As per TRAI, India has 8 Crore (80 Million) Online users who uses internet once per month which may be statistically correct but has some serious flaws in it (I will not go much into that though).
For example,
1. How many of the “atleast once per month” crowd are browsing from Internet cafes ? it is very hard to judge as it can be anywhere between 25% to 50%
2. I don’t consider mobile net users as online users, they don’t click on ads intentionally and they don’t make purchases from mobile. Most of the mobile browsing is limited to information search or checking email and that too for very short time.
From my experience and whatever I have seen on the Indian web space, we can break the Indian online users into 3 segments -
1. Premium Users – the top 1% (around 10 lakh living mostly in metros) who make online purchases from ebay.in, buy online tickets from OTA sites and reserve movie tickets online. They are the real thing and most of the VC funded online startups are looking to target them as they will give instant money to thee. If you are running an online food ordering site, online hotel or tickets booking site, loan or credit card comparison site, electronics comparison site, online tax payment site etc these are your initial targeted crowd as you don’t have to explain them anything, they know what you are, how you work and what they have to do.
2. The Mid Segment - These are the people browsing Naukris and Shaadi’s sites, sending online sms’es for free, checking online cricket scores, downloading movies from torrents and rapidshare/megaupload, browsing facebook/Orkut and checking their exam results. A huge segment of this crowd consist of engineering students (18 to 24 age group), a group which after few years will convert into Premium users. So if right now the ratio is 1:5 between Premium to Mid size segment, I am expecting it to become 2:7 in next few years. We can put roughly 2 to 2.5 crore people into this segment.
3. “Aam”(common) Internet User – These probably constitute of roughly 60% of all online users, people who are searching in youtube for movie clips and TV episodes, listening to songs, watching Indiatimes galleries (we all know why Indiatimes have put the gallery, don’t we!), looking at Orkut/facebook, browsing desi boards and of course the porn!
To me this segment is the problem area, this 60% is just not interested in making any online purchase, the ads they click are totally useless (most of them are accidental or curiosity clicks), these people are using 128 kbps connection and they are only using internet for entertainment. But I do feels that these can be easily converted to the Mid segment crowd if they get something in return, for example Naukri and Shaadi are able to build their huge databases because of this segment only, if you can offer something good and free, it is very easy to penetrate into this segment.
I think an Online Startup in India can be a huge success if it overlaps all 3 segment, affect peoples life, has the potential to go to mainstream and offers something for free which people are looking for and of course if the founders are prepared to realize that their company won’t make 100 million dollar revenue after 5 years! (this realization often helps to focus on client and not on revenue)
PS – I have made lot of assumptions and speculations in figures but I do strongly feels the bigger picture that comes out is correct, if you feel otherwise, please do tell me through comments or through email.
Hi Pushkar,
Thanks for the great blog. Very interesting and Insightful.
Still better is that you are Very Good human Being. Great Going…. Keep it up.
Warm Regards,
Praveen
Thanks Pushkar, for such insightful info. You are correct this “Mango People” are interested in entertainment only. Even a Computer illiterate knows only one url worlds*x dot com.
Thanks praveen for the comment, though I am not sure from where did you got the very good human being thing part about me
Hi Hyder, thanks for commenting, Actually My point was that we need to educate that segment of net users who are only using it for entertainment and to bring them to that segment which is looking for information which will increase the value of internet by many folds in India. The biggest reason of poor Internet penetration in India is not because of apathy of BSNL/Airtel or poor last mile support but because people have failed to understand what they can get from it.
your percentages are assumptions but primarily you are right but these three tiers can be found across all markets all over the world and the premium and the mid will always be smaller percentage of the overall market.However if you grow the overall market than you can find more premium and mid customers and that seeing the current scene can only be done via mobile not through internet