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Tablets – Why Marketers need to move out of the “Tablet – a Fad” Perspective!

Posted in e-commerce, Mobile Computing, Mobile Data & Traffic by Manas Ganguly on April 11, 2013

For many of the marketers out there – there is not a great case for Tablets and Smartphones together. Most of them view tablets as a passing fad. This equation is perhaps complicated by the announcement of Phablets as a hybrid form and use factor! However, is Tablet really a fad?

A recent report published by the Adobe Digital Index is an eye opener. For February 2013, Tablets are attributed to be driving more traffic to websites than smartphones. The report is based on 100 billion visits to more than 1,000 websites worldwide over the last year – hence this isnt a fluke that you had blow over. Adobe attributes this shift in web browsing patterns primarily to the device’s form factor, which lends itself to leisurely (and more comfortable) browsing than smaller touch devices.

adobe-report-tablets-620x343

Listing down a key points on how and why Tablets are not a fad. They are here for good-
1. Frankly, with both WiFi Tablets and Entry-level Smartphones penetrating the $50 price point – the screen size is a big enabler for tablets.
2. As WiFi hotspot roll outs gather momentum – Tablets will push more and more of data.
3. So while Smartphone gathers numbers in the low end – it is the larger screen size devices (3.5″ – 4.0″ – 5″ – 7″- 9.7″) which will posssibly drive higher data consumption.
4. The customer at the economy end of connected devices ($50-$100) tends to use his device as a media machine – again for the $50-70 price – a tablet provides greater value than a 2.8″-3.5″ smartphone given the profusion of pirated content.
5. Tablets are also driving penetration across segments such as education, insurance for the large screen internet access advantage
6. For the Phablet space – this is a sub-category branching out into becoming a category by itself – but its numbers will take some building up – and the pricing still is $200 & above.
7. With tablet growth rates still well above smartphone growth rates, expect this gap to widen
8. Traditionally because of the higher screen size the engagement time on tablets has been higher than the smartphones as well.

Interestingly enough, in mature economies, Tablets have found yet another niche. Tablets are increasingly being used shopping activities.Adobe found that 13.5% of all online sales were transacted via tablets during the recent holiday season. Furthermore, as of January 2012, researchers found that consumers using tablets spent 54 percent more time per online order than their counterparts on smartphones, and 19 percent more than desktop/laptop users.

Adobe- report-tablets-1-v3-620x339

Thus the key take away from the Adobe report is this – tablets and smartphones are two different animals. Based on consumer use cases, one does not replace the other because mobile device owners are using tablets and smartphones to accomplish different tasks. This has implications on the way e-commerce companies as well as media companies and online content distributors would play up to serve the user. So this really gets into single device – multi use cases scenarios – all of is still building.

Thus i come back to my initial point – Marketers who are apprehensive of the scale and scope of tablets and are unable to fix “proper” answers to tablets, need to understand, there is no single answer… and the answers too are evolving at a fast clip! The risk that they run in trying to perfect the business cases and create understanding is that they could be left out of the markets. Proposition here is possibly not a case of inspiration but of evolution!

Google and the principle of more wood behind fewer arrows! ( Service Prioritization and End of Life)

Posted in Internet and Search, Mobile Computing by Manas Ganguly on March 19, 2013

Google prioritizes its products and services and while it is constantly innovating in different levels and layers of services – it is equally ruthless in chopping of products and services which donot support its strategic imperatives and directions.

googleaxe

From an outsider’s perspectice, the following principles are evident as a part of Google’s service End of Life (EOL) strategy.

1. Products and Services are shelved as and when a better substitute (in terms of delivery mechanism or service/customer experience) is in place
Examples include HTML over UiApp, 3D imagery (Street View) over Google Building maker, Android/Chrome over iGoogle, Youtube over Google Videos, Google Drive on desktop over Cloud Connect, Google Shopping over Search API and many more.

2. Axing stand alone services in favour of a platform approach
For Instance HTML5 over Voice App for Blackberry, Google Apps/Vault over Postini (and many more)

3. Inadequate or middle of nowhere solution!
Lack of success of Google Wave was attributed among other things to its complicated user interface resulting in a product that was a bit like email, a bit like an instant messenger and a bit like a wiki but ultimately couldn’t do any of the things really better than the existing solutions

4. Services that are simply non-core i.e it doesnot extend Google’s strategic imperatives
Google Classic Plus was a customization service that let people upload or select images to use as a background on Google.com. However, it really was noncore in terms of customer experience or service delivery. It was hence dropped.

