[India] 2 million, 5 million, what's the difference?
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- Subject: [India] 2 million, 5 million, what's the difference?
- From: "Irfan Khan" <KhanIA@super.net.pk>
- Date: Fri, 15 Dec 2000 23:11:52 +0500
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11 Dec 2000 2 million, 5 million, what's the difference? Plenty, say analysts who complain varying estimates of Internet users in India upsets dotcoms' business strategies [NEW DELHI] Discrepancies over the estimated number of Internet users in India is upsetting the business strategy of many a dotcom company, say software industry watchers and analysts. "If you do do not know what your potential market is going to be in terms of numbers, how will you draw up any business plan?" said Vineet Narang, vice president of New Delhi-based FCS Software solutions. Studies by established market research agencies indicate the number could vary anywhere between two and five million. "The discrepancy is because there is no clear definition of the Internet user," said Mohan Krishna, research director with the Indian Market Research Bureau (IMRB). An IMRB survey, which only counts core users -- those who use the internet at least once a week for 30 minutes and for more than just sending an e-mail -- says there are 2.2 million Internet users in India. Another survey by Gartner (India) puts the number at 3.1 million, while a third by NASSCOM, an association of software companies counts 4.8 million. According to IMRB, other studies have counted people who have used the Internet just once in the past three months, which is why their figures are higher. Sometimes, the number of Internet users are also hyped up intentionally -- "just to keep the market going," Mr Krishna said. Clueless However according to Mr Narang, the recent shake-up in the Indian dotcom sector can partly be attributed to people rushing in to launch websites and portals without a clue about who their customers or audiences are. "Most people launched portals thinking they will click. So you had a plethora of portals offering you-name-it services and no or fewer- than-expected takers, making all business plans go awry," Mr Narang said. But even if one resolves the debate of numbers, "the figure of two to five million users is still too small to sustain the number of people launching e-business", said Arvind Mahajan, head of e-business strategy and consulting at Price Waterhouse Coopers. According to Nikhil Nath, who heads a venture capitalist firm in New Delhi, the first mistake made by a number of dotcom companies was thinking that the user base could "sustain a multitude of sites and portals". A number of dotcoms also misjudged the number of people who would use the Internet for services like shopping, Mr Nath said, adding that the credit card base in India was too small to replicate the e- commerce success seen in the US, he said. "I know a lot of people who would like to use the Net for shopping but are afraid of the security aspects." VCs wary All these factors add up to make venture capitalists wary of financing dotcoms which have "no concrete business models and plans based on specific numbers and figures", Mr Nath said. The indications are that venture capitalists will go slow on their investments in Indian dotcom ventures untill Internet becomes available on television. "It could take at least five years, as India will take time to get used to the new medium and shopping without a visit to the markets," said Mr Nath. -- AFP http://business-times.asia1.com.sg/3/fbzit/fbzit19.html