Author: Rajesh Jain

The Internet and e-Business seem to go hand-in-hand
nowadays. Companies want to know how the Internet can be leveraged for
business, just as their counterparts in the US seem to be using
it. This column explores five key trends which provide the background
for enabling e-Business in the Internet Age.

The Death of Distance

In a landmark Economist survey a few years ago, the author talked
about how geography was becoming irrelevant in telecom. The Net is
making this more so. While voice telephony itself has not much
affected much so far in India, email has made it so much more
convenient to keep in touch and conduct business with customers
worldwide. Internet telephony will speed this process, and will be
beyond regulators. The Net cuts through barriers imposed by space and
time. Businesses in India have to brace up for competition from
everywhere. At the same time, it opens up opportunities for Indian
companies to do business internationally. The world is becoming more
of a village, than ever before.

The Exchange Economy

A recent article in Fortune magazine talks about “infomediaries”,
online exchanges that link buyers and sellers by effectively
distributing market information. It says that infomediaries are a
cross between electronic catalogs, efficient marketplaces that greatly
reduce transaction costs, and content libraries, which help companies
make purchasing decisions. This trend will impact many businesses in
India, as the Net becomes the electronic meeting and trading
place. The combination of content, communications, community and
commerce is the foundation on which an infomediary will be built. This
is a big opportunity area in India: set up infomediaries for vertical
segments.

The Net as your Intranet

In India, as I have mentioned in earlier columns, the killer
application for corporates is e-mail. Limitations on wide area
bandwidth and high costs will make it easier for companies to
interconnect their offices in different locations via the Internet
than through their own network. The Net effectively becomes the
corporate Intranet server, seamlessly merging internal and external
information. Just as portals like Yahoo and Excite offer utility
services like email, chat and calendaring, companies will use these
services within their organisation, but served off the Internet. This
will allow access anytime and from anywhere. All that will be required
is a Web browser on the desktop.

The Powerful Consumer

As information dissemination via the Net becomes easier, more
companies will put up greater information on the Net. The result:
power to the consumer, who will easily compare product/service
features of competing products. One area where this is already
happening is banking, where sites offer comparisons of interest rates
offered from different banks on a single page! There will be an
increase in such comparator sites in India. Combined with the other
trends, it means that the future battles will be based on price and
service, not physical proximity to the customer.

Content meets Distribution

An interesting point was made by management guru CK Prahalad at a
seminar recently. India’s telephone connections may be 15-20 million,
but access to telephony is higher by a factor of 20-30, if not
more. PCOs have succeeded in taking telephony to the masses. Similarly
for the Internet. While abroad the ratio is nearly 1:1 between access
and connections, in India the access multiplier can become as high as
100 if we can set up a network of Internet kiosks (or community
centres) across the country. Cybercafes are the first generation
kiosks. They make Net access available without the need for a PC at
home or in the office. Building up a grassroots distribution system
via a network of kiosks (with, perhaps, a smart card payment system, a
regional-language browser and local content) will make Net access near
ubiquitous across the country within the next 5 years. What is
required: e-Services.

The Internet will have a much bigger impact on India than we can
imagine. We have to create our own business models; just trying to
replicate business models from the US is not the answer. And that is
where the opportunities of tomorrow lie.

The Internet is the flavour of the day. Is your company
Internet-ready? Take this quiz and find out. Score 1 point for every
Yes answer.

E-mail

E-mail is the killer application in today’s context on the
Internet. Email can and should be made critical to your
business. Email does not work if half your company has it, and the
other half doesn’t. If you can use email well, you will find that you
are not only able to communicate better and faster, but that your
communications costs will come down.

1. Do you have an email address of the form name@companyname.com or
name@companyname.co.in?
2. Is your email delivered to your desktop when you are in office?
3. Do you reply to your email personally (i.e., it is not printed
out by your secretary, marked up by you, and replied by your secretary?)
4. When you are out of the office, can you access your email anytime and from anywhere?
5. At all times, wherever you are, does your e-mail address remain the same?
6. Does the e-mail account for every person in the company satisfy the above
conditions, irrespective of their office location?
7. Are your email costs independent of the number of messages and the size of
the messages?

Internet Access

The Internet is today the primary source of news and business
information. Internet access is important for having people exposed to
new ideas and developments. For example, your marketing department can
use it source customers in international markets by visiting their
websites and writing to them.

8. Do all employees in your office have Internet Access from their desktops?
9. Can you monitor the sites people access, i.e., is the access through a Proxy Server?

Website

The website is your public face to the world. It is like being able to
publish your own newspaper. Think of it as being your global
office. Give it as much importance.

