5 tips on launching your company / service in India

If you are part of a startup or have a new product and are looking to expand into the “India market”, here are some tips on what I have learned over the last couple of months.

Some basic facts for you to keep in mind:
1. Although India has over a billion people, fewer than 1.5 Million people work in the “Information Technology sector”. These people tend to be the early adopters of technology followed by students in high schools and colleges. The financial services and retail sector employees tend to be the early majority and the rest are mostly laggard in terms of adoption of new Internet related technologies. However the latest in cell phone or mobile technology seems to be the anomaly in this pattern.

2. There are about 150 Million personal computers in India, and 42 Million of these have Internetconnectivity. 2.5 Million broadband connections at home. Fewer than 5% of these broadband connections deliver more than 1Mbps. India has ~260 Million cell phone users and of these about 550,000 people have data capable smart phones (Nokia and Blackberry have the most market share). The average broadband connection costs about Rs. 500 (about $12)/month, and tends to be a barrier for adoption, besides being unreliable and inconsistent.

3. Most (Over 85%) of people accessing the Internet do it at work (where broadband is available). Most companies have restrictions on accessing the Internet from work including proxies, disallowing downloads and in some cases restricting usage to certain websites. So, you are better off having a pure play “in the cloud” service than one that requires downloads. The other major source of traffic is from Internet kiosks where people pay by the hour to surf the web.

Here is what I have learned over the past few months:

1. Ensure you have a “mobile strategy” to reach the early adopter demographic: Like most other European countries, SMS has the biggest usage among the target demographic of 17 to 24 year olds. Young Indians tend to be “out and about” and tied very little to their desk or PC, so they surf the Internet, chat with friends and communicate primarily with their cell phone. About 12-14% of these folks tend to have a job at a call center, or retail, etc. so among this subset of wage earners, disposable income tends to be fairly high, since they stay with their parents.

2. Even with mobile the lowest common denominator (voice) is the one you have to support. The 24-35 demographic has 3-4 different segments – Urban professional, Urban off-the-grid and Rural. Urban professionals tend to use the Net & SMS more than Rural or the “off-the-grid” crowd. The Urban off-the-grid tend to use their mobile for mostly voice calls. Rural tend to be the same. Since incoming calls are free, most people prefer to receive than send calls.

3. Cater to local tastes in application usage. This is a very obvious one, but an important point. Broadly speaking, Indians love Bollywood (local movies), cricket for entertainment. They are voracious news junkies in general, but tend to read a “physical newspaper” more than surf the web for news. Horoscopes and astrology applications do very well in most urban and rural areas. We assumed that maps and directions would be good applications for India, but found out that most Indians, “ask around” for directions and recommendations so the use of maps and weather tend to be far and few between.

4. Assume over 80% of your demographic is coming via 56Kbps connection: Broadband at the office is fairly restricted. More people access the Internet via cell phones than PC’s in the large metros (Mumbai, Delhi, Chennai, Kolkatta and Bangalore) since they tend to have long commutes.

5. To market you company, traditional media beats Internet consistently in India: To get your word out and awareness of your company / service / product you are better off using traditional media – newspaper, television and radio (not necessarily in that order). Since the number of people using the web is small, the chances of reaching your target audience (albeit very focused) is very small. Over 50% of cell phones are less than 18 months old and over 40% of them have FM radio capability according to newspaper reports. Looking at the street everyone has their headphones on (even while driving) or is reading the newspaper. The best way to get your word out is to market virally or advertise.