TECH TALK: As India Develops: Information Access

Information abounds around us, but if it is not available at the right time to support decision-making, then its value is limited. The Internet helped bring ease the distribution of information globally. In India, too, we have benefited significantly over the past decade. But a lot more needs to be done to take the benefits of information access to larger numbers across India. The need is to leapfrog from the request-reply (1-way) web to the publish-subscribe (2-way web).

Before we look at how we can build the next-generation information platform and reach out across urban and rural India, let us take a look at how the Internet has had an impact in China, so much so that Chinese will make up the largest user base by 2006. Wrote Business Week in a recent cover story in its Asian edition:

The expanding audience has set off a building spurt in recent months reminiscent of Silicon Valley in the late 1990s. Local businesses such as Kingsoft are moving onto the Net, staking a claim to the rich opportunities ahead. Foreign Web companies, including Yahoo! Inc. and eBay Inc., are making acquisitions to expand their operations in the country. And entrepreneurs from around the world are opening shop on China’s Net. They range from Peggy Yu, a 38-year-old MBA from New York University who runs what she hopes will be the Inc. of China, to Li Ka-shing, the Hong Kong billionaire whose Internet portal, Tom Online Inc., expects to raise as much as $200 million in an initial public offering scheduled for this month.

Investors are just as gung ho about the market. Sina Corp., the largest Net portal in China, has seen its shares surge eightfold over the past year, to $45. After the strong IPO of travel site in December, numerous companies, like Tom Online, are lining up to sell stock to a hungry public. One of the hottest prospects? Shanda Networking Development Co., a Shanghai online gambling outfit that is expected to raise as much as $200 million in an IPO scheduled for later this year. Even venture capitalists are getting bolder. In February, business-to-business auction site landed $82 million from Fidelity Investments, Softbank, and other venture players — the largest VC investment in a Chinese dot-com ever.

Yet, China is playing catch-up in many Net markets. E-commerce, for example, has been slow to develop in China because so few people have credit cards and the postal service isn’t reliable. But Peggy Yu is starting to make progress with, a distinctly Chinese version of Amazon. Dangdang began letting would-be buyers pay with money orders and even old-fashioned cash on delivery. To get packages to customers, Dangdang hired a fleet of delivery boys who zip around China’s biggest cities on bicycles. Yu says more than 2 million customers have bought books, CDs, and DVDs from Dangdang, with an average order of about $10. “We have figured out the basics,” she says.

So have business-to-business Net companies. At Alibaba, CEO Ma had to win over manufacturers worried about fraud when doing business with strangers over the Net. To help customers get up the Internet learning curve, Alibaba sends representatives to the factory floors of each new manufacturer to explain how the site works. Ma says more than 1 million companies have signed up to be listed on Alibaba’s import-export site. What attracted the record-breaking VC investment is Alibaba’s potential: Companies from around the world can request bids from Chinese manufacturers for thousands of products from cookware to washing machines. Purchasers don’t need a representative in China to buy directly from the manufacturers that often have the lowest costs in the world.

Indian Internet portals have stagnated over the years partly due to a lack of investment in the space, and also because the slow growth is the user base limited the advertising money that the portals could count upon as revenues. The Chinese portals were helped by the boom in mobile phones and online gaming. Neither of this has not yet happened in India. And yet, the need for useful information exists. In the absence of centralised portals creating the information, can we create a distributed, emergent platform to pool together what we all know?

Tomorrow: Information Access (continued)

TECH TALK As India Develops+T

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Rajesh Jain

An Entrepreneur based in Mumbai, India.