i nternet .i n .i ndia m i l l e n n i u m e d i t i o n
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I nternet .I n .I ndia M i l l e n n i u m E d i t i o n What do we know about the online consumer ?. The Indian market - a multi-hued patch. National Demographics 74% population rural - across 6,00,000 villages 26% urban - 3768 towns Urban Demographics - PowerPoint PPT PresentationTRANSCRIPT
eTechnology Group @ IMRB Internet.In.India 2000
IInternetnternet.I.Inn.I.Indndiaia M i l l e n n i u m E d i t i o n
What do we know about
the online consumer ?
eTechnology Group @ IMRB Internet.In.India 2000
The Indian market - a multi-hued patch
National Demographics
– 74% population rural - across 6,00,000 villages
– 26% urban - 3768 towns
Urban Demographics
– 8% of urban towns account for 65% of urban population
– half the population of top 300 towns in top 23
Home market
– 53 million HH
– 16 million in SECA+B
– 5.8 million SEC A+B in top 16 cities
eTechnology Group @ IMRB Internet.In.India 2000
The glamorous home market PCs & internet still low down in penetration
– Television : 100%
– Refrigerator : 81%
– Cable : 80%
– Telephone : 70%
– Scooter/Mobike ; 54%
– Washing M/C : 42%
– Audio System : 21%
– Computers : 14%
– Cell phone : 9%
– A/C : 8%
– Internet : 7%
– Microwave oven : 4%
eTechnology Group @ IMRB Internet.In.India 2000
Rapid growth in penetration last one year
Cable : 77% to 80%
Telephone : 50% to 70%
Audi Systems : 9% to 21%
Cell phones : 2% to 9%
Credit Cards : 11% to 14%
Computers : 7.8% to 14%
Internet : 2.2% to 7%
eTechnology Group @ IMRB Internet.In.India 2000
Business market
Target - telephone owning businesses
– 1.24 million in top 16 cities
Higher penetration of IT
– PCs : 52%
– Server : 15%
– Printer : 50%
– Internet : 28%
Significant growth over last one year
– PCs : 48% to 52%
– Internet : 20% to 28%
eTechnology Group @ IMRB Internet.In.India 2000
Internet : Connections vs. subscribers
Homes– 490,000 subscribers
– 580,000 connections
– average 1.2
Businesses– 414,000 subscribers
– 580,000 connections
– average 1.4
Overall – 904,000 subscribers
– 1,160,000 connections
– average 1.28
eTechnology Group @ IMRB Internet.In.India 2000
All India PC base & Internet Connections
PC Market Internet Market
Busi-ness41%
Home59%
Busi-ness84%
Home16%
1.6 million owners of PCs...
…own 6.3 million units
Busi -ness46%
Home54%
Busi-ness50%
Home50%
0.9 million subscriber...