10. Does your company have a website?
11. Is the URL of the site independent of the service provider?
12. Was it updated in the past 2 weeks?
13. Do you have the latest developments on your company (e.g. financials,
press releases, new products) on the website?
14. Do you a Webmaster internally co-ordinating the website and its updates?
15. If an inquiry were to come through the website, would the
sender receive a reply within one business day?
16. Do you keep a database of the email addresses that came in via theseinquiries?
17. Does all your promotional material (business cards, letterheads,
brochures, ads) carry the website address?

Intranet/Extranet/E-Commerce

The Net can help you communicate better with your own employees, and a
closed user group (the companies/agencies you deal with on a regular
basis). Business-to-business and business-to-consumer electronic
commerce are rapidly reshaping entire industries in the West. Expect
the same to happen in India — faster than you can imagine. The Net
cuts across geographical barriers — meaning that companies from
anywhere can sell to your clients. It also means that you can sell to
their clients.

18. Do you have an Intranet for your employees?
19. Do you have an Extranet for your customers?
20. Do you have a strategy to sell / do business via the Net?

Scoring

Recently, I visited the Gujarat Co-operative Milk Marketing
Federation (GCMMF) in Anand. About 45 minutes drive from Baroda, Anand
is the unlikely place for the headquarters of India’s largest foods
brand. However, rightfully so, because this was the place where the
milk revolution in India started some fifty years back. The
cooperative revolution which has made India the largest producer of
milk in the world today.

When I began my presentation to Amul’s top executives on the Internet
in Anand, I was told by Mr BM Vyas, GCMMF’s managing director, “Amul
is not a food company. It is an IT company in the food business.”
Amul’s 15-word vision for the future ends with the phrase “information
technology integration.” Internet access was available right through
the presentation (via a VSAT through NIC’s network). The presentation
I had sent via email the previous night had already been set up by the
time I arrived. I have had a harder time in board rooms in South
Mumbai making Internet-based presentations!

But then, that is Amul. Always the
one to look ahead, leveraging IT. An epitome of the Networked Economy,
where distance is irrelevant. Each one of Amul’s 40+ offices has email
connectivity and sends daily reports on sales and inventory to Anand
on the backbone of an ERP system. Over the past five decades, Amul has
engineered a revolution in the foods business and created one of
India’s most trusted brands. To understand the impact the Internet can
have, it is interesting to examine what Amul has done with it over the
past two-and-a-half years. To see the future of the Internet in India,
it is important to understand how the Internet can improve the lives
of the farmers, the first rung in Amul’s chain of food production and
distribution.

March 1996: I got a call from Anand, saying that Amul wanted
to put its topical on IndiaWorld. The Cricket World Cup was on, and
Amul wanted its hoarding on the Internet also. Amul wanted a 6-month
advertising contract. A year earlier, we had set up IndiaWorld. We
were just getting used to selling ads for a week or a month. And here,
we were being asked to quote for a 6-month period! Within 3 hours, the
rate was finalised, and the next day, just in time for the semi-final,
Amul’s “Little Moppet” topical was up on the Internet on IndiaWorld’s
hope page. It has stayed there since.

The response that the topicals evoked was extraordinary. Emails came
in from all over, as people commented on the topicals and Amul. The
topicals have always struck a chord, and now suddenly, geography knew
no barriers. For Amul, it was first-hand feedback — within minutes of
the topical going up. An outdoor hoarding may evoke a wry smile, but
it is not interactive: how do you write to Amul? The email became the
link.

Amul’s home page (one of the first
five among Indian corporates) began by talking about the Amul Story
and the history of its topicals. Over the next few months, topicals
from previous years and recipes were added. Amul also become the first
company to have its web address regularly carried as part of its print
ads. Feedback continued to pour in. People wrote about how they grew
up with Amul butter, and how they missed it. Perhaps, Amul had a
bigger market for its products abroad.

August 1998: Amul Surabhi, the programme in Hindi on Indian
culture broadcast on Sunday nights, has completed five years on
national television. Surabhi carries a quiz question at the
end. Answers are normally sent on postcards. Amul announces an email
address where entries can be emailed. The first week sees 120
emails. By the eighth week, the number has climbed to 2600. The first
emails start coming in within minutes of the question being asked! The
convergence of three media: television drives people to dial out to
the Internet. And remember: the programme is in Hindi, and the
computer and the Internet speak English.

September 1998: Amul launches the
Amul World Cricket Rankings in
association with KHEL.COM. The
marriage of India’s finest brand with India’s most popular
sport. Rankings are updated after every match, encouraging people to
write in their comments. The first two weeks have seen over 500 people
writing in, with comments on what makes Amul and the Rankings so
special to them.

