From an agencyfaqs interview with Manish Agarwal, vice president, marketing, Rediff.com: “21-25 million is the number of active users in the last month; 35-38 million is figure for the last three months and 72 million is the figure for people who have ever used the internet…The growth of the online industry is about 25 per cent. ”
Knowledge@Wharton features a talk by Gordon Wu which could have useful lessons for India:
China has $1.2 trillion of foreign exchange reserves today. Back in 1978, 20% of the people lived in the communes. Everybody was equal, but equally poor. Today we are talking about some people who make a lot of money. Now, 43% of the people live in cities and within the next 20 years, I bet your bottom dollar that the number of people living in cities in China will be the greatest migration that the world has ever seen. Urbanization will probably hit a figure of 80%. This is unheard of, in my mind. I’ll give you an example: When I first went to Shenzhen to work there in 1979, there were only 80,000 people in that city. Today it has 10 million people. That is the number of people who have migrated to the city in the past 20 years.
China’s economic growth was driven by the manufacturing industry. Of course, the country also has a really stable government; the Communist Party controls the whole nation, and sometimes there are some hiccups, but by and large things are really stable. The stable political environment combined with a free economy as free as the government allows it to be has made all these successes possible.
Om Malik writes:
Necessity, they say is the mother of invention. It couldnt be more true in case of Africa, where pre-paid airtime is fast becoming the virtual currency for Pan-African trade, overcoming conventional currency exchange and lack of banking infrastructure. It started out as phone users in Nigeria, especially in the rural areas trading minutes, but then the transactions took a mercantile trend.
Instead of paying cash, people started paying in airtime. Minutes became moolah and since the trend has caught on, and is being used for cross border trade as well.
The Economist writes: “India needs a period of slower growth to reduce these excesses and this requires higher interest rates. Constrained by politicians, the RBI’s tightening has been timid. In the past year interest rates have risen by less than the rate of inflation has, so rates have fallen in real terms. Relative to consumer-price inflation, the overnight lending rate of 7.75% is close to zero in real terms. That is much lower even than China’s real benchmark lending rate of 3.6% (only China’s deposit rates are lower). Indeed, India probably has the lowest real interest rates of any major economy, despite having one of the world’s fastest growth rates. Without more tightening, expect the sweltering heat to continue.”
WSJ writes about a Nokia service that teaches English to China’s mobile users:
Nokia Corp. launched a service that enables Chinese to download English language lessons using their mobile phones, an effort by the world’s biggest cellphone maker to tap into a growing fascination with English in the world’s top wireless market.
Nokia plans to charge users for the new, made-for-China service, called Mobiledu, which it launched yesterday. The service, which includes both audio- and text-based lessons, aims to capitalize on China’s enormous language-learning market, which has been growing quickly as Chinese embrace global business and prepare for an influx of foreign visitors during next year’s Olympic games in Beijing.
The lack of power is the cover story in a recent issue of Business World. The New York Times also joins in:
[The] electricity crisis…represents one of the major hurdles to Indias ability to hoist itself into the front ranks of the global economy.
Look up at the tops of buildings, and on any given day, you are likely to find three, four or six smokestacks poking out of each, blowing gray-black plumes into the clouds. If the smokestacks are being used, it means the power is off and the building whether bright new mall, condominium or office is probably being powered by diesel-fed generators.
According to the Planning Commission of India, 600 million people roughly half the population are off the electric grid. For this reason, it is impossible to estimate accurately the total national shortfall.
But no matter how it is calculated, there is no doubt that Indias electricity crisis is becoming all the more acute for the roaring pace of the countrys economic growth and the new material aspirations it has generated.
China Web2.0 Review summarises:
# As of March 2007, there were about 39 million active wap users in China, they used mobile handsets to access WAP sites in last six months. About 90% among them are internet users as well, they access internet via PC in last six months.
# Most of the WAP users (over 60%) live in east of China, the concentration rate of WAP users are higher than that of internet users and mobile subscribers.
# About 9.7 million, or about one forth of total WAP users, live in Guangdong Province.
# 57% users will use WAP at least once a week.
# 26% users pay RMB 11-20 yuan per month for WAP usage, 23% users pay 21-50 yuan and 20% users pay 6-10 yuan.
Jorge Frayer writes about the good and the bad from his recent India trip:
The internal airline service is superb. Hot meals, a smiling crew, on time, new and clean planes, and a large choice of airlines. The other is the relatively few number of beggars that can be seen in Mumbai. It is as if people are too busy making money and begging is no longer lucrative.
For the majority of people, life in India continues to be very harsh with few material rewards. Today 5% of India can afford to do just about anything, 25% can get by comfortably and the rest live in material poverty. Their high tolerance, low expectations, plenty of great food and rich social structures lets the majority of India continue to live in peaceful coexistence.
