is supposed to translate into around 8 lakh users or a million users. By 2000 end, the numbers being quoted arethat there will be a little over 5 million users, according to one publicly quoted study and 2 million users according to another. By 2003, this is supposed to increase to 8 to 9 million users.
The skeptics say that 9 million is not much to rave about in the context of the Indian consumer base, and anyway much of this number will be business establishments, given that even a low end pc costs Rs. 30,000 and a high end one Rs. 50,000. (After all there are 2.7 million refrigerators being sold, with so much combined effort of the marketers). So yes, say the skeptics, there will be a sea change in how business to business is transacted, but the jury is still out on the business to consumer scenario.
The fervent say that we are seeing price reductions in internet hours, and pc penetration need not be a show stopper, with cyber dhabas, net television and cable operators turning ISPs. So the way to think about it is that the adoption universe is 3.6 million buyers of CTV today, expected to 'leapfrog' to 5 million units in the coming year, and continue growing at 30% year on year. Add set top boxes at low prices, and the ready to convert universe of CTV owners is even larger. Further, the relevant universe of urban cable homes is 40 million. So, say the fervent, we could be looking at a sudden explosion, which would make the current forecasts look way too small.
But beyond just the numbers is the issue of profiling and understanding the Indian netizen of today and the future, which would significantly add to our understanding of e- India. Are they homes, offices, office users using company provided accounts the way they use company provided cars? Early adopters everywhere in the world are the rich. So are these numbers to be viewed as presenting a nice, niche, easy to get at , rich people consumer opportunity?
However to my mind, the more interesting question is what will drive Internet adoption in our country? Our lessons from what drove (or in many cases did not drive) growth of various consumer goods in the so called middle class is simply affordability, availability and relevance (perceived value) - the three golden keys. We also learnt that driving growth is different from waiting for growth to happen. Those categories where players engineered growth and made it happen, grew. Those that waited for growth to happen, as in "there are things happening out there which will benefit us, did not.
So triggers like an organised second hand pc market (which are so ridiculously cheap) and / or companies with financial muscle and an innovative spirit who decided to storm the market with dedicated booths and / or offer free Internet time for their potential customers could indeed change the landscape totally. Is that happening, is the question we need to ask; an even better question would be "can I make that happen?" Affordability and availability , we have talked of. Let's explore relevance or high perceived value as a driver to growth.
I read about some net content providers who are targeting the teenage education market. Subject specific queries for students, post your problems and they will be answered by a panel of ICSE teachers drawn from various schools, tutorials, on line work sheets..... Develop this further to provide services which could make you more competitive for all the entrance exams, and see what an amazing adoption rate we could have! That's because this is the most pressing 'life and death' agenda in the mind of every middle class family. Tuition and coaching classes cost a packet, school teachers are overloaded, parents not well informed enough, college seats scarce and there is a desperate search for solutions. Add to this an intrepid company who sets up and manages free access at a community level, and I suspect that there will be a quantum jump in net users. On the other hand, leave it to bawarchi.com or jeans and music.com, and the market size and character will look very different.
So perhaps the biggest driver of internet usage in India will depend on the number of companies who offer services that are relevant and empathetic in the local content to create consumer pull, and who find innovative ways to make availability and affordability happen. Wasn't that our key learning from the great Indian Middle Class saga?