…have 1.2 million connections
eTechnology Group @ IMRB Internet.In.India 2000
Next 2 Metros
12%
Top 2 Metros
50%
Other 1 Mill+cities
13%
Rest of India7%
Other 4 Metros
18%
Internet connections by town class
eTechnology Group @ IMRB Internet.In.India 2000
Defining the individual users
Claimed user
– anyone who claimed to have used
Active user
– accessed in last 3 months
– at least 0.5 hrs per week/2 hrs a month
– for purpose other than just e-mail
eTechnology Group @ IMRB Internet.In.India 2000
Past trends in Internet connection
Source: VSNL Annual reports & IMRB Analysis
End of year PC owners PCsowned
Internetsubs-criber
Internetconnections
Averageconnectio
n/entity
% PCowners with
Internetconnection
Ratio ofBusiness
Ratio ofbusiness
connection
March 1997 543,584 2,245,098 25,000 25,000 1.00 5% 92% 92% March 1998 767,760 3,044,156 150,000 150,000 1.00 20% 83% 83% March 1999 1,017,622 4,071,346 350,000 360,000 1.03 34% 64% 65% March 2000 1,380,018 5,476,637 651,000 800,000 1.23 47% 51% 56% August 2000* 1,647,784 6,268,304 904,000 1,160,000 1.28 55% 46% 50%
eTechnology Group @ IMRB Internet.In.India 2000
Claimed User Universe3.16 million
Accessed Internet in the last 3 months
1.43 million
Active users1.38 million
44% of Claimed users
Total Urban population ~ 250 million
Claim to know computers~16 million (6.3%)
Claimed to have used Internet~5 million (2%)
Actively use the Internet~2.2 million (0.9%)
Top 16 cities Urban India
eTechnology Group @ IMRB Internet.In.India 2000
Profile of Active User It is the youth
– 34% 18-23 yrs
– 35% 24-35 yrs
Predominantly Male
– 75%
Single
– 64%
Educated
– 45% Graduate/PG - General
– 21% PG Professional
Students & executives
– 40% students
– 21% officer/executive
SEC A dominates
– 60%
eTechnology Group @ IMRB Internet.In.India 2000
What the Internet is used for?
Information36%
Ecommerce1%
Email40%
Chat15%
Entertainment8%
Total hour spent ~5.3 hrs/week
eTechnology Group @ IMRB Internet.In.India 2000
Internet subscriber forecast
1,184
2,185
4,031
7,258
1,650
3,000
5,200
8,500
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2000-01 2001-02 2002-03 2003-04
Year
Uni
ts (
'000
s)
Subscribers
Connections
eTechnology Group @ IMRB Internet.In.India 2000
Internet subscriber market segment forecast
Internet subscribers- share of home & business
17%
36%49%
61%72%
80% 86%
83%
64%51%
39%28%
20% 14%
0%
20%
40%
60%
80%
100%
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04
Year
Un
its
('00
0s)
Business
Home
eTechnology Group @ IMRB Internet.In.India 2000
Internet user base forecast
3.25.6
10.1
17.8
7.1
12.5
22.4
39.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2000-01 2001-02 2002-03 2003-04
Year
Active user
Claimed user
Persons (in millions)
eTechnology Group @ IMRB Internet.In.India 2000
Vortals...
…consolidate interest groups!
eTechnology Group @ IMRB Internet.In.India 2000
It’s all to do with demographics...
Usage reflects demographic characteristics of users on the web!
Category Vortals ever used (%active users)Education EGurucool (16%), Batchmates & Vidyalaya (7-8%)Sports Cricinfo (28%), Cricketnext, Khel & WWF (11%)Career Jobsahead (24%) & Naukri (21%)Ecards Yahoo, Bluemountain & 123India (13-16%)Business Yahoo (18%) & Rediff (4%)Music Saregama (11%), Hindimusic, Musicurry, Nazara (8%)Technology ITSpace (15%), Yahoo (11%)News TimesofIndia (16%) & Indiatimes (11%)Youth Hungama (20%), Contest2win (10%)Home Shopping Rediff (12%)
eTechnology Group @ IMRB Internet.In.India 2000
Prognosis...
Sites focussed on Youngsters will survive: Will see consolidation (2-3 per category)
Women sites: Will continue to be bogged down by lower no. of women on the net
Personal Finance, Auction & Travel sites: Smaller % within demographics with interest - need to focus & monetise these eyeballs. Need to embrace WAP/GPRS market
Auction sites: Face problems associated with Ecommerce sites
Scope for regional sites exist
eTechnology Group @ IMRB Internet.In.India 2000
Potential Consumer Value (PCV) High Low
P
ote
nti
al
Tra
nsa
cti
on
Val
ue
(P
TV
)
Lo
w
H
igh
Value Matrix for Vortals...