However, it is this general sense of tolerance and low expectations that may be working against India in rebuilding its grossly inadequate infrastructure, virtually untouched since the British left after the second war. Inefficiencies in local governments add to the lack of progress and modernization. There is little sense of planning of public works and no sense of scheduling. Things begin and are left incomplete, to hopefully get restarted in the near future. India seems to lack the standards and practices to rebuild and expand its infrastructure.
The New York Times writes:
[If] the [Indian] government has its way, Nagpur will become a destination city itself. In an experiment that is highly unusual for this most unplanned of countries, the government is doling out money to Nagpur and other second tier cities to help them modernize fast.
The plan is to provide the kind of modern conveniences, and infrastructure, that will attract more international investors to India. In doing so, the government is following the lead of China, where the government has invested in infrastructure such as roads and airports, taking a build-it-and-they-will-come approach that has drawn foreign corporations helping to fuel the countrys boom.
Users in emerging markets also want to see more value from PC vendors, said Bryan Ma, director of personal systems research at IDC Asia-Pacific, citing the success of Nokia’s 1100 handset, which has been a hit in India because it includes a flashlight — a useful feature in a country that suffers from frequent power outages.
“At the end of the day it’s not the technology or the device, it’s the application people are looking for,” Ma said.
One application that has proven popular in many emerging markets is access to commodity prices, which lets farmers and fishermen know when and where they can get the best prices for their goods. Other popular applications include communications, such as video conferences that allow people to speak face-to-face over the Internet, and access to government services, he said.
International Herald Tribune writes:
Mobile phone usage is rising faster in India than anywhere else in the world, with some six million customers added every month. Large cities and many medium-sized towns are already blanketed with retail outlets, and competition among manufacturers and carriers is fierce.
Rural India has become the next frontier for the industry’s biggest players. About 70 percent of India’s 1.1 billion population, 770 million people, live in villages and rural areas.
Phone manufacturers have begun introducing new products that will be targeted at rural markets. On Thursday, Reliance, the Indian mobile phone service provider, said it would sell a Chinese-made phone that would retail for 777 rupees, or $19. Nokia also unveiled seven new models last week targeted at emerging markets to be priced at $45 to $120. In November, Motorola introduced the ultra-low-cost Motofone in India, costing about $40.
Sramana Mitra has a post by Sujai Karampuri:
The drivers [for growth] will be-
* Decreasing cost per line
* Decreasing operating expense
* Decreasing cost of PC (or similar device)
* Social attitudes and habits embracing broadband facilities
* More Indian content
With the decreasing cost of PCs to under Rs. 10,000 and then to under Rs. 5000 soon, and with increasing in content for Indian masses, the broadband penetration will be going through a revolution, and I call it the Broadband Revolution in India. The cost per line will dramatically reduce from the current Rs. 7000-10,000 per line to around Rs. 1500-2500 per line by 2010.
The pieces of puzzle are falling into place. With advent of wireless broadband (such as WiMAX and WiFi), with decreasing costs of PC, we will see the penetration grow slow and suddenly, when the price points have achieved that critical milestone, it will take a dramatic upswing and go on an exponential path for the next few years.
The Economist writes:
In a report on India’s consumer market published on May 3rd, [McKinsey has] added detail to the probable economic explosion ahead. Assuming annual growth averages 7.3% over two decadesa reasonable betIndia may overtake Germany as the world’s fifth-biggest consumer market by 2025. It predicts the middle class will expand from 50m to 583m, leaving only a fifth of Indians in the bottom household-income bracket, earning less than 90,000 rupees ($2,200) a year.
If McKinsey’s growth prediction looks reasonable, others look optimistic. For example, the report notes that spending on education and infrastructure will have to increase to support its analysis. Yet it is still hard to imagine so many hundreds of millions of Indians being educated to a standard befitting middle-income status. Transforming the thousands of rotten schools might prove impossible, even if sufficient money can be found. Given India’s relatively weak fiscal position, it perhaps cannot be.
WSJ has an interview with Gartner analyst Mark Raskino on CK Prahalad’s Bottom of the Pyramid theme:
What is the thinking behind the suggestion that businesses in rich Western countries should be interested in “the bottom of the pyramid?”
A couple of different ideas are connected. The first is the rate at which people of the Third World are moving from subsistence to being consumers. That means huge numbers of new people to sell new technology to, particularly in China and India, but also elsewhere.
Because you can’t spend very much money developing these products, you are challenged to create your technology innovation under serious constraints. But many of those innovations are things that would not only be useful in Third World markets, they also would come back to the First World.
There are other consequences to consider, too. Once people have, for example, mobile phones, they can exchange prepaid minutes with each other. And that can become something like a currency exchange. You might exchange minutes with the vendor in the local market, or give five minutes to your grandfather or a friend as a present.
Wired Magazined writes about plans to create a new Chinese city:
Dongtan breaks ground later this year on a plot about the size of Manhattan on Chongming Island. The first condos and commercial space will hit the market by 2010, around the time a 12-mile bridge and tunnel combo and subway extension will link the city to Shanghai’s new international airport (45 minutes away) and financial district (30 minutes). By 2050, Dongtan will have a half-million residents, more than Miami or Atlanta today.
