Relevance of sites like Facebook, Twitter, LinkedIn and GroupOn in India.
Prelude:
The idea of this blog is to understand the impact of Web 2.0 and how relevant are these sites in India. To take a few steps backwards, web 2.0 generally denotes “any website whose content is majorly driven by the website users”. But one question which has always been in everyone’s mind is how much economic value these web 2.0 websites derive and how much of these are relevant in a global scale not just restricted to US.
Initial superstars Web 2.0:
Though there were many start-ups in the web 2.0 area few managed to be popular during the early years. Especially, two popular instances of Web 2.0 portals which conquered everyone’s mind was
· Wikipedia - which till today, serves as the epitome of user driven content. Where users contribute to any topic in a jiffy, by adding content they have on the web
· Youtube – which has made sure that most people, who wanted to express themselves or wanted to showcase their talent had a right platform to do so. Even in these days one instance of such overnight youtube celebrity is the 10 yr old Maria Aragon, who posted video of her version of song “Born this way”, which managed around 34 million hits even to impress Lady Gaga(link http://goo.gl/b0RJa) . In fact within few days CNN and BBC were knocking her door to get her interview/ live performance.
But both these ventures did not make much of excitement to the investors. Wikipedia is still operating as a non-profit establishment run by Wikimedia and Youtube ended up being acquired by Google. Thus no one ever got to know how much value they could garner in the open market.
Current bigwigs of Web 2.0, and its influence in India:
Then came the years 2006-10, when the Web 2.0 came unleash its actual strength. Companies started modeling their platforms more to enable users driven content. Companies that came up are Facebook, Twitter, LinkedIn and most recently Groupon. The amount of patronage these sites are gaining is increasing in great numbers. These sites have been adding an average of a million users per month. But these sites (except LinkedIn) have not gone into the market for IPO, three of them are (Private equity) funded. Thus keeping the potential investors guessing on what their implied value is.
One value drivers for these companies in current time would be their relevance / presence in markets like India and China. Given the fact that these markets have a mouthwatering number of potential users coupled with growing penetration of internet in these market one important question remains how relevant are these sites in China+India. Since Facebook and twitter are already blocked in China Indian relevance has grown more to these companies.
Let us have a look into the business models of these sites and see how much relevant they are in India, and how different their positioning are there in India.
1. Facebook:
This site started more as a product of for project by a Harvard student, Mark Zuckerberg. But later it graduated into site, where people could actually find potential people to interact and date. Though there were sites doing similar function, what differentiated Facebook from other site was the “Relationship status” (which is not available in the new format), which enabled users to know who was available for picking. The site enabled people to update on what they were doing, for which their friends could view and respond, thus equaling a feeling of being around friend circle online. It also enabled friendship among people who belonged to their friend’s circle.
The site grew to 500 million users by 2010 and currently has 600 million registered users. If Facebook members were a separate country it would have been 3rd biggest nation (current 3rd has only 300 million population). The top most followed people in Facebook are Lady Gaga and Justin Bieber who have combined 67 mln followers equivalent to population of the 18th largest country in terms of population.
- But in India, Facebook has around 25 million users (src: http://goo.gl/85GFE) and the site is rarely used for new networking. It is mainly to get in touch with your relatives, especially those not living in their own town. This was a model of usage, which even the founders had not thought of initially. Not that there is not networking in India, its just primary use for Indians are to get in touch with relatives and very close friends. If fact, any request for friendship from an unknown person always met the fate of rejection, which in a way is contradictory to the actual intent of the site.
Moreover, the other part is the users generally do no update their status at all. Everyone is interested to understand what is happening in other’s life. Only updates are in generally made when there is a personal function in the family or when one travels. But the actual notion of “What’s in your mind?” rarely gets reported.
2. Twitter:
Twitter, which initially started to make use of the mobile platforms in developed market, is popularly referred to as micro-blogging site. It allows users to express themselves within 140 characters. Before the inception of smart phones, this was the only way one could stay in touch with the networked contacts. In fact, this made sure the celebrities used it a lot. That was because Twitter did not need one to sit in front of their system to stay in touch with their contacts/ fans. The additional feature of having followers, made sure celebrities were followed without being disturbed by useless updates of their fellow fans (this format was later adopted by FB too). But in the age of smartphones, twitter is now evolving into a web application more than a mobile platform application.