5. And then there is Performance…
Google Health (inspite of all its promise) was axed as it was seen not having the broad impact that Google had planned. Same goes with Google Apps for teams as well.

Listed below are a list of services that have been chopped over the last few years – for not having made the Google cut – its a case of Google forever prioritizing and trying to put more wood behind fewer arrows

A list of services that Google has plugged out to focus on a narrower set of objectives and services

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Google- Internet usage figures 2012

Posted in Industry updates, Internet and Search by Manas Ganguly on January 19, 2013

Google has released statistics on global internet usage for 2012. According to the company the number of world-wide email users is at 2.2 billion with daily email traffic of 144 billion. Gmail emerged the most popular service provider with 425 million active users while Google’s web page and sites registered 191 million visitors as of November 2012.

The report shows the number of internet users worldwide stands at 2.4 billion with Africa coming in fifth accounting for 167 million of those. Asia is the leading continent in internet usage with 1.1 billion users followed by Europe with 519 million, North America with 274 million, and 255 million users in Latin America and the Caribbean islands.

The Middle East records 90 million users while Australia and Oceania regions account for 24.3 million users. The number of users in China alone is 565 million making it the country with the most users and internet penetration of 42.1 percent. On the social media platform, the report established Brazil as the most active country on Face book with 85,962 posts per month.

Worldwide face book had 1 billion active users as of October 2012, 47 percent of those being female and a user average age of 40.5 years. Twitter followed in popularity with 200 million users with 163 billion tweets since its inception and a user age average of 37.3 years. Google+ recorded 135 million users while Google recorded 1.2 trillion searches in December 2012. The report also establishes that 6.7 billion people were accessing internet through their mobile phones 1.1 billion of those through smart phones.

The number of mobile handsets was at 5.3 billion with 1.3 billion smart phones in use worldwide by end of 2012. 465 million android smart phones were sold in the same year. Google says it is almost impossible to capture all statistics seeing as the web has massive information but the prediction for 2013 is that people will rely more on the internet privately and professionally with more people using their mobile devices to access the internet while social media will become more significant to people’s lives as more use it not only for social networking but also to run their businesses.

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Internet in Indian context – The prime mover

Posted in Industry updates, Internet and Search by Manas Ganguly on January 11, 2013

If 2000-10 was the decade of voice, the current decade 2010-20 would be the decade of data. Over the next three years, data could more than double in size to a US$14 billion industry, contributing over half the incremental industry revenue and add 500 bp CAGR to an otherwise slowing voice industry. The economic payoff of a data-connected population would also be significant. A World Bank study shows every 10 percentage point increase in broadband penetration leads to a 1.38 percentage point increase in per-capita gross domestic product growth in developing economies.

With 121 million Internet connected consumers, India’s tally lags 565 million Chinese Internet users by more than some distance. However a 42% CAGR in Internet subscribers over a 3 year period from 2008-2011 provides ample reason to get excited about the Internet market’s potential for stellar growth in India. An industry study by Assocham and ComScore indicates that the Internet user base in India is approximately 125 million and among the BRIC nations, India has been the fastest growing market adding over 18 million Internet users and growing at an annual rate of 41 per cent.

India is one of the youngest online demographic globally with about 75 per cent of online audience between the age group of 15-34 years. Among the age segments, 15-24 years of age group has been the fastest growing age segment online with user growth being contributed by both male and female segments. The female population accounts for almost 40% of 125 million internet users – indicating that gender equality on the information superhighway is catching up.

Internet Growth India

The Assocham-ComScore report on Internet usage in India (october 2012) indicates – The top five popular categories accessed online are social networking, portals, search, entertainment and news sites.

Online travel has seen growth across all subcategories including car rentals, online travel agents, airlines as well as hotels and travel information sites.1 out of 5 online users in India visit the Indian Railways site.

Others waiting to benefit include companies offering Indians everything from online travel bookings, recruitment and matrimonial portals. The country’s Internet retailing market will reach $2 billion by 2014, with consumer electronics, toys and games growing the fastest, forecasts by Euromonitor show. Retail category penetration has increased to 60 per cent reach and has grown to 37.5 million unique visitors a month. The travel segment sales will grow at a compound annual growth rate of nearly 38% in five years from 2009, and total $5.7 billion in 2014, according to Euromonitor. Apparel has been the fastest growing subcategory in retail and reaches 13.4 per cent online users in India.

