Rajiv's profileEaglePhotosBlogListsMore  |  Tools Help |
|
|
July 01 The Rise of SIN!Business World had an interesting story in this issue which was about the rise of sin in India. You can read the full story at http://www.businessworld.in/content/view/4795/4903 The central premise is that how in India, the SIN industry - consisting of alcohol, tobacco, gambling and porn - is going through a huge growth phase and it permeates all sections of the society. While on one hand the economic boom is resulting in more disposable income, liberalization of attitudes and increased level of empowerment (particularly in women) - which is fueling the SIN industry, on the other hand, the poor seems to be getting poorer and these 4 SIN components are the only means of escaping from the problems of daily life. This seems to be one area of the Indian economy which seems to benefit from the Great Divide that exists in India today. To put things in perspective, the combined Indian SIN industry is pegged at INR 300,000 crores (yep! not a zero wrong) - which implies 10% of India's GDP. No other country can boast of a ratio like this except India. Now these are profitable businesses - since not only is there an uptake on SIN (as mentioned above), but also they are addictive in nature - hence once a customer, always a customer! ITC (Tobacco), UB Group(Alcohol), Zee Group (Gambling) are some of the biggest players and their growth rates are more than 30% YOY. Porn obviously is a "behind the scenes" industry so official figures are not available. Online porn and gambling, as per IAMAI, accounts for 80% all traffic in India. Zee Group's PlayWin is incidentally the biggest business of the group - much ahead of its TV and Media business. Valued at 2400 crores, this site gets more hits than the Indian Railways site :) What a revelation, read the full story! May 28 What's happening with TV!!!Consider this, the Indian TV industry has about 300 channels in operation today nd there are 200 channels waiting to launch this year!!!. Currently standing at about 22,000 crores, the industry grew 18% in 2007 and is slated to grow 22% YOY. Same for advertising on TV which is 8000 crores today and is expected to grow to 20,000 crores by 2012. The other boom in this industry is the increase in the pay TV households - from 74M in 07 to 115M in 2012. Now while all this growth is cool, there are a number of factors which will see this industry go through some change and here's why.... 1. More channels means limited bandwidth: Bandwidth is a limited resource. The current analog platform can carry just 80-90 channels. So if i launch a channel today, i pay a significant premium to be in the prime band. Currently this is about 65-75 crores per channel - which is leading to a situation where just to have your channel in the prime band amounts to a cool 35% of your costs. Now this should get solved when digitization happens - such as CAS, DTH, IPTV but this is moving very slowly right now. 2. Cost of content: Once you have figured your slot in the limited bandwidth pipe - content is the other big issue. Content creation costs are rising 15% YOY, with each episode costing around 20-25 crores. Due to broadcasting issues mentioned above, it becomes tough for folks to launch niche channels - hence they go for more mainstream channels like news, general entertainment and movies which drives up the cost of content creation. After all you can only have so many people create as much content for the same category. 3. Advertising: What does this mean for advertising? Well think about it... i have to advertise my products - say a car - which is meant for the masses. With 8 channels in general entertainment categories - i will spread this over multiple channels - which leads to fragmentation of advertising revenues. This hurts even established players!!! So what i foresee happening is that these media houses will increasingly do either of the two things. Either they will become a multi-channel player like a network (eg: Network 18) so that they are able to offer a complete package to the market and to the advertiser and thus drive synergies OR they will become multiple-medium players embracing TV, Internet and offline so that again they are able to exploit synergies there. Me thinks the advertising world will anyways shift to digital and online since that is where bandwidth, better targetting and increased usage patterns are being seen! Wot Say? June 05 Social Networking Hits Big Time In India!This is a trend that is huge worldwide but has hit big time in India as well. To set the context,
Worldwide Stats Total customers base: 250M Clicks per second: 100,000 Revenue: $900M, projected to be $2B by 2011
Why is Social Networking growing so fast in India? This is easy to understand. India has about 40M net users of which 50% are in 16-35 age group and these guys generate 30,000 clicks per day. There are a total of 15M people on Social networking sites in India. People in this age group are by nature very heavy users of social networking apps – since this is a big need with this age group. With a majority of Indian population being in this age group, demographics are in play – and Indian stands to be one of the most dominant community, if not THE most dominant.
