The Internet and Mobile Association of India?s (IAMAI) I-Cube 2009-2010 Internet in India report released this month says internet usage in urban India is becoming more widespread, though overall internet penetration remains low. Not just that, in the year of slowdown people started spending more time on the internet. IAMAI president Dr Subho Ray speaks to FE?s Rahul Sharma, on what these and other trends could mean for the digital economy, and especially the advertising and marketing industry. Edited excerpts:
How does the growth in internet usage compare to BRIC (Brazil, Russia, India and China) countries?
The growth rate in 2009 has been around 20% which is higher than the previous year. But the problem is, it is on a small base. If you compare with countries with similar numbers you will find that on all other parameters such internet density, commercial value derived from internet businesses, etc., we are far behind.
China has over 350 million internet users and cannot be compared to any other BRIC country. Brazil has around 67 million active users and Russia has 45 million. In terms of internet users relative to total population, however, we are far behind. The pace of growth in Brazil and Russia has been much faster, in fact, Brazil has come from behind and overtaken us in the last three years.
The growth in claimed internet users in 2009 over 2008 has been higher than in 2008 over 2007, whereas the active internet user growth rate has been constant during the same period. Why?
This is a what-you-see-is-what-you-get survey and much of the rationalising is hindsight or retrospective. I can only guess that in a slowdown year where people were looking for more options and cheaper options for everything many must have experimented with internet for the first time.
For a brand which is using the internet as a marketing tool, where should it position itself to have maximum visibility?
Building brand on the internet is not just about visibility: it is more about communicating what the brand stands for and what it promises to deliver; it is also about understanding what are the conversations/buzzes around the brand and responding and interjecting to them. The only course to brand building on the net is to experiment and through experience.
What explains the fall in online banking?
I would not read too much into that. It might be the proverbial dip before the take-off. Yes, banks are promoting internet banking and Reserve Bank of India is putting security practices in place. In the long run, internet banking is going to go up and up.
Has there been a growth in broadband connections? And how many people, as a percentage of total internet population, use mobile to access the net?
Broadband connections are less than 5 million but that neither reveals nor conceals anything since it counts any type of broadband from 256 to 10mbps as one connection. On use of mobile for accessing internet, our study has shown that at present there are 2 million users.
Why is internet penetration still low?
This is the mother of all questions! In absolute terms it is not low, 50 million plus is a decent number given our other social and economic parameters. But is low in terms of per user monetisation and our total population. There are two reasons for this. First, lack of access: Internet is a medium based on discovery, you have access to it, you use it, want to use it more and then it becomes a part of habit.
Second, post discovery, there is lack of engagement because of cost of ownership and lack of local content.