Marketing in Rural India

Few days back, I just had a short chat with one of the co-founders of an IIM-A's Iaccelerator startup and our conversation diverted to an article that was published in Outlook Business. The article tells about how a simple SMS is helping the Indian farmers plan their farming better and in turn helping them generate more profits.

Just came across a very insightful presentation which talks about why rural India is so important & how one can tap the rural market. The most interesting point from the presentation is the statistics about Rediffmail -

Out of 20 million Rediffmail signups, 60% are from small towns. 50% transactions from these towns on Rediff shopping site.

Gogola : Because it's not Google

Last week, I was holidaying in my home place - Mumbai and we went out shopping for my marriage which is due on 23rd November, 2009. We were shopping at Bandra which is considered as a very posh place & there we can across a small chat [चाट] outlet. With the scare of swine flu, customers normally avoid from going to such places and this is where it becomes important for the shop owners to win back the customers confidence.

But what if, we use a household name to brand our small product. This is what MIGHT make the customer to purchase & use the product. And the chat outlet did exactly the same. The brand which was used was none other than Google and the product - Gola [गोला] was named Gogola, some interesting pictures below:

Considering that Internet explorer is the most widely used browser in India, using it effectively would be considered as "Another feather in their cap". Just like the glass, the menu card was also shown in a very geeky manner in an IE window [picture below]:

I had a chat with the shop owner and he told that "They came out with this strategy mainly to get customer's confidence" and as Google & Microsoft are household names[no matter you use them or not, but you definitely know them] using them ignites a spark in the customer's mind. This trust indirectly builds the Gogola brand.

This is a lesson from a small time shop owner on "How a product can become a brand, sometimes by smartly re-modeling an existing brand".

WOM is very important for startups - Amarjit Batra, OLX India

In the previous article, we spoke to Amarjit Batra, country manager of OLX India on OLX, Marketing, Online Classifieds etc. In this episode; we speak to him on Web, Startups, Entrepreneurship. Hope you enjoy the interview.

What are some of the Web 2.0 features that OLX promises to it's users ?
OLX is a Web 2.0 product and users can easily design rich colorful listings with pictures and videos and display their listings on their social networking profile [Facebook, Myspace].Some of the features that make us different from others are:

• 100% free (forever) even in jobs and real estate
• Ability to include videos and pictures in listings
• A city, neighborhood and zip code database so the entire country is covered and not just pre-selected cities
• Ajax "WYSIWYG" rich-text editor for richer listings
• Ability to comment on listings to create a stronger community
• Advanced search functions with sliders allowing searches at variable regional settings
• A distance field allowing you to see postings near your zip code wherever possible
• Ability to post listings in any language in any country
• Ability to view the site in any country in any language
• Global reach
• Mobile version: The mobile version http://m.olx.in is unique as one can do everything that can be done on the web

Currently OLX is only in English, do you plan to release for other Indian languages considering the penetration of internet in India ?
Actually, we are present in English and Hindi as of today. You can check the Hindi site at http://www.olx.in/hi Going by the India Internet reports, it is evident that local language consumption on internet is on the rise and could possibly drive the future penetration of Internet in the country. We would like to gain some traction in Hindi before launching other Indian languages in the country.

There is strong likelihood that local languages consumption would be driven by Mobile internet. OLX site is already accessible on the Mobile through our WAP offerings http://m.olx.in and having other local languages on mobile would help.

During this time of recession, one important thing is Cutting/Managing Costs? How is OLX doing the same ?
OLX is a 3.5 years old company. By the nature of our business model, we are very scalable and have a lean team of 125 people managing our sites in 90 countries.

Keeping the recession in mind, we are focusing on efficiency and optimizing spends. Business wise, we are in a growth phase and we have been busy expanding our footprint across the globe. Therefore, we do not shy away from spending if the opportunity is good.

Where do you see OLX from 3-5 years down the line ?
In 3-5 years, OLX should emerge as the preferred destination and a strong brand in most markets where we are focused. We will continue to innovate and provide the best classifieds experience to our millions of users and hope to become the largest classifieds site in the world.