That may count as a cozy little town in a country of 1.3 billion people. But Dongtan is a dramatic gambit, and not just because a whole city will rise, fully realized, from nothing. With Dongtan, Arup is testing a radical new approach to urban design, one that suggests cities across China and the rest of the developing world can actually get greener as they grow.
An excerpt from Ajit Balakrishnan’s convocation speech at IIM-C:
By , some say, India’s GDP in US$ terms will exceed not only the European countries and Japan but also, perhaps, the United States.
But what these reports also say, and this part is often overlooked, is that in 2040, India’s per capita GDP will be just 15% of that of the United States and a third of that of even Russia.
Another way of putting it is that even thirty five years from now, the average Indian will earn just Rs 5,000 a month. On this income he will have to feed and educate his children, look after their healthcare needs, afford entertainment and life insurance.
This means he must have a place to stay with clean water supply at, say, Rs 200 per month , uninterrupted electric power, perhaps at 50 paise per unit at the consumer level, medical insurance at, say, Rs 10 per person per month and life insurance perhaps at Rs 5 per person per month.
Are you one of those people who think of big cities as little more than hotbeds of pollution, crime and social inequalities? Well, think again. A new report in this week’s Proceedings of the National Academy of Sciences USA confirms what many city dwellers, who account for the bulk of people on Earth, have claimed for years: Cities have an almost magical ability, spurred by increased human interaction, to stimulate innovation and increase wealth.
The report also pooh-poohs the popular comparison of the growth of cities with biological organisms. An animal slows as it balloons in size ; in contrast, the researchers note, cities speed up as population and everything from crime to per capita income grow.
The New York Times writes:
Even as American educators seek to emulate Asian pedagogy a test-centered ethos and a rigorous focus on math, science and engineering Chinese educators are trying to blend a Western emphasis on critical thinking, versatility and leadership into their own traditions. To put it another way, in the peremptorily utopian style typical of official Chinese directives (as well as of educationese the world over), the nations schools must strive to build citizens character in an all-round way, gear their efforts to each and every student, give full scope to students ideological, moral, cultural and scientific potentials and raise their labor skills and physical and psychological aptitudes, achieve vibrant student development and run themselves with distinction. Meijies rise to star student reflects a much-publicized government call to promote suzhi jiaoyu generally translated as quality education, and also sometimes as character education or all-round character education. Her story also raises important questions about the states effort, which has been more generously backed by rhetoric than by money. The goal of change is to liberate students to pursue more fulfilling paths in a country where jobs are no longer assigned; it is also to produce the sort of flexibly skilled work force that best fits an international knowledge economy. But can personal desires and national demands be reconciled? Will the most promising students of the new era be as overburdened and regimented as before? As new opportunities have begun to emerge, so have tensions. If Meijies own trajectory and her Hsylc brainchild are any guide, the force most likely to spur on deep-seated educational ferment in China may well turn out to be students themselves still struggling with stress, yet doing so in an era of greater personal independence and international openness. Overachievers of the world unite!
The Economist writes:
A more potent story that is only just starting to be articulated is that China is going out to the world. Indeed, China is risingsome say has already risento become the newest great power. Do not yet think of it as a global one. Even if commercial and diplomatic tentacles stretch increasingly round the world, the main site of China’s power, for decades to come, will be in its Asian backyard.
In a forthcoming book about China, David Lampton of the School of Advanced International Studies at Johns Hopkins University argues that nations define and achieve their goals using three means: coercion, material inducement or intellectual motivation. Put more bluntly, that means guns, money and ideas. How China blends the three, and how the rest of the world perceives the process, will more than anything shape the future course of Asia and beyond.
India Knowledge@Wharton writes:
With the relaxation of the country’s foreign direct investment (FDI) rules, publications as diverse as Newsweek, Fortune, Time Out, Men’s Health and Auto Car have set up Indian operations in recent months. The Conde Nast group has come in through a 100% privately held subsidiary, and will launch its flagship Vogue next year. On the newspaper front, there is now company for the International Herald Tribune, which had come in two years ago to launch an identical locally printed version of its international edition (called a “facsimile edition”). The Independent of the U.K. tied up with Dainik Jagran, a leading Hindi-language newspaper publisher. These are just some of the new arrivals.
Why this sudden interest in Indian print media?
First, in contrast to the West, where in recent years the print media have been left bloodied by declining circulation and staff layoffs, India is adding millions of readers. The National Readership Survey 2006, an annual review by an autonomous division of the Audit Bureau of Circulations, said the entire Indian press had added seven million new readers in the year leading up to June 2006. The number of readers of dailies and magazines grew from 212 million to 216 million in the three years leading up to June 2006. The survey did not cover the string of niche titles that are regularly launched and whose collective readership estimates are unlisted, but considered sizeable. “There is still significant scope for growth, as 359 million people who can read and understand any language do not read any publication,” the report stated.