Is there money to be made on the Internet in India?

17 March, 2016

Thirty million plus internet users in India is not a number to snigger at. Check out Linkedin, Facebook, Orkut, Expedia, Amazon, Youtube, Google  and you will find that there are hundreds of thousands if not millions of Indians actively engaged with these sites. On the home front, names like Rediff, Naukri, Shaadi, Bharatmatrimony, Baazee, Makemytrip, Yatra, Cleartrip, Indian Railways boast similar usage patterns.

Indians are accessing the internet from home, office, cybercafé, college, mobile, wherever. Indians are no different from the rest of the world in their online needs – they are looking for entertainment, information, convenient commerce, social communities like their counterparts in Brazil, Poland and China and the US.

So why is there so few online successes in India today when there is such a great need?  The popular reason seems to be “lack of broadband”. While broadband can definitely enhance the user experience,  lack of broadband is not the reason why millions of Indians today are not widely adopting internet sites within India today.

Multi user environments like office and cybercafés do provide ample broadband access today. Many applications also work fine on narrowband access.  Many global and domestic companies have done just well with the current internet situation, so why can’t more such companies exist?

The answer is simple. The main reason is that there are not enough compelling applications online today that really solve a customer need. Take for example, bus ticketing online. Intuitively,  a great concept.  There is a consumer need to book bus tickets online and get them delivered to your doorstep. There is no reason why bus ticketing online cannot take off just like railway bookings did. However, if you go to any of the popular bus ticketing sites today, you will find limited inventory which either kills the consumer experience or limits the audience appeal.

The reasons for this are structural within the bus operator industry – fragmentation, lack of online connectivity, questionable practices (double booking), lack of manpower to manage orders and fulfilment, etc.

So unless the bus ticketing sites decide to solve these issues, consumer adoption may never take off.  A pretty looking site with limited inventory doesn’t solve mass need. The day these bus ticketing sites offer breadth of inventory, instant bookings where the seats are guaranteed without a fear of double booking, flexibility of payment options and prompt fulfilment, you will see adoption take off. Online companies, especially in ecommerce sometimes need to solve offline structural issues to succeed.

Another good example of a lack of compelling application is social networking . There are more than a dozen Indian sites seemingly trying to solve a need.  Don’t understand what the need is given that Facebook, Orkut, hi5, etc allow Indians to connect, chat, poke, play games, flirt, form community groups, share their moments, etc.  I firmly believe that if there is a site in India that meets a compelling social need that is not being addressed by the global sites today, it will take off, no question, broadband or no broadband.

There is a lot of wealth to be created by Indian entrepreneurs who come up with Internet companies that address a real need.  And it may require more than just putting up a pretty site and praying for something great to happen.  Nexus India Capital has invested in two companies that are trying to solve a real need online – Komli and .  Komli is an online ad network in India and DimDim, is a free web conferencing platform  – both addressing real needs in the country today. 

Komli is helping Indian advertisers advertise across a list of online publishers that would otherwise not be accessible to them and Dimdim allows small businesses to hold a web meetings for sales training, seminars, etc at no cost to them.

Hope to see more online companies emerge in the future that address a real need. There is tons of money to be made on the Internet in India.


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Is there money to be made on the Internet in India?

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