Within the next two months, Amul will launch its products in the US
market. Each of its products will not only carry a toll-free number,
but also its web address. The objective is to make it as easy as
possible for the consumer to send in the comments, and have it
redirected to the appropriate product manager.

Another example of the techno-savvy Amul is the commencement of
“Dial in Amul Icecream” service in Ahmedabad since last couple of
weeks. The phone no. is published in an advertisement in leading
dailies. Customer calls up the no. and orders min. Rs 50 worth of Amul
Icecream. Incentives like a Chocobar free on orders upward Rs 100 etc
are also built in. The delivery time is approx 30 minutes as
mentioned in the ad. The Order booking office calls up the area
distributor and informs about the customer order. Delivery boys with a
bike are kept ready at distributor point who get the stocks and rush
for delivery. Cash is collected at time of deliver. In peak hours, it
does take upto an hour but the customer does not complain. The
response has been very good.” Imagine ordering two litres of milk and
one pack of butter in the same way. From anywhere.

In the evening of my Anand visit, I visited a village to actually see
the chain of events which begins with the farmer delivering the milk
to the local milk co-operative society. Milk is delivered twice by a
day by the farmers, payment is collected 12 hours later. The farmer’s
passbook carries the details of the transactions. The record-keeping
is manual and paper-based. A tanker will come later and pick up the
chilled milk, and take to the dairy for processing. Two million milk
producers in 10,000 villages of Gujarat perform this task twice a
day. They collectively own 14 modern dairy plants which handle an
average of four million litres of milk each day. If the Internet has
to revolutionise communications in India, this is where it has to make
a difference.

Can India have 25 million daily Internet users by 2005? Can the
Internet really make a difference to us? We need technologies and
services which can (a) remove pain from people’s lives, and (b)
enhance their quality of life. Unless we can do both, there cannot be
a mass market. Over the coming weeks, we will explore ways and means
by which we can do so, and in the processs, build a Networked India.

As the year ends, we look back at 1997 and ahead to 1998. (Part III
of the IndiaWorld Story will be carried next week).

1997 was the second full year of commercial Internet access in
India. The accounts grew to about 50,000 with 200 leased line
customers. This was the year Indian companies started setting up
websites in full gusto. Cybercafes sprouted up in many cities.
Tariffs for TCP/IP access have come down (starting Jan 1, it will be
as low as Rs 20 per hour). A whole variety of info-oriented websites
have been setup. Early adopters have set up Intranets, with some
Extranets (like NFDC). We have two magazines dedicated to the Indian
Internet (Web Vision and Biznet). Almost all the publishers got on to
the Net bandwagon. All in all, a year of reasonable progress.

The privatisation of the Indian Internet seems as distant as it did a
few months ago. The latest spanner comes from the Elections. It seems
unlikely that the guidelines will be announced by mid-Jan, and
indications are that the delay could be as much as 3-4 months. But,
what is clear is that by early 1998, there will be at least 3 ISPs:
VSNL, DoT and MTNL. While VSNL will continue to offer its services in
the major cities, DoT is likely to extend its reach into the
second-tier cities and MTNL will concentrate on Mumbai and Delhi.
With many companies waiting in the wings to come ISPs, 1998 will be
the year of significant Internet growth in India.

Companies are just starting to look at building Web-based
applications. This trend will accelerate during 1998. The next year
will also see the first forays into electronic commerce. ICICI Bank
has launched its Internet Banking service recently, and other banks
are likely to follow. Expect merchants to start selling, and
electronic payment mechanisms to be available.

For many websites, I expect 1998 to be the year when domestic traffic
exceeds international traffic. This is very important, since without a
reasonable local audience, Indian websites cannot survive financially.
Once you have a hundred thousand people accessing the Net regularly,
advertisers are bound to notice, and this will further speed up the
growth of the medium.

The defining moment of the Indian Internet in 1998 is likely to come
during the Indian elections: while TV will provide live coverage, I
expect the Internet to become an important alternate “channel”, and
one which people can customise. Try figuring out who is leading in
your constituency. Do you wait for TV to tell you in a few hours, or
do you hit the Net?

IndiaWorld was launched on March 13, 1995, and in the past two
years, has grown to be India’s largest and most heavily accessed
family of websites, including IndiaLine. In a recent
survey
(as part of an opinion poll on the Most Important Indians of the 20th
century), over half of the people named one of the IndiaWorld sites as
their favourite website.

Here is a first-hand account of how IndiaWorld has grown to become
India’s premier website from Rajesh Jain.