Can you share some tips for the budding Entrepreneurs ?
I feel budding entrepreneurs should look at the following before getting into a start up

• Are they really passionate with the idea and willing to commit long term to making it succeed?
• Who are they going to work with? It’s important that the core team is experienced and have complementary skills. Even the VC’s prefer ‘a good team with an average idea’ to ‘an average team with a good idea’.
• Entrepreneurs should be clear about their business model and have a monetization plan in place, even if the initial phase is experimental and does not fetch any revenues
• Flexibility and adaptability are traits that could differentiate between successful and failed start ups. Sometimes start ups struggle initially but adapt and tweak the model to the market conditions to succeed.
• Keep experimenting new ideas or new ways and
• Always ask your network of friends and acquaintances for support or ideas. Do not underestimate the strength of the weak ties.

How important is marketing aspect in Web startup & can you share some tips with us ?
Marketing is important but considering that most web start ups are constrained with cash, one cannot expect to spend huge sums on marketing campaigns.

Marketing tools that work best for a web start up would be SEO, Partnerships & Alliances, promotions, social media marketing and community driven marketing. SEM should be also be considered depending on the marketing budget.

A good product acts as a marketing tool too. The word of mouth from users takes over the job of marketing and most successful web companies have been built this way.

Where do you see the Future of Web, since Mobile & Web [Real Time Web] are converging ?
I believe that the Future of Web is mobile. It’s much more personal, convenient and accessible 24/7 and mobile is surpassing the PC penetration in most developing economies. 3G accessibility, smart phones pricing and penetration will play a key role in translating this potential into a reality. The dynamics of this market should change two to three years from today.

When do you feel is the right stage an Entrepreneur should approach a VC for funding ?
An Entrepreneur should approach the VC for funding when most of these conditions have been met

• The Company has been incorporated and business has been launched
• The Founding team is in place, but there is a need for addition of talent in senior and middle management to set up the team for the next phase
• The business model has been tested with the first set of clients or markets and the expansion needs cash infusion
• Business needs to build the critical mass quickly to get the first mover advantage, or is in a situation where the barriers to entry are low
• Have the business plan in place for the next three to five years and the execution of the plan requires capital or manpower

In some cases, the Entrepreneur can get funding at start of the venture. This is most likely in cases when the Entrepreneur has proven experience or the business model or sector excites the VC to take the initial risk. These cases are few in number, so it’s better if the entrepreneur is prepared to rough it out on their own for the initial phase of six months to a year.

Final parting words...
I would like to share a Les Brown quote I really like

"Shoot for the Moon. Even if you miss, you will land among the stars"

Print classifieds will eventually die - Amarjit Batra, OLX India

Online classifieds has been a growing business and is expected to grow 100% YOY. Be it marriage, Real Estate etc, all of use either of these services in day to day life. In this article, we speak to Amarjit Batra, Country manager of OLX,India which is 100% FREE classifieds site.

The interview is divided into two parts, with this one focusing on OLX, Online Classifieds, Marketing etc.

Before starting off, can you give a small pitch about yourself & OLX ?
OLX is a next generation classifieds site present in 90 countries and 39 languages. We are present in India on web http://www.olx.in as well as mobile http://m.olx.in. There is an option to use OLX India site in English as well as Hindi. We are live in most Indian cities and we already have users from 900+ cities in India. OLX is 100% free to search, list and transact. We have all the key classifieds categories like Jobs, Real Estate, Cars, For Sale, Matrimonial, Services, Education and Community. OLX has integrated many Web2.0 features to the product and we aspire to be good in every vertical.

I have been in the internet space in India for the last nine years and am a strong believer in the online marketplace model. India is an important market for OLX, and I hope that we can make a difference to the lives of the Indian populace through our Free Classifieds site. I am delighted to be a part of the OLX Global Classifieds team and join them in this exciting journey.

How big is the estimated classifieds market in India ?
India is young classifieds market, but there is a lot of potential. As per estimates, the size of the online market is Rs. 800 to 900 crores.

How different is OLX from other competitors like Sulekha, Sify Classifieds etc.
First of all, we are a free site. Yes 100% free! And we want to keep our core site free forever. Our major difference with vertical category sites is that we are present in many categories- Jobs, Real Estate, Vehicles, Matrimonial [only in India], For Sale, Services, Classes, and Community.

Being a local site, we are today present in all major cities in India, whereas the rest of the sites are focusing on few cities only. The other key differentiating factor is a user friendly mobile version of the site http://m.olx.in on which one can do everything that can be done on the web version. We are also present in other languages like Hindi http://www.olx.in/hi/ that gives us a wider reach.