Why are VC’s pumping so much money into this space? Even easier to understand. The business model of these sites is very efficient . All the content on these sites is generated by the users - hence the company has no cost of content generation and advertising. Besides the stickiness factor is huge in these sites, since there are defined communities and people of same interest gather together. The potential of these users to be converted into customers is high since targeted ads can be delivered. Its easy then to see why close to 70% of the online ad revenue in India is generated from social networking sites. The online ad market in India stands at 100 crores, growing at a CAGR of 65%. (check earlier post below on online Ad market in India)
These sites have the following evolution cycle. The basic model is on Invite - Interact and Search. The first 1 lakh user base is critical where it is mostly Invite only. From 1-10 lakh users start interacting with each other and form communities. Beyond 10 lakh is when people start searching for interest areas and increase the community …. Explosion happens! The idea of these sites is to convert a user from a first time visitor to a repeater and then an insider (where the user generates content)
Who are the stars in this space? Sulekha: UserBase=3M Rediff (rediffconnextions.com): 1.5M users Orkut: 600K in India, 55M WW Minglebox.com ($7M funding from Sequoia) Yaari.com BigAdda(Reliance) Ibibo
Till later… April 22 MNC's In IndiaI was reading about MNC’s in India and I think the following points are worth remembering
1. Nokia, Maruti, HLL, HP and LG are the top 5 MNC in India. Nokia leads by having an Indian revenue of ~$4B. 2. Most large MNC’s in India are consumer focused, since the early stage reforms in India have been focused on this sector. As more reforms happen in other fields like energy, infra etc, the MNC landscape will change with the biggies like Exxon, Chevron etc entering the Indian market. 3. Most MNC firms in India are in the ~$1B range and contribute anywhere 2-12% of their parent company. 4. What is interesting is that at this stage there is more money being invested by Indian cos outside india than by MNC’s in India. For every $1 invested by MNC in india, Indian cos have invested $2 outside. This implies that on the back of strong domestic growth, Indian cos are becoming MNC’s faster than anything else. This should tell everyone how robust the Indian growth story is!
Well, now I hope I can put these 4 points to use somewhere J
January 13 The Online Search Advertising MarketFacts and Figures
Online Search Marketing Companies buy keywords on major search engines like Google, Yahoo, MSN to be displayed alongside search results. When the user clicks on a particular link, the advertiser (person who has bought the keyword) will pay the search engine the agreed rate. This is normally called the Cost Per Click.
Search Advertising Agencies Increasingly more and more companies are outsourcing their search marketing to specialized agencies. These agencies buy the keywords and converts them to the leads that the original companies then follows up and converts to sale. Thus these agencies sit between the advertisers and search engine. 2 major ones are Webchutney, Connecturf, Pinstorm
Why will it be more important
December 19 Indian VC and StartupsVenture Capital Firms in India
Startups in India
June 05 Retail Landscape in India
Indian Retail Market Data
Major Industry Players
Popular Retail Formats Hypermarket: Mother of all formats – this is the biggest and most diverse format. Typically requires 100,000 sq.ft of space. Normally, stocks everything from foods to grocery to electronics. E.g. Big Bazaar. Currently (2006) India has 35 Hypermarkets and there are plans to increase this to 650 across India by 2010. Supermarket: These are focused on one category such as grocery, electronics and are primarily located in residential areas. FoodWorld is an example of this Departmental Store: This format carries various categories in “departments” but is much smaller than the previously mentioned hypermart. Shopper’s Stop, Westside, Lifestyle are all examples. Convenience Store: This format is big on LOCATION and the accessibility to its customers. E.g.: 24/7 in Delhi Exclusive Outlet: As expected, this carries the goods from one vendor and can either be company owned or franchised. Almost every vendor has one.
|
|
|