The IndiaWorld story begins in September 1994. I was in the US, trying
to figure out a good business to do in an area other than software
exports. It was the time when the Internet and Web were just about
beginning to catch people’s fancies. I spent a few weeks at a friend’s
place, browsing the Web on a 14.4 Kbps dial-up modem with Netcom’s
Netcruiser account. The experience was absolutely amazing. It was
quite evident then that the Web as a medium would have a significant
impact on how information was disseminated. The Web offered a good
business opportunity: attract the NRIs (I was one myself!) with good
intent, and then look at offshoots in electronic commerce.

That was the vision of IndiaWorld: a bridge between Indians
worldwide. To quote from our introductory document:

Our mission is to create an electronic information services
organisation, with a focus on emerging markets. IndiaWorld is the
first step in this direction. We intend to leverage the Internet as a
global distribution medium, and build a platform for electronic
publishing and commerce. In doing so, we hope to bridge the
information gap and enable commerce initially between users in the
developed economies and suppliers in the emerging markets, and later
between the suppliers in the developed countries and users in the
emerging markets.

The changes which have brought India to the forefront of the world
economy are momentous and irreversible. Interest in India is
increasing. And yet, information on India — its business, culture and
people — is not easily available. The Internet is the distribution
medium which makes possible rapid access to information. Anytime. And
from Anywhere. We are riding on this network, with a focus on
digitised content on India.

We see Indians (living inside and outside India) interconnected
together, with each other and with business partners. IndiaWorld is
the bridge. Geography is today increasingly becoming irrelevant in
doing business. We are building upon the rich past of India, and the
vibrant present, and looking forward to a connected future. Connected
via IndiaWorld.

On my return to India in November 1994, I wrote to various publishers
and talked to a number of companies and individuals to participate in
the venture by offering their content. It was tough explaining the
Internet and the Web to people in India then: there was no commercial
Internet access provider (our “shell” account was through
NCST/ERNET). Most thought the Internet to be another variation of a
satellite channel! I would take a notebook with NCSA Mosaic, and show
them the power of hyperlinks. It wasn’t quite clear how it would make
an impact on businesses, but yes, it was going to transform how NRIs
got their information.

Our focus was on IndiaWorld as a news and information service for
NRIs. With help (and content) from Indian Express, India Today,
Dataquest, Reader’s Digest, Kensource, Crisil, CMIE, DSP Financial,
Professional Management Group and Laxman, IndiaWorld was formally
launched from a server in the US on March 13, 1995. Emails were sent
out to friends, postings were made in newsgroups, and we anxiously
waited for people to start accessing the site. As the emails started
pouring in, we knew we were on to a winner here. One smart thing we
had done was to ensure quite a lot of archived content: this way, when
people came in, they had plenty to see. (Imagine suddenly having 30
Laxman cartoons to browse!) This way we knew the people would come back.

Right from the beginning, our focus was on daily updates (it is quite
astonishing how few Indian sites update daily). This simple philosophy
of offering something of value every day ensured very good repeat
traffic. We spent a lot of time creating a daily newspaper (India
Daily, which continues even now), and news headlines from the Indian
media, updated twice daily.

Two days after launch, we covered the Union Budget live. We had a
group of analysts and journalists watch the TV in one room and give
their comments. In another room, we’d type it all up and put on the
website — with a direct dialled ISD call (since the ERNET US link
chose just that moment to go down!). The bill for 2 hours came to
about Rs 8,000 (with umpteen number of disconnects). But, once again,
the feedback received convinced us we had done the right thing.

While we were very keen to charge a subscription fee for sections of
IndiaWorld (we started at USD 49, then dropped it to USD 29, then to
USD 20 for a year, and then in November 1996 dropped it
altogether). This was a flawed model and it probably helped drive some
people away. But we saw it as an extremely useful service (“it works
out to Rs 2 a day, what you would pay for a newspaper in India!”). In
18 months, IndiaWorld had about 5,000 subscribers. More interestingly,
a figure three times larger accessed the top page and the Headlines
page!

In those initial days, IndiaWorld touched off something of a chord
among people. The word-of-mouth was extremely positive, and other than
one ad in India Today International in May 1995, we have never
advertised on any medium. If we could not make a business successful
through the Web, there was no way we could help help others to do the
same.

The first few weeks of IndiaWorld taught us many things, which till
today serve as the core principles on which IndiaWorld runs:

• Update Daily or more often: ensure that you can get your audience
  every day. Many people worldwide begin their day by first checking out
  IndiaWorld

• Cover prominent events live. Over the past 30 months, IndiaWorld
  has covered three budgets, the 96 elections and over 100 cricket
  matches live, besides a dozen QA sessions.

• Answer emails that come in quickly. Email is our only link to
  readers. We do try and reply to every message which comes in (we get
  over a hundred daily). But it is these messages which have served as
  the source for new ideas.

To be continued next week