Online businesses should be making a comeback in India. Currently the Internet subscriber base stays at 38.5 million (according to IAMAI), although this number is contested by one of the brightest and young researchers in India like Laveesh Bhandari (he runs a research and analytics firm called indicus) in a private chat with me at the recent ContentSutra do in Delhi. In my opinion, internet has to grow whatever is the current base. Five years down the line, India should have a net base which can be monetised in a big way. I am sure about it.

I want to take your attention to Alok Mittal’s post (in VentureWoods.org) on the opportunities in Internet. Alok has built a successful Web 1.0 company, JobsAhead.com, in India and sold it to Monster.com last year. I am reproducing it below:

One thing that I have been thinking about is the set of online businesses that are ripe for indian market. In 1999-2000 the dotcom boom lasted only 3 months in India, and as such, some ideas and teams that might have had merit could not get funded. Five years later, a lot of interest is coming back. One set of ideas are clearly around “concept arbitrage” — bring and localize ideas that have been successful elsewhere. JobsAhead was an example of this, so was Baazee. Some examples of obvious holes:

1. Online consumer travel. Makemytrip got funded few months back, and I hear some others have funding too. This space is getting competitive. Are there models which people are not looking at but are valuable? A travelog site for example (check out my Leh travelog).

2. Ecommerce — there is still no amazon.com equivalent in India. I still buy most books I need from amazon, and pay $7-8 per book for shipping. And I spend around $500 per year doing this. Firstandsecond and Fabmall started with promise but (imho) succumbed to low funding and premature entry (though I believe, both sites are still there and may make a comeback).

Horizontal portals are taking some of this action away, in travel, in ecommerce and so on. But, focussed brands will have potential.

Would love to hear about big ideas waiting to happen in India (either concept arbitrage, or otherwise)… Any thoughts?

Five Great Internet Businesses In India

One of my readers has some interesting insights into the online businesses in India. It came in as a comment but is worthy of going as a a main blogpost (I like doing that since they get a good display and get widely read). So here goes some valuable thoughts from an anonymous reader:

Too much attention has been given to IT start ups and software companies. Businesses outside of software domain, but with an online model for transacting hold the key to INDIA all round success.

Sucess is bound to follow in some non IT ventures with an online model where there is:

1) Scalability

2) Faster, efficient, customer-delight service

3) The same similar offline business model sucks and customers are looking for an alternative mode of doing the transaction

Five businesses growing at a fast pace in India that come to my mind are:

1) Online Trading

2) Online Recruitment Services

3) Online Ticketing Services

4) Online Realestate/Wine Websites

5) Expatriate/NRI Centric models

1. Online Trading Websites

You might have seen the frenzy created by indiabulls.com and their successful IPO and the spectacular results as people embraced online investing faster rather than the offline broker relationship as it bypasses all the hassels

Hdfcsec.com, Icicidirect.com, Paisabuilder.in (IDBI’s new venture), Kotakstreet.com, Sharekhan.com (SSKI group) are some of the equity trading portals doing good business as equities both - primary + secondary market, options, NEW IPOs, commodity trading etccan all be done direct from ur online account. So the loop among YOU, YOUR bank account, YOUR online broker is complete.

Here in US similar models like E*Trade, Ameritrade, Scottsdirect, TAIB have similar models

2. Online Recruitment

BOOM or BUST, there is always demand for recruitment/job websites and niche domains to co-exist. www.dice.com is a complete IT focused job portal in US which does not have a similar player in Indian space.

Naukri.com and monster.com were doing brisk business post 2001 when almost most of the sectors were in a slump following dot com bust and 9/ 11.

Leading Newspapers are slowly moving into this space, like the Times of India’s timesjobs.com portal

2. Online ticketing services

Just imagine the pain, time involved in buying a train ticket and movie tickets for a new movie. The thought itself kills the idea of planning such an event.

Now online ticketing portal by Indian railways is doing good business and quarterly sales are shooting up by more than 100%. (IRCTC)

Same is the case where Movies/multiplexes are moving towards online ticket services and some players are even delivering them personally through couriers to the customers residence when they book their movie tickets online

PVR Cinemas -http://www.pvrcinemas.com/pvr/index.asp

3. Wine/Real estate

Our own Mahesh Murthy (Passionfund) funded an idea which was ahead of its time for the Indian markets in 2000.

Wine.com does lucrative online business in US and a country like India which has taboo attached to drinking is changing fast with the Gen X taking over.

Wine companies are seeing their reveneus climb northwards as evident by the results, expansion plans of Chamagne Indage, Grover Wineyards, Sular vineyards, but a good Inda centric brewery site with buy/sell/faqs/online social networking for drinkers is missing. Mahesh Murthy-funded Tulleeho is trying to fill this gap.

Real estate

Realestate has been liberalized and the industry is expected to be $100 bilion by 2010. The offline market is fraught with brokers, dalals, with dubious track records, unclear titles, no transparency in the entire process and real estate is branded as not a liqufiable asset like cash or shares as the entire transcation to buy or sell would take months.

If this entire process is made easy and transparent, then people would flok to online space.

US has some good models like zipRealty Inc., which is using the Internet in a futuristic way to buy and sell homes, cutting costs in the process >> http://www.ziprealty.com

India has woken up to this potential and we see a new wave of portals from

the early movers like

Indiaproperties.com

99acres.com ( NAUKRI.com’s realty venture)

Indiaproperty.com (SIFY’s new Realty venture)

5. Expatriate/NRI Centric models

Hassle free Remittance services for NRIs like WesternUnion, Times of Money hold potential keeping the umbilical cord active for expatriate remittances to anywhere, anytime, anyamount (as long as it is less than $2k) in India witin 24 hours

Sulekha.com >> which provides many services for Indians who entered US for the first time or for job/accomodation searches for NRIs in US

Your Man In India >>> TTK group’s portal which provides various services for NRIs outside INDIA, who want small things still done in India but can’t ask their parents to take care of these activities as the parents may not be aware, illeterate, old, disabled etc. provide good market.

Posted on 12/25/05, 9:03 AM
in: Main Page
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