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If you had to listen to the mass media advocates,
you would be convinced that TV isn't
going anywhere, in a hurry. The 30 second
commercial is alive and kicking. On the other
hand, spend some time with the new media
advocates and they will convince you that
ignoring the World Wide Web would be doing
so at your own peril. It is all about perspective
and this week, we got to hear the digital
media experts hold forth on the trends and
opportunities that the new digital age has in
store, at the recently concluded Internet and
Mobile Association of India (IAMAI) Digital
summit held in Mumbai last week.
The summit, which stretched over two days
had speakers debating about the potential
and challenges that lay ahead of the digital
world, the retail opportunities that such a
medium affords to marketers, the business
potential that can be exploited through
broadband and why the digital medium is still
not getting the credit that it deserves. The discussion,
in fact, threw up some interesting
points about e-commerce in India.
Travel is, by far the largest driver of growth for
e-commerce in India today, accounting for
close to 70 percent of all online transactions.
This has happened due to the price variability
in the travel segment, given the number of
low cost options in air travel, making it possible
for middle class India to consider air travel
as an affordable option.
In the first session, Rajesh Sawhney,
President, Reliance, Entertainment elaborated
on the key content drivers of digital entertainment,
namely movies and music, sex and
gambling and sports and gaming. He added
that digital entertainment is becoming user
generated.
Arvind Rao, CEO & Co-founder, Onmobile
Asia Pacific, predicted that media portals
would be the next step forward for media
owners.
Dayanidhi Maran, Minister for
Communications & Information Technology
in his inaugural address at the summit said
that the creation of an Indian language
browser was something that he has been
looking forward to for sometime now. "We are
looking at encouraging server farms with
international standards, through which even
rural India could avail of the benefits of the
internet, by centralizing services like getting a
birth certificate etc," said Maran.
Ajit Balakrishnan, MD & CEO, Rediff.com
pointed out Bollywood was not the great salvation
that many operators believed it to be.
Comparing revenues, Balakrishnan pointed
out that the total revenue from e-commerce
far outstripped that of Bollywood. But e-commerce
in India suffered from a set of problems
ranging from security issues of transacting on
the net, to internet speeds and language
issues.
Sanjeev Bikchandani, CEO, Naukri.com
brought out the important point that the single
issue affecting the growth of internet in
India was the language barrier. His grouse
was that the digital medium was still serving
the needs only of the SEC A and B in metros
and larger towns and that only developing
multi lingual portals would make an impact
on any further growth in the internet industry.
He pointed out that the current numbers
had barely scratched the surface of the internet's
potential in India. Local language content
would drive growth in the future since
English was not the preferred language for
the majority of Indians in the country, today.
Sanjay Trehan, Head, Broadband, Times
Internet felt that compelling content and
localization would be key for further growth.
Trehan was dismissive of the internet speeds
available in India today, as he pointed out that
in developed countries, higher internet speeds
had spurred demand and increased usage.
Minimum internet speeds vary from 10MBps
in Korea to 100 MBps in Japan and 1 GBps in
Sweden. India, on the other hand has a lowly
speed of 256 KBps.
Balakrishnan of Rediff however refuted the
need for higher speeds in a country like India,
where email was still the most practiced popular
activity online. He pointed out that the
larger issues in a country like India would be
to address the importance of always being
online. Madhivanan B, GM, Retail Assets
Products Group, ICICI, felt that security
issues were the prime reason for people not
having graduated to banking on the net and
that once such issues were addressed, it
would take off in the same way that ATMs
have done.
Lav Gupta, Deputy Director General,
Broadband, BSNL, asked the gathered audience
what justified the investments being
made in the broadband area in the country,
today. He explained that what was happening
was the fact that worldwide, telecom companies'
profits relating to voice were shrinking
and newer revenue streams were required. A
converged network, offering voice, data and
video were necessary and this explained the
hurry to put the required infrastructure in
place. Gupta estimated that if everything fell
into place as predicted and the service took
off, we would have approximately 26 million
broadband users by 2008. Once the technology
was in place, the business model would
take off. Investments in broadband then
would promote the use of the internet, drive
up spending on the telecom industry and promote
economic development.
Anupam Mittal, Chairman and CEO, People
Interactive, was of the opinion that customer
segmentation was an important key towards
addressing the complex and fragmented
Indian market. He stressed that there were
four important parameters for evaluating
opportunities in the internet space: type of
content, type of interaction with the content,
latency of content and the delivery of this
content.
The one speaker who probably got the loudest
round of applause and respect was Captain
GR Gopinath, MD, Air Deccan. His speech on
unleashing the power of the internet was
both inspiring and comprehensive as not only
did it give a glimpse into the journey that
inspired him to start the country's first ever
low cost carrier, which in effect, triggered the
travel boom in the country today but it also
brought into focus the importance of the
internet in the tremendous growth seen in
the Indian travel sector. Gopinath revealed
that more than 90 percent of their average
revenue from sale of tickets in a single day
occurs over the internet. However he pointed
out that unless one could deliver the operational
gamut on the internet, it was difficult
to succeed. Gopinath stated that if a company's
internet ticketing system did not work,
the airline wouldn't work either.
He pointed out that a thriving aviation industry
was a key pointer of a robust economy as
smaller cities were connected to the rest of
the country, leading to overall growth.
E-commerce in India is growing by leaps and
bounds. The revenue from e-commerce is
expected to touch Rs 1180 crores in 2005-06.
But e-commerce is still in a relatively nascent
stage, when compared to the business models
abroad. It is surprising therefore, that companies
have not rushed to the internet, to realise
the potential of selling directly to the consumer.
Titan is one of the pioneers in this
regard, which actually retails to consumers
through its website. Globally, Victoria's Secret
enjoys a very high turnover through retailing
on its website, given the privacy options it
affords through transacting on the net.
K. Vaitheeswaran, COO, Fabmall recalled the
time when they were starting up Fabmall and
were discouraged with statements like
'Indians never buy anything off the net..' etc.
Juxtaposing this with today's scenario where
people are not only buying online, they are
also moving into categories that were never
considered popular for online shopping
before, like home appliances and jewellery,
which were considered the domain of the
physical retail stores, given their touch and
feel advantage. He surmised that the gifting
market in India had increased by 300 percent,
thanks to the internet. "Direct consumer