Indian Internet market : Hindu rate of growth Part I

I have just returned invigorated from the Bangalore summit Web Innovation 2007. Will soon update with notes of some sessions that I attended. Will also provide the presentation I made there on social networking.

Meanwhile, herein are my much delayed views on why India's Internet market has been growing slow and what can be done about the same.

The answer is in three parts :

I. Why is the Internet important
II. Why is the Internet user base not growing fast enough in India
III. What can be done to make the Internet base grow (this is the flip side of the question in II above)

This post is about item no. 1.

Why is the Internet important ?
(Don't laugh, there are several shades to this answer. The answer also has some bearing on questions II & III above).

1. Large numbers online (globally currently 1.25 billion are online via PCs alone).

2. Network effects : a potentially viral medium. You can make your idea or product travel through above large number of people faster than is possible through any other medium. Yes, you have to be smart about it.

3. Low cost of going online. And any one can be a publisher. Thus all in all a democratic medium. Gives every one of us access to information, various tools as well as a Voice.

4. Global Encyclopaedia, with well-regarded Big Brother (you know who, first two letters of name start with Go :-) manning the gates to this.

5. Easy Internet access across devices (beginning with mobile phones ) and in remote locations (probably via wireless technology) will boost usage,leading to a virtuous cycle of benefits.

6. Technologies getting popular currently e.g. VOIP, video, RIA etc. will provide many-fold benefits and growth in usage.
The best is yet to come e.g. Vincent Cerf believes that only 99% of the Internet applications have yet to be invented. A universal language translator, online, any one ?

7. New paradigms e.g. Web 2.0, 3.0, Semantic Web and the like makes the Internet grow through its own self-renewal.

8. Hypothesis : The more underpriveleged the Internet user, the greater benefit does the Internet possibly provide to him / her. This does needs an explanation :-)

When I worked at Rediff.com, we did much to understand Indian Internet users, including focus groups with consumers. And the sense I got then was that there is an even greater hunger among, say, young SEC B girls in small towns of U.P. to log on to the Internet than there is among upmarket metro users.

Education,jobs,travel,marriage, the Internet provides it all. The Internet is thus seen by underpriveleged as their passport to break out of immediate constraints of locality, gender and the like and partake of mainstream opportunities.

So the Internet is a tool to address social inequality concerns. And today income inequality in India is a more worrying issue than it is in any other large country. I was at a TIE Summit last week wherein C.K. Prahalad touched on this. He presented data on changes to India's Gini cooefficient ( a tool to measure disparity in incomes) over the years vias-a-vis comparable data for China and U.S. Income disparity is increasing faster here while at the same time our absolute i.e. average income levels are also much lower.

From the above, I would argue that in the long-term in India we have even "more" to gain from the use of the Internet than do China or the U.S.

9. Great impact possible in societal issues. The Net's impact will be even greater in non-business / non-profit concerns affecting us all. The new social media has a role here.More on this big statement in a subsequent post.

I was looking at a reason # 10 to create my own Ten Commandments, couldn't find one, and now will leave you, the esteemed reader of Marketer's Kaleidoscope to take a go :-)

Coming up : Parts II & III regarding "India's Internet market : Hindu rate of growth".