Being a Web2.0 product, users can easily design rich colorful listings with pictures and videos and display their listings on their social networking profile [Facebook, Myspace etc... ]

Unlike others, we are a global classifieds site network with a local presence in India. Being present in 90 countries and 39 languages gives us an international reach and we do continuous improvements on our product and features.

OLX has presence in many countries, how different is the Indian market from market in US/elsewhere ?
Indian online classifieds market is quite different from US, primarily in two ways.

• Online classifieds in India have grown through vertical sites in jobs, real estate and matrimonial unlike US where the biggest classifieds site is Craigslist, a horizontal site.
• US online market has been the harbinger to the shift from print classifieds to online classifieds and it’s been happening in huge way recently with many print dailies getting out of business. Contrarily to the US and Western Europe, the newspapers in India are still growing in circulation. As a result the print classifieds is also growing.

The online classifieds industry will eventually cross the print classifieds through the sheer reach, flexibility, cost effectiveness and ease of use for both advertisers and searchers, but it will take some time.

India is difficult to cover by a single medium or a single language. It was print earlier, but Internet has shown a good growth recently and mobile is going to become important in the future. Similarly, English readership is limited in our country and to fully cover the market, local language options would become increasingly important.

You have worked with EBay(India) & other B2B,B2C based companies ..What changes have you seen in the market since that time ?
Internet has changed the way we search and buy products and services. The online transactions in India might not be huge today, but the search starts on the internet for a lot of us. With Mobile internet gaining popularity a lot more people will exposed to Internet.

In the last few years, the online classifieds market has evolved in many ways. I have seen the following trends in the Indian market:

• Increased awareness and preference for online classifieds. There has been a increased awareness among the internet users now, whereas earlier, a lot of time and effort was being spent by online classifieds players in educating consumers and businesses on the benefits of using classifieds.
• Rise of the Horizontal Classifieds Sites. The market is moving from vertical category sites to horizontal category sites. Even the players who were earlier in one category have launched other verticals or their own horizontal sites
• New categories becoming relevant online. Jobs, Real Estate and Matrimonial have been the top draw categories and continue to remain so, but there are other categories like Vehicles (Auto), For Sale (e commerce categories), Services and Classes (Education) that are also driving considerable interest among consumers.
• C2C users now have a platform to trade. Online classifieds has been a shot in the arm for C2C transactions in India and filled a huge gap. If you look at US also, C2C was earlier captured by eBay but a lot of it has now shifted to Craigslist. If an individual is looking to sell his car, give his flat for rent or look for paying guest, sell old furniture, offer tutoring services etc, online classifieds is now a preferred option to advertise.
• Boon for SME’s. As a country, India is on a growth path and the large numbers of micro and small entrepreneurs starting their businesses or facing the onslaught from competition are increasingly looking at advertising options that are free or low cost. Online classifieds provide them with a local as well as a national reach and it’s free.
• Internet is going local. Most trades, transactions and exchanges happen within a city or town and local online classifieds have gained traction since the last few years.
• Emergence of the Mobile Internet. Internet penetration in India has been constrained because of broadband and PC penetration where as Mobile penetration has been explosive. People are beginning to realise the ease of access of Internet through their mobiles and in many cases they are having their first exposure to internet through a mobile handset. Online classifieds on Mobile are gradually gaining traction and with the rapidly growing mobile internet users, it could be a large chunk soon.

OLX recently got 5 million funding from Nexus(India) , how difficult is it for startups to raise money at this point of time ?
It’s definitely tougher to get funding nowadays. However, if the team and the idea is good and the initial business results have been demonstrated, I am sure funding would be easier to come.

Craigslist is very dominant in US, how does OLX plan to compete with it's popularity ?
OLX is more popular in markets outside of the US. We are doing quite well in Mexico, Spain, Portugal, Russia, Latin American countries and India. In US, we have been encouraged by the response we have got.

Our differentiating factors are that we are focusing on product and business model innovation. Craigslist charges for jobs, real estate and other categories in certain cities, whereas we are 100% free to post and intend to remain free to post. We feel that charging limits the number of ads on the site which is a detriment to the user experience. We want our users to find whatever it is they are looking for.

