It almost seems like they are in sync, Dancing if you may. The way we interact with machines in the neat future is going to be radically different.
This post originally appeared on the AFP newswire and has been picked up and published in multiple news outlets across the globe
by Staff Writers
Mumbai (AFP) May 8, 2013
It is seen as a land of entrepreneurs, economic growth and huge business potential, but India appears to be failing its promising startup companies which are struggling to find investors.
While there is no lack of ideas among the country’s vast young population, funding is declining from venture capitalists and rich “angel” investors, as they are known, who are often crucial to a young firm’s success.
“Risk-taking appetite from investors is low,” said Internet entrepreneur Nameet Potnis, who is trying to address the problem by setting up Nurtured.in, a platform to connect startups with early-stage investors.
“It is easy to set up an online business in India but very difficult to do business,” he told AFP.
Three decades after businessman N.R. Narayana Murthy and six other Indians sat around a kitchen table and formed leading IT outsourcer Infosys, the country is yet to create a favourable business environment for new entrepreneurs.
Just five percent of thousands of Indian startups get funds from sources external to friends and family, analysts say.
It is one of the toughest countries in the world for a startup to flourish, according to a 2012 report by US-based research firm Startup Genome.
Venture capitalists invested $1.09 billion through 222 deals in 2011, but this dropped by 30 percent to $762 million through 206 deals in 2012, according to researchers at Venture Intelligence, based in southern Chennai city.
The decline could not come at a worse time for the young Indian professionals and business graduates who are risking branching out on their own, after losing or quitting lucrative jobs amid the global downturn.
India’s own economic growth slowed to an estimated 5.0 percent for the fiscal year that ended March, its slowest rate in a decade, but that has not deterred many youngsters from trying to turn their ideas into businesses.
Some of India’s well-established startups include Nasdaq-listed online travel firm makemytrip.com, shopping website Flipkart and digital entertainment company Hungama.
In recent years, ventures have branched into areas as varied as pet care, gaming, restaurant guides and e-learning, and the startup bug is spreading into smaller Indian cities.
“More companies are coming up and not that much… money is being put in,” said Sampad Swain, an entrepreneur who founded “Instamojo”, which helps to sell digital downloads.
Jubin Mehta of Yourstory.in, an online site which tracks startups and entrepreneurs, said venture capitalists tend to look over 200 ideas before investing in one.
“Roughly 500 startups come up each month. And less than five percent — only about 25 — receive external funding,” he said.
Kulin Shah, an entrepreneur and former venture capitalist, said angel investors have become more demanding in the current economic climate, trying to avoid getting their money blocked in ventures for too long.
Angels are increasingly unwilling to fund firms that are clones of foreign startups or face intense competition, such as online car rentals, car pools and best-deal ventures, Shah said.
But too much caution can prevent investors spotting a hit, such as Nischal Shetty’s Twitter application “justunfollow”, which has more than three million registered users including 10,000 paid customers.
When he set it up three years ago, he generated revenues from day one despite a lack of enthusiasm from external investors.
“Angels asked me: how will you make money from this?” he said.
There are a few signs of hope for budding entrepreneurs.
In southern Kochi city, a massive glass-and-metal campus called “Startup village” is nurturing young engineers and aims to launch 1,000 Internet and mobile firms in 10 years.
Nasscom, an IT trade body, says startups are a “critical pillar” of the industry and last month launched “10,000 startups”, a programme which will shortlist and help fund as many ventures in the next 10 years.
“We have to create an environment where early-stage funding comes in,” Nasscom president Som Mittal said at the programme’s launch.
Millward Brown, has released its annual top 10 digital and media predictions, highlighting growing trends in the media sector.
They expect 2013 to be another dynamic year for online display, mobile and social media. Consumers have ever higher expectations of intelligent digital advertising approaches, and marketers will need to deliver more sophisticated campaigns to keep pace with what works.
You can view a detailed interactive version of the top 10 digital and media predictions on the Millward Brown website.
