Network disconnect

Ashesh Shah
August 18, 2017
141 Views
1 Comments

Yaari, Ibibo, BigAdda, Indyarocks, Fropper, Desimartini…. The list does not end here. But many of these India-based social networking sites (SNS) which launched their high-decibel marketing plans four to five years back seem to have reached a dead-end.

Though these sites have been popular with some die-hard users, it is internet giant Google’s social networking site Orkut that has constantly topped the popularity charts. In 2007, HT Media’s online subsidiary Firefly eVentures too entered the fray and paid around US $10 million or roughly Rs 39 crore to acquire Desimartini from Vivek Pahwa, an alum of Indian School of Business, Hyderabad.

The deal brought the social networking sites again in the spotlight, but experts commented that the company was paying too high a price for a business that’s yet to develop a revenue model! In 2008, Facebook started growing its base in India. And in a matter of one and half year, its user base started to rival that of Orkut.

Today, as per audience measurement website Vizisense.com data, Orkut is India’s number one SNS with a 33% reach and 15.3 million unique users. It is followed by Facebook, with a 27% reach and 12.6 million unique users. The only two Indian websites that make it to the top 10 list are Ibibo.com and Bharatstudent.com, with 6% and 3% reach, respectively.

The data itself says a lot about the social networking sites in

India. In fact, some of the sites seem to have upset their loyal users. Take for example, Yaari.com. The website which was started by Stanford University graduates Prerna Gupta and Parag Chordia, is the subject of scores of spamming related complaints in the web world.

Minglebox, one of the early entrants to the scene today is no longer a social networking site. “It was clear to us that a generic social networking will not be sustainable with global players dominating the market. We started as a social networking site but we noticed a lot of activity on the site regarding education. And when we moved to a pure education site, the student community stuck with us,” says Kavita Iyer, founder and CEO of MingleBox. Today the site has over 3 million registered users. The owners perhaps understood the game and morphed into a pure education website.

The challenges

SNS have arrived in numbers, but not in terms of cash, says Vikram Bhardwaj, CEO, eStatsIndia.com, a information and business research consulting firm. One of the major barriers to the growth of Indian SNS is language. The huge English speaking population has propelled the growth of IT enabled services in India, but this very advantage forces Indian companies to compete with global players in the SNS space. “The moment an individual here logs on to the net, his preferred language becomes English. This is not the case in other countries,” says a top executive of one of the companies who did not want to be named.

For example, Japanese SNS Mixi has more than 80% of the SNS market in Japan. There are similar examples of SNS sites in other languages across the world�Russian, French, Chinese, Korean, etc. In India, that is not the case. In addition, while the cost for developing and maintaining the site is same for any player, the economic values of user is far lower in India (the per user revenue is far lower in India). “On an average, the pay per page view is anywhere between 4 to 10 paise,” says the executive.

The rise of social media

With just 47 million internet users in a country with a billion-plus people, the internet is still small compared to the traditional media�TV, print and radio. But the profile of the users, the ease of measurability of audience over the net coupled with the growth potential over the next decade has generated enough interest among marketers.

In 2010, the total advertising spend on the digital space in India is likely to cross Rs1000 crore. While the tradition forms of engaging customers on the digital platform–websites, display ads, etc., remain, Indian companies today are also incorporating social media into their marketing strategy.

Take for example, India’s aviation sector. Private airlines such as SpiceJet are focusing on the social networking sites to create content and interact and engage with the customers. The company says it has more than a 1000 followers on sites like Facebook and Twitter. Through the groups, the users are told about the promotional offers, and in turn, they can share their experiences and give feedback.

“Our focus has been to leverage these outlets and engage consumers, and, get them to interact with the brand. This is strongly supported by our belief that customers don’t want to be mere consumers anymore,” says Anish Srikrishna, senior vice-president-marketing, SpiceJet.

This is a strategy that has been enthusiastically adopted not just by other airline companies such as Jet Airways and Kingfisher Airlines, but companies in other sectors too. But the point is that their presence is largely limited to Facebook, Orkut and Twitter.

“Reach is the singular factor that drives this decision. You will be able to see Alexa’s tables of top sites in India which drive this decision. As a secondary is functionality, if there is something special on the platform that is not available on a broad reaching platform we will still consider it if the proposition is unique enough,” says James Sandberg, social media strategist for Diageo India, the Indian subsidiary of global liquor major Diageo.

Down but not out

The players in the SNS space are not giving up so easily. “As broadband grows, local social is a bigger opportunity,” says Ashish Kashyap, CEO, Ibibo. The social networking site which started in 2007 has launched social gaming which has given the company good traction. Besides online ads, value-added service and e-commerce are also revenue generators for the company.

Another player in the space, Reliance ADAG owned BigAdda, offers rich media content and blogging opportunities to its users. It created a lot of interest by roping in Bollywood actor Amitabh Bachhan to write a blog on its site. “We started to look at differentiation. In addition to blogs and rich media, we started the first online reality show,” says Shivanandan Pare, CEO, Big Adda. It expects to garner not just more users but also revenues from its reality shows.

Indyarocks too says it offered user and premium content to its members. The company says the growth of Facebook and Orkut has not hurt it but rather helped it grow. “We have recently opened up our site for cross platform interactivity due to which users on our site can seamlessly share content with their friends on Facebook and vice-versa,” says Kalyan Manyam, CEO, Indyarocks. The company claims to be profitable.

While these companies are putting up a brave front, and tweaking their business models to survive, with Facebook setting up its office in India it will not be an easy ride. The team that has been set up in Hyderabad will focus on advertiser, user and developer operations. “India’s innovative and tech-savvy environment inspires us to invest heavily here, from working closely with mobile carriers to create streamlined Facebook applications, to sponsoring a Developer Contest in 2009, which rewarded Indian developers for their creativity in creating applications and Connect integrations”, says Meenal Balar, international growth manager, Facebook.

People Group, which owns Fropper.com, while “pleasantly surprised” at the growth of Facebook, does not really see it as a negative thing. “Our research indicates that our members have become adept at managing multiple networks simultaneously, and we see this trend continuing to grow as connectivity across multiple networks increases,” says Gorav Rakshit, group head, digital media, People Group.

“It is difficult to make money in the social networking space,” admits an executive from an Indian SNS who did not wish to be identified. But then the players are still optimistic. “Internet is an evolving and dynamic space. It is not easy as the target is moving continuously. If one can evolve fast then one can succeed,” says Pare.

Resource:
yahoo News

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