From problem of too few to problem of plenty…

During the dot com 'golden era' between 1998- 2000, India had less than 5 million Internet users and around 50 million phone users. There were various kinds of sites looking at chasing eyeballs to selling various products. Such was optimism at that time that business plans were almost an after thought. Main objective of an Internet business was getting VC funding. Not surprisingly, most of them folded up in the infamous Dot-com bust.

Cut to 2006, the situation seems to have reversed, this is the era of Internet 2.0 in India. There are 30-40 million Internet users and more than 150 million telephone users (More than 100 million are mobile phone users). Internet firms have matured, many online business models have got established. Dotcoms seem destined for a good run in their second coming. However, multiple players have cropped up in most of the spaces. Sample partial list of players in different spaces:

• Email: Almost a dozen players including horizontal portals like Yahoo, MSN to ISPs like VSNL, Airtel broadband etc.
• Travel: More than 15 travel players along with most airlines offering online ticket booking. I had written about this in an earlier post
• Horizontal portals: Yahoo, Rediff, Indiatimes, Sify, MSN
• News sites: Times of India, IBN Live, NDTV, Samachar, HT.com, Jagran
  Financial sites: Moneycontrol, Economic Times, Indiainfoline
• Shopping : Indiatimes, Rediff, eBay, Fabmall,
• Share broking: ICICI, HDFC Securties, Indiabulls, Sharekhan, 5paisa.com , Investmart
• Mobile VAS players: As per last count there are more than 3,000 short coded in India.
• Jobs – Naukri, Monster, Jobs Ahead, Clickjobs, Timesjobs along with a dozen smaller sites / aggregators
• Matrimonial: Shaadi, Bharat matrimony, Jeevan Saathi, Timesmatri.
• Real estate : 99Acres, Indiaproperties, Magicbricks
• Auto: Automart, Carwale, Cybersteering (Read more here)

With Online advertising also growing at 100% y-o-y, even eyeball chasing models besides commerce generating models have begun making sense when we compare it with the Internet 1.0 era.

Several players operating in the same spaces will surely lead to expansion and development of the market. This however triggers a key question-will all of them survive? I feel that over the next couple of years we will witness consolidation with only the top 3-4 players in each vertical surviving & more importantly thriving.

The key for survival and growth will be differentiated offering, better user experience and more importantly deep pockets leading to sustenance power.