Episode Zwei: In Conversation

I was kinda lambasted by my indian and chinese friends for not really having any meat in my last post. =) Thats cool, do keep the comments coming so I know what you want to read about.

I will highlight several conversations with local Indians here:

With Avnish Bajaj, Chairman Ebay India

  • He defines Web 2.0 as comprising of mainly social networks or other web-based social services where the usage model hinges heavily on users spending a phenomenal amount of time perusing the internet. (think Digg, flickr, blogs…)
  • Asia has 2 divergent paths for Web 2.0 businesses. They will flourish in countries like Japan and Korea where prevailing user habits has much of the web audiences spending phenomenal amounts of time on their broadband accounts. Web 2.0 will have no traction in India and most other Asian countries lacking firstly, access to basic internet infrastructure and secondly, social factors such as usage of internet in their lives.
  • But, Avnish also mentioned there exists high potential for non-social web 2.0 models where the usage of the web service does not depend on user labor (ala Facebook, Digg) He believes a purely advertising-based business model will work in India and can see the potential for that.

My thoughts: Avnish’s answer gave me deja vu. It reminded me of a similar presentation by the VP Marketing of Yahoo! at the Berkeley Play! conference last year. There is a huge disparity of usage patterns between dialup and broadband users many in the Web 2.0 sector in Asia has failed to grasp fully. While Youtube and blog-reading is highly popular in Singapore, it doesn’t necessarily translate to a broad increase in propensity of all web users to peruse other productivity services such as online calendars, event-search engines or travel-based products, even if these might increase daily routine activity efficiency. The broadband penetration in Singapore and much across Southeast Asia is still a niche segment.

With a 14-year old boy outside JW Marriott in Juhu Beach:

  • it was a useless conversation but the boy’s resourcefulness in tapping upon his unfair advantage of being able to speak hindi, gujarati, punjabi in addition to a smattering of english, was another reminder how cloistered youths in Singapore are. We have a lot to learn from the less privileged peoples of developing nations who simply have more hunger and drive to not succeed, but simply survive in the world. When you have nothing to lose, you have everything to gain.

Same goes with this other 12-year old kid in Goa running his own store selling cotton shirts and carpets. I had walked down the street going past multiple stores without buying anything and hHe was trying desperately to get me to buy stuff. While older savvier shopkeepers will play a protracted bargaining game with you while whittling down their margins, this kid had a refreshing approach in offering his lowest first to bait me, the jaded tourist-shopper, into looking at his goods, and i rewarded his observational skills by coughing out some rupees.

A fisherman on Calangute Beach, Goa:

  • 42 years old single male who detested a hectic life in the cities. No ambition, no plan in life.
  • His daily routine comprised mainly of fishing at 5am, selling prawns at 6 rupees each to wholesalers, walking along th beach and settling down at dusk to smoke a joint and enjoy the sounds of the waves till 9pm when he will head back home, watch tv and sleep.

A manager at the beachfront bar on Calangute Beach,

  • Hailed from Uttar Pradesh, in search of riches in Mumbai but got sick of the 24/7 boring routine of serving food at 5-star hotels.
  • Decided to head to the beach where money was lesser but life less stressful.
  • Sleeps at the bar even off work and off-season, almost given up hope on starting a family.

Ticket Inspector at Bandra train station:

  • Highly articulate, speaks very good english and able to debate coherently about the nuances of indian laws on railway fares
  • Takes bribes from errant passengers after a long conversation on the rule of law in india and his morals.
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5 thoughts on “Episode Zwei: In Conversation

  1. i particularly like your conversation with the 14 years old. i always wanted to travel a little bit in china but i have yet done so. my friend said that i only have to sit on a street of a poor province for 10 minutes and observe whatsoever happening on the street, i can understand much more about politics and also the kind of lives the majority of people have lad in china… think i’ll appreciate my life much more and work much harder had i experience first-hand the kind of life many unprivileged people have had around the world…