1. Facebook‘s monetisation drive will provide new, richer advertising opportunities for brands.
2. Social media listening evolves from monitoring to insight.
3. Emergence of ‘mobile remotes’ make it a central pillar of smart communication plans.
4. The great paywall makes for scarcity of premium eyeballs.
5. Omnichannel marketing helps brands build on meaningful moments of engagement.
6. Social TV grows up and becomes part of the narrative rather than a conversation about the narrative.
7. Mobile advertising in Africa tackles the smartphone divide.
8. Greater collaboration needed to make the most of real-time optimisation.
9. Better aligning of online display with objectives.
10. More meaningful mobile engagement via apps and actions.
See the complete report below.
To explore these predictions in more detail, click here to download a Pdf copy.
Source: Millward Brown
Note: This article originally appeared on Lighthouseinsights.in as Facebook Gifts, Will It Impact Indian Social Gifting Startups?
Last month Facebook made a quiet re-entry into its previously mildly successful segment ‘Gifts’. Back in 2007, Facebook had introduced virtual gifts which could be sent to a friend for any occasion, these gifts cost anywhere between $1-3. In 2008, Jeremy Liew of Lightspeed Venture Partners had quoted, “Since there were 322 gifts available for sale when we completed our last survey (Jan 8th, 2008), that implies that Facebook is selling just over 270k digital gifts per week. At $1 per gift, that implies an annual run rate of just under $15m.”
This time around, in 2012, Facebook has managed to take the gifting business one step further and facilitate offline gifts. How exactly did Facebook manage this? Besides its vast resources, Facebook has managed to scale Facebook Gifts across its platform by building on the expertise it acquired through its acquisition of Lee Linden and Ben Lewis’ Karma app.
To begin with, Facebook has decided to limit the value of Gifts on its platform to below $50. “Fifty Dollar deals sound like a small portion of the eCommerce market”, says Yariv Dror, StoreYa.com (Facebook store platform provider) CEO, “but our numbers show, that 57% of the millions of products that have been imported to Facebook using our platform match this figure of $50 and below.
In September, I did a post on Social Commerce and where it was likely to be heading.
Facebook Gifts and India
By entering the physical good space, Facebook will not only be competing with retail giants such as Flipkart, eBay and the hoards of other ecommerce companies in India but against a multitude of startups like Badhai, 99presents, Giveter and so on. Badhai allows users to send gifts vouchers to their friends; they have recently added group and social gifting. 99presents helps you find products your friends from across different eCommerce sites like Amazon, Flipkart, Etsy, ThinkGeek, etc. While Giveter recommends gifts based on its own secret sauce and the recipients’ Facebook likes.
For those who want to ride the Facebook Gifts wave here in India, as of now there is no news on when the feature might launch in India but Facebook is accepting proposals from Vendors who might want to sign up to offer products as a part of Facebook Gifts. If you want to sign up as a vendor, you can do so here.
India has a substantial number of Facebook users and the model that Facebook Gifts follows might make it relatively easy for them to penetrate the market rather quickly. Facebook does not have the delivery logistics that Flipkart does. Hypothetically, this could be a possible hindrance for Facebook Gifts to grow. How do they overcome it? They ask vendors to sign up, these vendors already use their own logistics providers, and Facebook only brands the gifts for e.g.
[Image credit: Techcrunch]
Facebook gifts hasn’t launched in India, yet. And when it does, instead of looking at its impact on companies in social gifting space in India, I believe it could have a significant impact on all ecommerce segments in India.
Further to its commerce ambitions, Facebook has also launched a new feature called Collections which is currently being tested with certain select brands like Pottery Barn, Wayfair, Victoria’s Secret, Michael Kors, Neiman Marcus, Smith Optics, and Fab.com All Facebook reports that Collections enables Facebook users to not only like, but collect, want, or buy products that brands share through images on the social network.
Would love to know your thoughts about the new features Facebook has recently added.
- Facebook Gifts: Now On IOS Devices (allfacebook.com)
Social commerce has a simple value proposition, i.e. it makes it possible to measure and manage word of mouth.
Multiple studies into this subject have thrown up some interesting findings
- 62% of online shoppers have read product-related comments from their friends on Facebook
- 75% of shoppers who read social sharing comments have clicked on the product link in their friends’ Facebook posts, taking them to the product page on a retailer’s website
- 81% of consumers who purchase products they learn about through social sharing are valuable social sharers themselves, thus creating a cycle of sharing and buying.