These are still early days for Data and Internet in India and there are many business empires and business models which would scale up with the rise of the internet and Always on real time data access. The Internet and data industry in india may be 10 years – but the big numbers are starting to build up. Watch this space.

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Taking the Internet Down – Factors and Ease of Effort

Posted in Internet and Search by Manas Ganguly on December 2, 2012

Can the Internet really be taken down? The recent blackouts at Syria and Egypt beg this question to be answered. Can Internet be engineered to fail abruptly and completely in certain regions of this world?

The key to the Internet’s survival is the Internet’s decentralization — and it’s not uniform across the world.   In some countries, international access to data and telecommunications services is heavily regulated.  There may be only one or two entities who hold official licenses to carry voice and Internet traffic to and from the outside world, and they are required by law to mediate access for everyone else. Under those circumstances, it’s almost trivial for a government to issue an order that would take down the Internet.On the flip side, this level of centralization also makes it much harder for the government to defend the nation’s Internet infrastructure against a determined opponent, who knows they can do a lot of damage by hitting just a few targets.

With good reason, most countries have gradually moved towards more diversity in their Internet infrastructure over the last decade. Sometimes that happens all by itself, as a side effect of economic growth and market forces, as many different companies move into the market and compete to provide the cheapest international Internet access to the citizenry. Even then, though, there’s often a government regulator standing by, allowing (or better yet, encouraging) the formation of a diverse web of direct connections to international providers.

How easy is it to disconnect the Internet- A World map.

How easy is it to disconnect the Internet- A World map.

Renesys – Internet Monitoring and Intelligence agency, lists out the risks of Internet black outs by countries and by the number f Internet gateways to the country.

  • 1 or 2 companies at your international frontier-  Classified under severe risk of Internet disconnection.   Those 61 countries include places like Syria, Tunisia, Algeria, Turkmenistan, Libya, Ethiopia, Uzbekistan, Myanmar, and Yemen.
  • Fewer than 10 service providers- Probably exposed to some significant risk of Internet disconnection.    Ten providers also seems to be the threshold below which one finds significant additional risks from infrastructure sharing — there may be a single cable, or a single physical-layer provider who actually owns most of the infrastructure on which the various providers offer their services.  In this category, there are 72 countries, including Oman, Benin, Botswana, Rwanda, Pakistan, Kyrgyzstan, Uganda, Armenia, and Iran.   Disconnection wouldn’t be trivial, but it wouldn’t be all that difficult.   Egypt falls into this category as well; it took the Mubarak government several days to hunt down and kill the last connections, but in the end, the blackout succeeded.
  • More than 10 internationally-connected service providers, but fewer than about 40, the risk of disconnection is fairly low.  Given a determined effort, it’s plausible that the Internet could be shut down over a period of days or weeks, but it would be hard to implement and even harder to maintain that state of blackout.     There are 58 countries in this situation, ranging from Bahrain (at the small end) to Mexico (at the largest end).   India, Israel, Ecuador, Chile, Vietnam, and (perhaps surprisingly) China are all in this category.So is Afghanistan, reminding us that sometimes national Internet diversity is the product of regional fragmentation and severe technical challenges.  It’s true; the government in Kabul is powerless to turn off the national Internet, because it’s built out of diverse service from various satellite providers, as well as Uzbek, Iranian, and Pakistani terrestrial transit.
  • More than 40 providers-  Extremely resistant to Internet disconnection.   There are just too many paths into and out of the country, too many independent providers who would have to be coerced or damaged, to make a rapid countrywide shutdown plausible to execute.   A government might significantly impair Internet connectivity by shutting down large providers, but there would still be a deep pool of persistent paths to the global Internet.    In this category are the big Internet economies: Canada, the USA, the Netherlands, etc., about 32 countries in all.

In many other cases, Physical pathways would be a limiting factor, even with multiple providers.  They are all sharing the very few long-haul fiber paths to/from a country which if taken out could lead to the black outs.

(This post is Inspired by a Renesys blog and quotes Renesys figures on the black out probabilities in nations)

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Beating Oppressive regimes – Social media as civil resistance

Posted in Internet and Search by Manas Ganguly on November 30, 2012

In an era where information and communication is getting democratized and is increasingly becoming a tool for repressed social classes to express themselves as part of intensive campaigns of civil resistance, Oppressive regimes have resorted to Internet Black Outs, Internet Censorship, Social Media/ Facebook/Twitter Censorships to snub out people’s voice. However, companies such as Google, Facebook, Twitter have worked on way-abouts to reach out to the people and help them reach out to the world media.

