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TECH TALK: 2007 Tech Trends: India: 1. Real Rise of the Internet

January 22nd, 2007 · No Comments

What are the key tech trends that we will see in India in 2007?

The Internet came to India in August 1995. It has taken more than a decade for the real power of the Internet to become apparent. Part of the problem has been the pathetic broadband infrastructure compounded with the low penetration of PCs and the lack of really useful services other than email and IM. Now, we are seeing all of this change.

The services that are driving the boom in the Indian Internet fall in three categories.

The first is the one which has been there all along information-seeking. This has generated the traffic to general-purpose portals like Yahoo, Rediff, MSN and Indiatimes, and now search engines like Google.

The second category has the connection sites for jobs and matrimonials. Here, sites like Naukri, Monster, Shaadi and BharatMatrimony have done very well, and created excellent revenue traction through a mix of online and offline initiatives.

The third category which is now seeing rapid growth are the online transaction sites with ticketing leading the way. From train to flight booking, the Internet has emerged as the most convenient way to alleviate the pain of standing in queues or calling up intermediaries (travel agents, for example). Travel portals are seeing great growth. Online stock trading has been another winning category.

All of the services are piggybacking on the rise of Indian consumerism a growing class of people with increasing money to spend. The convenience of eCommerce provides them the choice which they may not often get at their neighbourhood store (even though the retail revolution is slowly changing that).

Into this mix has come money from angels and venture capitalists. There is over a billion dollars available at various stages of a companys evolution. Companies are being seeded in different verticals. Everyone recognises that these are early days and that the real battle for leadership has just begun. So, it is like a landgrab out there. In some ways, it may resemble 2000 but with a significant difference. This time around, there is both an audience of willing users. From a business model perspective, online advertising (especially, performance-based pay-per-click advertising) offers a revenue opportunity other than transaction fees.

There are plenty of verticals waiting to get populated in India. 2007 will see the real coming of the dotcoms as the Internet user base swells and the Internet starts becoming a utility in peoples lives. There is plenty of room for growth. In its September quarter, Rediff had just 160 advertisers spending about Rs 14 crores on its site. Expect not just the number of advertisers but also the amount spent to go up significantly in 2007. The homegrown Indian portals will have to battle the search-advertising combo of Google, Yahoo and MSN. They can draw heart from China where it is the local players who have been the big winners.

Tomorrow: Mobile Data Growth

TECH TALK 2007 Tech Trends+T

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