- 32% of visitors are more likely to stay and shop on a site that shows activities of shoppers who have purchased there.
What this study shows is that social commerce is that social media content can generate strong word of mouth which can be manoeuvred to generate sales.
The power social commerce can be understood using referral economics of word of mouth. Let us take an example of Apple Computers to understand this better
Facebook and social commerce
Forrester Research’s Gina Sverdlov has done an extensive study on THE FACEBOOK FACTOR – Quantifying The Impact Of A Facebook Fan On Brand Interactions. According to her, “Using regression techniques, the study provided evidence to support the insight that your Facebook fans are more your most valuable customers.”
(customer value = purchase value + referral value)
“Specifically, the study found that fans of a range of brands (the study focused on Coca-Cola, Blackberry, Best Buy, Walmart) are significantly more likely than non-fans to
- Consider buying
- Purchase (79% vs 41%)
- Recommend (74% vs 38%)”
What is equally important to understand here is that boosting the number of fans on a Facebook page (Hilariously chronicled here: Arre Sir, We Will Get You 2250 Fans. That’s Our Headache!) isn’t the solution to exploring the commercial aspect of your page.
While dealing with Facebook fans always remember:
- The power of the Like button is not that it creates fans, it IDENTIFIES them.
- Your Facebook page is like a honey-laden flower that ATTRACTS your most valuable customer and lets you target them.
Instead, reward your fans. Use your page to drive up engagement.
- Why Social Commerce Rocks and FB Storefronts Fail (jonburg.com)
- The new rules of social commerce (tech.fortune.cnn.com)
- Social Commerce: Leveraging the Consumer Evangelist (aaramshoppro.com)
- eBay Acquires Svpply To Solve Its Social Shopping Problem (fastcompany.com)
India’s most famous E-commerce company Flipkart (they aren’t the biggest, that would be mjunction) has been around since 2007. Over the last 5 years, they have emerged as a clear favourite among customers owing to their almost delightful customer service.
Indiamart introduced Cash-on-delivery back in 2001 and then discontinued it in 2003. Flipkart reintroduced Cash-on-Delivery and this feature has now become one of the most crucial payment methods for Indians shopping online.
The point here is, back in 2007, Flipkart started with selling books online. Five years later it has steadily scaled its business by foraying into categories like computers & peripherals, CDs & DVDs, games, home and kitchen appliances, mobile & accessories, personal and healthcare equipments ( I am sure there they have added more recently, the latest being baby products).
Indians can be frugal by nature, and getting deep discounts with the added benefit of free home delivery drove Indians to shop online. Along the way, Flipkart managed to delight its customers with fast deliveries.
Now in the 3rd quarter of 2012, things look different. Flipkart now wants its customers to shop for a minimum of Rs 300/- to avail of free delivery (Flipkart website – How much are the delivery charges? Flipkart provides free delivery on all items if your total order amount is Rs. 300/- or more. Otherwise Rs. 30/- is charged as delivery charges.)
Flipkart is also no longer the cheapest options available online. Below are some screenshots of randomly selected products from Flipkart’s top selling categories:
This brings us to an important junction, if people came to shop on Flipkart for price concessions and delivery convenience, why are they still here. The answer to that could very well be Flipkart’s most important product category yet, “Trust”. Flipkart has managed to build a Reputation (dependable and quick), which has created Brand value (reliable and delightful), which over time has built consumer Trust in the brand.
It is this trust in the brand that is being subliminally reinforced by their newest Advertising campaign “Don’t shop it, Flipkart it” (the complete Flipkart Advertising Campaign, August 2012)
Another perspective by Alok Kejriwal – Flipkart ads on TV – are they building the online category at their own cost?
Do share your thoughts.
- Flipkart – More of a Window Shopping portal… (trak.in)
- Flipkart – Received $150M in Venture Round funding from Tiger Global Management and Naspers (8/24/12) (sfluxe.com)
- India’s online retail giant Flipkart raises $150 million from Naspers (buzzom.com)
- Indian e-commerce service Flipkart shoots for profitability by 2015, after mammoth $150m round (thenextweb.com)