- In India, twitter is only used more as a smartphone app than thro SMS. The penetration of twitter is very minimal, especially since the smartphone penetration is very less. The only ones who normally are on twitter are those who have visited western countries.
- This can also be attributed to the fact that not that many celebrities are on twitter in India. The persons with most number of follower in India are Shashi Tharoor (a politician), next comes Priyanka Chopra(actress). Both of them tweet something around 20 message a week, other them third stands Tendulkar followed by 7 more celebrities who altogether tweet hardly 40 tweets per week. This has ensured the interest on twitter is very minimal. Thus unless someone is interested in what is happening in western countries there is hardly any content on twitter for someone in India.
3. LinkedIn:
LinkedIn is a professional networking site. It is said to be the Facebook of professionals seeking to network. There have been companies which had made sure their employees are registered in the linkedin. In fact at one point of time it was even thought to be unprofessional not to have a linkedin profile. One advantage linkedin provides is that it enables one to know the person even before he meets him in person for any business transaction. Linkedin has around 100 million registered users. This number is huge considering the fact that only working professionals use this site.
Among all the new bigwigs of Web 2.0, LinkedIn is the only site to have cashed out on its popularity, the IPO was well received (though termed by many even now as a bubble) valuing the company at USD 8.9 bln.
- On last count, there were around 9 mln users of Linkedin in India. On a relative comparison, Linkedin is actually the web 2.0 which can boast of the most relevance in India (almost 10%) users from Indian making India its second largest market next to US (45 mln users). But Brazil which is growing at 400% YoY is playing catching game.
But it still suffers from image issues, LinkedIn is again just used similar to Facebook, where people do establish lots of connections but eventually there is no activity between the linked personnel. It is similar to setting up a telecom network in a building but not making calls, there is a latent capacity which seems to be untapped.
Even worse, any person starting a linkedin profile is considered to be searching for a job, in general raising a wrong notion about the site. Among those who have created profile, they hardly maintain the details of their profile, some assume it is too much go give out details of one professional life in the web.
4. Groupon:
There are many marketing related sites and forward mail informing about discount. These kinds of campaigns either by mails or sites have for aged been ignored. But one company which has made a good use of this opportunity is Groupon.
The name is a combination of Group and Coupon. It enables collective bargaining model through website. The business model is pretty simple, site offers one deal per day, assuring the manufacturer a guaranteed amount of buyers. This deal details are sent to all users thro mailers. If the agreed amount of people subscribe (i.e. if they agree to buy the product), then they have to pay for it and get the product at a resulted reduced price.This site had received lots of patronage especially during the recession days, when people hatched good deals at a better price.
- Groupon: has only been popular in US, it has its own other services in other markets. In India, the brand is hardly known by anyone. But the company recently acquired sosasta.com a similar modeled site. But there is hardly any proven patronage for such model in India, mainly owing to very poor internet penetration and mindset of Indians which is very averse to buying anything over the internet.
Conclusion:
Though, we have touched upon how relevant the bigwigs are in India, note that we have not discussed on their anticipated valuations in the market. This is actually a different stream and a huge topic on its own.
Sticking to the topic, the bottomline, one has to note among the bigwigs of web 2.0 is that they have been seen saturating in developed economies. The only avenue for them to grow is to enter the developing markets especially with BRIC countries (except for China in few cases). With that in context, India owing to its sheer denominator of users and English speaking population offers a very good platform for them to expand.
One focus areas for these sites is to make sure the apprehensions and the image they are currently carrying has to change. The marketing for these sites are very negligible in India, one has to make sure people understand the motive behind the sites to appreciate the actual usage. This will ensure a spurt in its number of users in India.
Let me know your views / comments by either replying to this blog or mailing to me at ganesh.dg@gmail.com
No comments:
Post a Comment