Today’s Internet blackout at Syria is one such example where Google has now started a call service to post tweets through a voice connection. Here’s how Google is helping people’s voice on Twitter. A great example of service to people!

Syria Blackout #2 - G+ Page

Syria Blackout #2 – G+ Page

Syria Blackout #1 - Google round about

Syria Blackout #1 – Google round about

On Twitter’s becoming the voice of people –  Post the Arab Spring, this is yet further proof of Twitter’s pre-eminence as a communication platform. In many ways it represents the kind of impartial, democratic, cheap yet scalable media tool that the Internet has always promised. Indeed, in many ways, Twitter has begun to function as a protocol rather than as a product.

 

What could be India’s next Killer app on Internet?

Posted in e-commerce, Internet and Search by Manas Ganguly on November 19, 2012

Internet was introduced to India in 1998 and over the last 14 years, Internet penetration has increased to 121 million (10.2% of India’s Population). India already is the 3rd largest country in terms of numbers of Internet users globally.

Internet Growth in India

The convenience of train travel booking through the IRCTC website is seen as a significant catalyst to the growth of Internet penetration across India (Smaller towns, Rural areas included) and the grand old-dad of e-commerce in India. India, which is a conservative society in terms of Credit card spends, has never shied away from spending for Railway tickets online. Thus IRCTC is in effect India’s first killer Internet App.

IRCTC – Number of tickets sold & revenue (2003-12)

For a geography and an economy such as India, Internet would in future, be the tool for deliverance of education, healthcare, governance, information and banking to the masses. There is enough and more focus and push from the government to increase internet penetration in the
country. So what then could be India’s next Killer Internet App? The basis of “killer app” is increasing the Internet penetration. This is how it could really start working-

1. Vernacular Internet – With the Indic scripts and other language technologies coming to the maturity threshold, Internet in India would follow a vernacular path to massification.

2. UID aided- The UID would be key to provide an identity to every single individual in the country which is stored centrally and accessed by different services (Banking, Loans, education, professional, travel etc). Adhar which means basis in Hindi would be the fundamental construct to empowering people of India

3. Financial Inclusion – The government currently is working on a Direct Cash Transfer Scheme (DCTS) as a part of the MGNREGS ( Mahatma Gandhi National Rural Employment Guarantee Scheme) – financial inclusion which would reach the population at the bottommost layers of the social and economic hierarchy. Alongside there would be others such as Payments, Banking, Money transfer etc.

Aadhar II

To me, these three aspects (Vernacular medium, Aadhar UID project and DCTS under MNREGS) coming together would form India’s next Killer App – which will enhance penetration across social levels, geographics and economical classes opf people. The Internet was the information super highway when it was designed. Connecting people to this super highway would be India’s next killer Internet App.

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Amazon – Future of digital distribution? (Part I)

Posted in e-commerce, Revenues and Monetization by Manas Ganguly on September 7, 2012

This is the first of two post series on Amazon

Amazon killed it … or very nearly did. Amazon’s device and service announcements in the 6th September event have just gone to show Amazon a few notches above Google, Nokia and Microsoft put together.

Post the launch of Kindle Fire tablets last year and a record sales in the holiday season, Amazon spent a lot of time understanding their customers and how the customers use digital media. In the course they have managed subverting the long held notions of device pricing – and managing the margins without any device contributions. After all, when you make your money through services, device margins are obliterated. That is going to put a awful lot of pressure on the earlier generation of device makers – Samsung, Nokia, HTC and the works. What that means is that Amazon is willing to make the Kindle and the Kindle Fire a loss leader to lure shoppers inside its virtual store. This principle is where disruption @ Amazon begins.

People don’t want gadgets anymore; they want services, and the new ranges of Amazon devices have a clear perspective- to provide a dedicated sales channel for Amazon’s digital storefront with an end-to-end set of services. By taking off the device bit, Amazon signals that it is ecosystems not devices that will drive consumer purchases. As Bezos puts it- “We want to make money when people use our devices, not when they buy our devices.” When business isn’t built on HW margins, the larger ecosystem and services you can do a lot of things competitors can’t – that’s an innovation principle that Apple and Amazon would hold as the key.

Amazon is stepping up ecosystem efforts but is focussing on its own features, services. Third-party apps still seem like an afterthought. Similar is principle to the Apple “Walled Garden”. Given Apple’s iOS app selection & large ecosystem of it’s own, I don’t think iPad is under major threat. But Apple cannot afford to be complacent.

