Events That Defined 2011: The India Internet Story

Wednesday January 04, 2012 , 6 min Read

india_internet_story — 2011 witnessed India swooshing past the 100 millionth internet user mark and reaching 121 million internet users, 97 million of whom are expected to be active Internet users, accessing the internet at least once in a month. As a % of total population, internet penetration stands at 8%, social network penetration is at 3% and mobile penetration is at 71%. 20 million people use the internet at least once a day, and there’s been a 25% increase in internet users since 2010. On mobile usage, 59 % of India’s internet users only ever access the internet via mobile device. And 67% of e-commerce comes from mobile devices.

The top 12 events that will make 2011 an unforgettable year are…

1. #Anna ruled the Indian Twitter landscape

Social activist Anna Hazare led the fight against corruption and caught the imagination of the whole nation, thanks to Twitter. #Anna hashtag trended throughoutIndiafor many days awakening Indians to join hands and fight corruption together. Support for Anna’s campaign poured in from the common man to celebrities, successful entrepreneurs and leaders. While the fate of the Lokpal bill is still yet to be decided, the #Anna Twitter campaign really showed the power of internet and social media and its effective usage for community building.

2. ICC Cricket World Cup Live on Internet

Perhaps one of the most unforgettable moments of 2011 isIndiawinning the ICC 2011 Cricket World Cup after 28 long years. The whole nation stood united again and celebrated the victory againstSri Lankain finals and againstPakistanin semi-finals. What made this World Cup special was the free live telecast of all the matches on the internet. For a cricket-crazy nation like ours, this was a boon for many people, especially students and corporate employees who otherwise would have missed some of the sweetest moments of the World Cup. Many questionedIndia’s internet broadband speed and bandwidth’s ability to support millions of live streaming requests. The question has been answered now. Will this free live telecast of the ICC 2011 Cricket World Cup matches (with ads) set the standard for future big sporting events, is something which we have to wait and watch.

3. A $1 Billion valuation and a shut-down in the same year

“Get large or get lost” was the wisdom of 2000 dotcom crash. For many, it is alarming to see Flipkart’s valuation at $1 billion and Taggle (launched in April 2010, received $1 million from Battery Ventures and Greylock Partners) pivot and shut down the very next year. Let’s hope these valuations can scale up with time. Investments are being aimed at an early exit into the market (18 – 24 months). The repercussions of this will be faced by smaller e-commerce startups who would need to survive long enough to see a similar valuation or be diluted to end up as an undervalued company.

4. E-Commerce and Deal sites galore

Retail web audience grew 18% last year, with nearly 3 out of 5 internet users now shopping online. Amazon and Apple emerged as the top retail sites, while Snapdeal.com and Mydala.com led the coupons category.

Amazon led as the top retail destination inIndiareaching 6.8 million visitors, representing 14.7 percent of the online population. Other top retail destinations included Flipkart.com (2.7 million visitors), HomeShop18.com (2.3 million visitors) and Naaptol.com (2.1 million visitors).

In November 2011, 7.6 million Indians visited coupon sites, representing 16.5 percent of Internet users in the market. Snapdeal.com led the category with 5.2 million visitors, followed by Mydala.com with 1.4 million visitors and Crazeal.com with nearly 1 million visitors.

5. Snapdeal Nagar : E-commerce to social impact

This deserves a special mention. In June 2011, Snapdeal adopted a remote village (Shivnagar, UP) inIndia and enabled clean drinking water facilities by installing manual pumps. To show their gratitude, the village’s residents decided to rename their village to Snapdeal.com Nagar –a noble example of CSR.

6. Internet Censorship – Impo“sibal”

A blow to democracy, a concept Indians understand lesser than the pride they derive out of it, Kapil Sibal’s announcement will not be forgotten easily. It’s possible that some high profile politicians (we know who) got frustrated over slanderous messages on social sites and brought it to Kapil Sibal’s attention. Naturally, he did what he had to do.

Sibal is not to be taken lightly. He is an astute politician who is quite savvy at his game. It’s possible that he is sending a friendly reminder to technology companies on alleviating any threat toIndia’s internal stability.

7. Tablets – Aakash and Ubislate 7

The world’s cheapest tablet (Aakash) was sold out in few days after launch in October this year. The Indian government plans to follow up with a 7-inch model called the Ubislate-7 priced at $57. These subsidized laptops are to be distributed to schools and universities to enable multimedia education.

With delays and setbacks in its production, the device is not really a “Made inIndia’ product. It’s jointly developed with Datawind, a London-based company and the Ubislate 7 device is going to be made inChina. Originally projected at $35, Aakash is to be sold to the GoI at $50.

8. FDIs in Retail: A threat or not?

Maybe:

There’s no doubt that Walmart Inc., can create 10 million jobs. But there is evidence that they would eat into e-commerce market share with their highly streamlined e-logistics.

Maybe not:

It is possible that it may end up increasing the overall size of the retail pie (more consumption), and not affect small retailers, who account for more than 90%.

9. The Mobile Story

Mobile Internet is set to lead the way for the industry. As against 14 per cent in theUS, 11 per cent inRussia, and 6 per cent in theUK, GoogleIndia sees about 40 per cent search queries from mobile phones in the country. Smartphone growth inIndia is claimed to be currently at 56 per cent CAGR. In 2011, 21 million smartphones were sold inIndia. This will grow to 32 million in 2012, according to Google MD,India. Mobile phones are the future. More smartphones and tablets are being shipped inIndia than desktops and laptops

10. Venture Capital Review 2011:

11. VC Deals Review 2011:

Winners: E-commerce, Mobile VAS, Tech

12. Travel Story

The number of visitors to travel sites increased 32 percent in the past year to 18.5 million visitors as more Indians turned to the web for their travel needs, according to comscore. MakeMyTrip reached nearly 3.9 million visitors (up 63 percent) followed by Yatra Online with 3.5 million visitors (up 82 percent) and ClearTrip.com with more than 2.1 million visitors (up 80 percent). U.S.-based Expedia Inc. secured the #5 position with 1.8 million visitors (up 12 percent).

13. The Smaller Ones:

Last but not least. These startups get 20% press coverage, but constitute 80% of volume, human capital and define the shape of the industry. These are everyone among us who toil to see our brands becoming big one day. Without taking any company’s name, we owe you all a big thank you for defining 2011.

The 2012 Story: Our picks on the emerging opportunities for innovation inIndiaare:

Let’s hope the years to come witness a massive growth in the Internet sector inIndia, supported by highly favourable demographics, growing Internet-broadband penetration, launch of 3G networks, growing middle class-income levels, noticeable pick-up in tech-gadget and mobile culture and surge in home-grown Internet startups. Happy New Year!

By – Chandan Raj & Sajid Shariff

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