  2. there are many ways to get motivated, i think you are doing fine =)

  3. I particularly like what Avinash Bajaj had to say about the viability Web2.0 in India. But I would like to add a bit more to that :-

    1. I generally find that once a particular web service idea becomes popular in the US, it is very easy to make a port of the application and localize it. This will work fine in France & China because of the language barrier which prevents a vast majority of the target audience from using the original web service. But in India, the language barrier does not exist. Especially, the people who can afford broadband, and who can grasp a new concept like social bookmarking are well-conversant in English already. So that destroys the chance to launch local ports of Del.icio.us and Digg and other similar sites for India. If you carefully notice the activity on these sites, you’ll actually find loads of Indians hanging around in these websites.

    2. But ofcourse heavily content-oriented India-specific sites are highly lacking. But as you know most of the Web2.0 companies are built out of miniscule budgets (if any) and the business model does not support content generation. Most of the ideas are about user-generated content, content aggregation, content mashups, etc. Again the lack of good local content can largely be attributed to poor broadband penetration.

    3. What I think will work really well are traditional services rehashed as web-based services with the promise of a much better experience. Selling Indian Railways tickets online, offering travel search for flights, etc will work well. If you have ever tried to stand in a queue and reserve a train ticket in India, then you’ll realise how much better it is when done online. But then again, no matter how convenient these online services might be, people will not pay beyond a certain amout of premium for the better service. Just because you offered better service, you cannot charge a lot more in India. Doesn’t work!

    4. Most importantly the biggest issue is how to connect the major chunk of the Indian population which is offline. I’ve had a couple of exchanges with Rajesh Jain (another successful web entrepreneur from India – he sold his web portals to sify) and he thinks that mobile phone is the only medium to connect with this vast majority of offline people. He has been blogging several articles about this on his blog at emergic.org. Personally I think this might work (if the mobile operators undertake some initiative to push this). Two weeks back, I was travelling in some of the rural areas in the state of Karnataka (around 300-400 kms away from Bangalore) and everywhere I went there were people with awesome Nokia phones in their hands. The phones had megapixel cameras. Almost everyone was using them as full-fledged digital cameras. Majority of them probably never really used a PC, or logged onto the internet for that matter. But they’ve downloaded ringtones, mobile games, and clicked hundreds of snaps with their phones and spent lots of money in expensive memory cards for their phones. Mobile phones are becoming so affordable back in India especially with Nokia announcing that once their plant near Chennai starts operations, they plan to sell their low-range models for S$ 40. Now that’s just the price of a SIM card in Singapore!

  4. i really love your comment. i had the personal experience of queueing for train tickets and even getting fined for not having one. its a real pain in the A.

    I think the major market opportunities in Asia’s for new media communications is going to be centred in:

    1. Korea where some of the most amazing innovations for broadband internet are occuring due to ubiquitous access. Naver, Cyworld are amazing success stories for the size of their market and other Asian countries have much to learn from this uniquely Asian model of relative success.

    2. Mobile markets in India and CHina. I have a growing hunch that the $100 laptop, while a socially beneficial and technically sound idea, will break down operationally during distribution. THere’s an immense learning curve for the untrained individual even if thats overcome and huge switching costs (from the mobile interface) involved that poses strong barriers.

    There’s another major anecdote from Anand Mahindra that I did not mention. HE said the same amount of investment in a rural area has a higher socio-economic multiplier effect compared to urban investment. And that is why he defends India’s policy of investment on road networks in rural states. His main point is also about networks and how they will really help create externalities compared to one-off financing projects.

    In the same way, I believe the existing strong network effects of mobile phones coupled with high penetration rates will really have a significant impact on how innovation trickles down to the users and the impact on their lives. The mobile phone platform is ubiquitous in india and china.

    Some day not too far in the future, India and China will teach the world how to build scalable mobile phone based businesses.

  5. fyi, the indian government has already rejected the $100 laptop offer.

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