From a product perspective, we aspire to be as good in every vertical as the best paid vertical sites. Already we have a number of innovations relative to many of our competitors:

• We have a fantastic mobile version such as http://m.olx.in reachable from any cell phone.
• We allow users to promote their listings automatically on social networks.
• We have a rich WYSIWYG editor allowing users to create colorful postings without knowing HTML.
• We support photos and videos.
• The site is multilingual even within countries with 39 languages supported.
• We have powerful search functions in real estate and cars.

If OLX is completely free, what is the revenue model of OLX ?
We are having text ads (currently provided by Google) as the only monetization option. Our core site will always be 100% free. However we have launched 'Featured Listings' in few countries that allows users to get prominent placement on the site. This is certainly a value add to the advertisers, without compromising on the free listings that one can still post. We do not have any immediate plans to introduce this in India.

Our mobile site http://m.olx.in is also completely free for users. The mobile site has a banner or text ad on top and bottom of each page and is monetized through ad networks.

If you have any questions for Amarjit, kindly leave them in the comments and we would add them in the Part (II) of the interview.

What makes a winning CULTURE ....

There is a general tendency of we humans to compare whatever we can. One thing that gets compared first when someone joins a new company is the "Company Culture". Culture becomes SO very important especially if you are a startup.

Just came across quite an interesting presentation that describes NetFlix's winning culture especially focusing on it's core points which are listed below:

• Values are what we value
• High performance
• Freedom and responsibility
• Context, not control
• Highly aligned, loosely coupled
• Pay top of market
• Promotions and Development

As you can see it is more for reading than for presenting; hope you enjoy reading the same.

Thanks to JoeManna for the tweet

Why should you work for a startup

As an Engineer, all of us wanted to work in companies like Infosys, Wipro, Satyam Mahindra Satyam & many other so called Indian MNCs. However, times seem to have changed now due to accessibility to lot of resources available on the internet & some credit also goes to the change in our mindset. Startups have really become a buzz word & guys don't feel shy that they are now working in a startup !!! In fact, many of them even prefer working in startups than working in MNCs.

As per the recent update in my LinkedIn profile, last 2 years provided me with the best learning(s) in my professional career and it was entirely in startups. In fact, I was thinking of an appropriate title for this article and one which struck me was "Why should you AT LEAST ONCE work in a startup". Each one of us have a reason to do or not to do a thing, so if you are interested to work in startup than the following reasons may help you to decide "Whether you should or should not" ....

Entrepreneurial litmus test
If you aspire to be an entrepreneur, it is very important to work in an early stage startup or should we say "To pass the litmus test". There are MORE ups & downs in a startup which not only teach you to deal with difficulties but also help you understand yourself better. As for me, startups have taught me to survive on less money & also to understand "Whether I can myself startup sometime?". Working in a startup becomes the very first step to look within yourself & say "Can I do it?"...

Relationships Matter
In a startup, it becomes difficult to isolate from the startup community which in turn teaches the Art of Networking. This not only helps to build the startup's brand through WOM but also to network with fellow startup guys. Not to forget relationships inside the office; it is very important to keep best of the relations with every person inside the startup as well since, you cannot stay isolated neither inside nor outside your startup. It is a small world and you never know when you would again work with your colleague

Learn to save[for present & future]
There is a famous one liner "It's all about the money honey". Every person in a startup always hopes for the best but is prepared for the worst.In other words, once you enter the startup arena, the first to do IMHO is to become a bit stingy and keep check on your finances. Hence,a startup would also turn out to be a finance institution !!!

Contribution
If you are a person who is interested in multiple things [being an expert in one], your startup may become "fuel to your interest/passion". Since the barriers are low in a small company, it becomes easy to contribute in multiple areas & prove your passion eg. Engineer with an inclination to marketing can help market the service/product which might be impossible to do in an established company.

ONLY results matter
Big corporations focus on the process along with the results however, startups look out only for results. Hence, if you are a fresher looking out for some interesting work, startup would give you the push-up and later on MNC would give the necessary branding. Startups are less hierarchical and more result focused.

Bootstrapping
As mentioned before, startups help to bring out your other qualities some of which you might have never exploited !!! This helps you master the Art of Bootstrapping. This would become an important step not only when you startup but also when you are in a crisis situation[like the current tumbling economy].May be sometimes, it becomes necessary to be "Jack of ALL trades than be a master of NONE"

If you have some more reasons to share, please leave them in the comments and it would be added to the article.