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Business on the Internet will overshadow retail boom: experts

31-March-2004
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Business on the Internet will overshadow retail boom: experts

Some two years ago, the very mention of doing business on the Internet drew words of disbelief from a wide cross-section of people. The dotcom burst had indeed erected psychological barriers in the minds of people regarding the potentials of the medium. But the last 12 months have catalysed a distinct shift in the outlook regarding the Internet economy.

The mood is truly buoyant in the Internet industry, and experts view that business on the Net will exert a northward thrust in the next 12-18 months. On this count, the exchange4media.com iZone Round Table held in Delhi threw up no contrarian view.

In fact, Mahendra Swarup, CEO, Times Internet Limited, categorically stated during the course of the Round Table discussion that the inflexion point is just 12-18 months away.

He said the Internet growth in the last 12 months can be compared with the growth in mobile services in the country. “Internet has opened a window of opportunity for subscribers and e-commerce certainly has a bright future in the country,” he said.

Swarup said the so-called retail boom would pale in significance the moment e-commerce gains momentum. “The conventional retail sector requires huge investments like in real estate, transportation and logistics, and so on. But in the case of the Internet, the investments have already been made and the stage is set for e-commerce to take off,” he said.

“There are almost 5,000 km of optical fiber cables that have been made available, be it by the Railways, GAIL or Reliance,” he said in support of his point on infrastructure.

He added that while the brick ‘n mortar retail business may be lacking in trained manpower, there is no dearth of talent in the Internet domain.

Broadly agreeing with Swarup, Amitabh Singhal, President, Internet Service Providers Association of India (ISPAI) pointed out that the Internet had certainly made a comeback. However, he said, there was a lot of scope to improve business on the Net. “Around 40 million telecom users can be transformed into broadband subscribers in the coming years. Broadband penetration is directly proportional to business. But, presently, broadband subscription is 1 in 25,000, which is 0.4 per cent of the total subscribers. This number can grow exponentially in the coming years,” he said.

Currently, broadband through cable is being used by 40 per cent of the 40-million telecom subscribers who use cable, he said. ISPAI has targeted a user base of 100 million-plus in the coming years, he added.

Swarup, however, pointed out that broadband was being provided by almost all players forgetting the fact that sites are not designed for high-speed Internet.

Arun Tadanki, President and MD, Monster Asia, providing a perspective on the growth of jobsites in the country, said in a matter of three years, jobsites in the country have managed to carve out 12 per cent of the total value of the recruitment advertisement business netted by print players. “This is proof enough of the growing popularity of the Internet,” he said.

The hard facts notwithstanding, the Internet is battling a problem of mindset which needs to be overcome for business to grow. Referring to this aspect, Swarup said step-motherly treatment is meted out to the Internet “as hardware facts are taken into consideration while determining its reach”.

He explained that while in the case of the print and television mediums the reach is defined by guesstimates based on miniscule samples, the Internet reach is looked at with jaundiced eyes even though the medium presents accurate figures. This is one reason for online advertising remaining at a low ebb, he said.

Swarup felt it was not appropriate to compare the reach of the Internet with the other mediums. “Apples should be compared to apples and not with oranges. But the saddest part is that media planners refuse to learn this,” he said.

He made a startling remark that most people at top levels in the advertising world are averse to technology including the Internet. “The need of the hour is to educate people about the Internet,” said. Supporting Swarup’s viewpoint, Tadanki said that advertising agencies should indeed start experimenting with the Internet medium.

Singhal added that there is a serious shortfall of research and data that can talk about email marketing, rate of opening the site, advertisements, etc. “Today, 97 per cent of the users are on the dial-up and downloading websites is also difficult. As a result, www has gained a new meaning--world wide weight. Buying products through the Net is difficult in the country,” he said.

Business on the Internet could indeed grow manifold in the coming months but certain fine-tuning with regard to quality of Net services, general awareness of the medium and research and data collection need to be done on a war-footing.

exchange4media.com will bring to you many other dimensions of business on the Internet in the coming days, while reflecting the key points of discussion at the iZone Round Table.

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