The 6th September event was an act of declaration of war and the whole eco-system and market just got a whole lot more interesting in the course rebuilding the DNA of Amazon. The only other company who is thinking of business in the manner that Jeff Bezos is thinking about it, is Apple! As per Bezos – “We have our own patents, our own hardware, can afford to subsidize, and we’re going after Apple”. That’s setting the perspective.

In short, this is all about Amazon positioning itself as the future in digital distribution

Continued…

Rise of India’s Digital Consumer (Part I)

Posted in e-commerce by Manas Ganguly on August 27, 2012

One of my earlier post deals with the e-commerce industry in India at this point of time. This series of posts will examine  the rise of India’s digital consumer.    

There are 124 million Internet users in India today, a growth of 41% Y-o-Y, out of which, 20 million users are through smartphones and tablet computers. Acccording to eBay, this number is expected to grow  100% over the next one year with the number of such devices growing everyday. comScore also reports India to be the fastest growing online market amongst the BRIC countries and India’s explosive online growth story will continue because, most online categories in India currently show below average penetration compared to global averages. With 124 million internet users, India is at a 10% level internet penetration. In correspondence to the rapid growth of Internet in India, Forrester estimates eCommerce revenue in India to increase from $1.6 billion in 2012 to $8.8 billion by 2016 accelerated by the increasing penetration of internet on mobile and social media.

Now heres the dope- for a country which is supposed to be technology phobic or plainly donot have access to technology because of the economics, Over 94% of the evolved internet shoppers surf internet, 87%  of the users compare product prices online and 68% of them have made online purchase using their smartphones and mobile devices.

As Internet penetration and the smartphones and tablets price accessibility increases – this will lead to increase in mobile commerce (mCommerce) volumes in India. Online purchasing through
mobile phones is catching up fast in non-urban and rural areas and the ratio between rural and urban buyers would be 1:10 right now but it may go up to 6:10 over next two years. Consumer Internet shopping habit is now forming quickly with most of these users using their mobiles as a window to transact ‘anytime and anywhere’.

To be continued.

E-Commerce – The Intent would need to change from Valuations to Sustainability

Posted in Internet and Search, Revenues and Monetization by Manas Ganguly on August 16, 2012

While Flipkart and Snapdeal have soared as Consumer Internet mega-brands – there is something systematically wrong about the e-Commerce market in India. It is working on Valuations rather than Sustainability and thats not the one for long term.

Flipkart, Snapdeal, Yebhi, Myntra, Infibeam, eBay, Homeshop18 – the list of e-commerce companies in India has come fast much too fast and too many. The category is still only in its infancy stages with enough and more action waiting to happen. The 1st round of e-commerce action in India is in prime action. Most of these e-commerce portals are in the funding phase. What is concerning is the fact that all these portals seem to be promising the 3 same things – range, price and service. Heavily discounted prices , management of extensive product categories and extensive customer service could lead to a cash burn. If consumers buy only for cheaper prices, free delivery, soft trials/ no-questions asked returns and Cash on Delivery … then the question is, will anyone ever make money? I don’t think anyone has a good answer to that.

The key to the e-commerce objective is logistics management both inward and outward. Logictics in e-commerce fulfillment is the tail that wags the dog. And then there is inventory management. For a great customer service experience, an end to end integration is most advisable which means building up of infrastructure and adding headcount/overheads. (On the contrary, an outsourced supply chain will spoil the service delivery experience for the e-commerce portals. All Infrastructure/overheads would mean quantum leap in annual sales for break even. Incremental sales is one thing, Incremental profits in a heavily discounted category in a crowded market place is a chimera. The intent is to become the Amazon of India. Amazon relied on the funds from its 1997 initial public offering (IPO) to tide through the aftermath of the dotcom crash that took out most of its rivals. Without competition, it could afford to lose money on building infrastructure. It would take $2.8 billion in losses over six years before it declared its first quarterly profit in January 2002.

Unfortunately, the e-commerce market in India is heavily crowded – this doesnot offer the (pseudo)arbitrage opportunities that Amazon had in its time. Thus, the whole proposition of consumer delight only ends up burning cash and capital. As all industries there is consolidation waiting to happen even while most of the portals are trying to aggressively build up the valuations. Self sustaining business is taking a back seat in the game of valuations and investors really need to identify the horses for the long run. Else, this is one crash that is waiting to happen.

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