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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

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

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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

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  1. Internet.In.IndiaM i l l e n n i u m E d i t i o n What do we know about the online consumer ? Internet.In.India 2000

  2. 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 Internet.In.India 2000

  3. 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% Internet.In.India 2000

  4. 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% Internet.In.India 2000

  5. 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% Internet.In.India 2000

  6. 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 Internet.In.India 2000

  7. All India PC base & Internet Connections Internet.In.India 2000

  8. Internet connections by town class Internet.In.India 2000

  9. 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 Internet.In.India 2000

  10. Past trends in Internet connection Source: VSNL Annual reports & IMRB Analysis Internet.In.India 2000

  11. 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%) Claimed User Universe 3.16 million Accessed Internet in the last 3 months 1.43 million Active users 1.38 million 44% of Claimed users Top 16 cities Urban India Internet.In.India 2000

  12. 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% Internet.In.India 2000

  13. What the Internet is used for? Ecommerce Entertainment Information Communication Internet.In.India 2000

  14. Internet subscriber forecast Internet.In.India 2000

  15. Internet subscriber market segment forecast Internet.In.India 2000

  16. Internet user base forecast Persons (in millions) Internet.In.India 2000

  17. Vortals... …consolidate interest groups! Internet.In.India 2000

  18. It’s all to do with demographics... • Usage reflects demographic characteristics of users on the web! Internet.In.India 2000

  19. 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 Internet.In.India 2000

  20. Value Matrix for Vortals... • Four decision options depending on where the category falls Get critcial & Increase transaction value per customer Organise & Service Align & aggregate Hyperlink Internet.In.India 2000

  21. Where the categories fall... • Jobs/career & education are the main categories in short run Internet.In.India 2000

  22. Home shopping Home shopping Personal Finance Personal Finance Music Movies Travel Music Travel Movies Women Women Future migration potential... • Vortals need to study the movement & change tactics as they move along Internet.In.India 2000

  23. Ecommerce... …the road to salvation! Internet.In.India 2000

  24. 3% Shoppers 24% Looked for information (LFIs) 73% Not Looked for information (Non-LFIs) Base: Active users in top 16 cities Current scenario... • About 65,000 buyers in year ending Aug’00 • Valued at Rs.25-28 crores Internet.In.India 2000

  25. % active users looked for info: 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% Internet.In.India 2000

  26. 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 Internet.In.India 2000

  27. Compare Transact Educate Inform 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 Internet.In.India 2000

  28. Future market for B2C ecommerce... • Potential for 400,000 shoppers with possible revenue of Rs. 300 crores in the next one year • Realisation will depend on market activity by players Internet.In.India 2000

  29. Main conclusions... Internet.In.India 2000

  30. 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 Internet.In.India 2000

  31. Internet.In.IndiaM i l l e n n i u m E d i t i o n eTechnologyGroup@IMRB Internet.In.India 2000

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