Four decision options depending on where the category falls
Organise
&
Service
Get critcial & Increase transaction value per customer
HyperlinkAlign & aggregate
eTechnology Group @ IMRB Internet.In.India 2000
Potential Consumer Value (PCV) High Low
Home Shopping PersonalFinance
AuctionsEducation Automobiles
Sports Music Travel
P
ote
nti
al
Tra
nsa
cti
o
n V
alu
e (
PT
V)
Lo
w
H
igh
Youth/ Fun E-cards
Matrimonial Art/Culture Women
Jobs/careers
Movies
Computer games
Technology
News
AstrologyEntertainment
Contests/promotions
Where the categories fall...
Jobs/career & education are the main categories in short run
eTechnology Group @ IMRB Internet.In.India 2000
Potential Consumer Value (PCV) High Low
P
ote
nti
al
Tra
nsa
cti
on
Val
ue
(P
TV
)
Lo
w
H
igh
Future migration potential...
Vortals need to study the movement & change tactics as they move along
Movies
Women
Music
Personal Finance
Home shopping
Travel
Women
Movies
Music
Personal Finance
Travel
Home shopping
eTechnology Group @ IMRB Internet.In.India 2000
Ecommerce...
…the road to salvation!
eTechnology Group @ IMRB Internet.In.India 2000
Not Looked for information (Non-LFIs)
Base: Active users in top 16 cities
Looked for information (LFIs)
Shoppers
Current scenario...
About 65,000 buyers in year ending Aug’00
Valued at Rs.25-28 crores
3%
24%
73%
eTechnology Group @ IMRB Internet.In.India 2000
Products looked for info & bought...
Bought:
– Books/Music ~40-45% of buyers
– Computer Hw/sw ~30% of buyers
– Tickets/electronics ~17-19% of buyers
– Garments/fitness eqpt ~10-12%
3%
3%
3%
4%
4%
4%
4%
6%
8%
12%
12%
Tour Plan / Hotel
Gifts/Novelty Items
Garments
NewCar/Motorcycle
Home Appliances
Sports Goods
Train / Air Tickets
Home Electronics
ComputerHardware/Software
MusicCassettes/CDs
Books
% a
cti
ve
us
ers
loo
ked
fo
r in
fo:
eTechnology Group @ IMRB Internet.In.India 2000
Barriers to growth...
Three key reasons stated by customers:
“Not sure of quality”
“Cannot bargain/negotiate”
“Security/Credit card misuse”
Poor branding (here, brick-and-mortar have an advantage)
Poor service & logistics
eTechnology Group @ IMRB Internet.In.India 2000
Overcoming these barriers...
Emphasise on key benefits:
“Convenience”
“Compare products/seek information”
“Interesting offers”
“Security in transaction
Need to improve user experience to grow the market - Know product & plan accordingly
Educate Inform Compare Transact
eTechnology Group @ IMRB Internet.In.India 2000
Future market for B2C ecommerce...
Potential for 400,000 shoppers with possible revenue of Rs. 300 crores in the next one year
Ranking by % BuyersMusic Cassettes/CDs 21%Books 21%Computer Hw/Sw 16%Train/Air Tickets 13%Home Electronics 12%Home Appliances 9%Garments 8%Tour Plan/Hotel 8%
Ranking by % revenueNew vehicles 36%Computer Hw/sw 16%Home appliances 9%Home electronics 8%Used vehicles 7%Tours Plan/Hotel 5%Loans/Finance 5%Train/Air Ticket 3%
Realisation will depend on market activity by players
eTechnology Group @ IMRB Internet.In.India 2000
Main conclusions...
eTechnology Group @ IMRB Internet.In.India 2000
Need to work keeping customer demographics...
Horizontal Portals need to use “benefits hierarchy” to lump customers & use that to monetise:
– advt & direct marketing revenue, and
– sell customers value added services
Vortals & ecommerce sites need to increase focus on selling “Bits” to net customers first…
– Jobs, Education, directory services etc.
– Work on improving user experience & trust
eTechnology Group @ IMRB Internet.In.India 2000
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