The path to empowering and profiting off India's next wave of online users

The Omidyar Network's latest report offers entrepreneurs valuable tips on how to access India's next gigantic wave of online users.
Written by Rajiv Rao, Contributing Writer

Profit can be an ugly world, and especially so when used in conjunction with alleviating the miseries of the underprivileged, of which India has many.

Yet, the sad truth is that even after 70 years of independence, the country has failed comprehensively in lifting the bulk of its people out of poverty and providing them with basic amenities such as decent education, healthcare, and financial inclusiveness.

That said, profit-seeking solutions for this have also failed spectacularly. It was not so long ago that a wave of microfinance agencies that flooded India sought to do exactly this, but ended up imploding due to hare-brained business models that pushed every rural Indian to take on loans in order to transform themselves into mini-entrepreneurs overnight.

India is now poised at a critical juncture in its history as the vast bulk of its hinterland begins to access the internet via mobile and smartphones -- 500 million or so in the next decade. Data costs have plummeted, and the majority of its 1.2 billion population are now enrolled under Aadhaar, a national program that issues a unique number to every citizen linked to biometric information -- Orwellian in its proposition to its critics, but hugely important in delivering basic government services according to its supporters.

All of this provides a huge canvas for budding entrepreneurs eager to tap into this potential goldmine while improving livelihoods. Yet, as the microfinance debacle showed us, truly innovative business models need to be explored and devised in order to do so.

A recent report [PDF] brought out by the Omidyar Network said it is the Indian homegrown entrepreneur, with intimate knowledge of the complex socio-economic terrain that is India, who can navigate the path to doing so. That said, the report identifies seven key barriers that entrepreneurs should keep in mind while doing so.

High data service costs

The war between the new entrant Reliance Jio and incumbents Airtel and Vodafone has driven data costs down to unprecedented levels in India -- but they are still exorbitant for this new population that has considerably lower incomes.

The ubiquity of Wi-Fi could change that, as it is one-seventh the cost of mobile internet. Creating broad-based Wi-Fi coverage could be the key to efficient service delivery.

Dearth of local language content

The report offers the telling statistic that 70 percent of Indians found local language content more reliable, according to a KPMG/Google study in May 2017. This explains why there is a low penetration rate for apps and government services. Categories such as news, classifieds, and shopping would grow much faster if content was re-purposed in the 22 Indian languages in the country that have 13 different scripts.

Lack of indigenous apps for social media and communication

This is a similar problem to the above-mentioned local language one. WhatsApp, for instance, is hugely popular in India, more so than the United States where it was made. Indian entrepreneurs should take a page from China's WeChat to see how it became the goliath that it is today, with 800 million users. Of course, banning Facebook and blocking WhatsApp as China has done helps a lot with this.

The Omidyar report mentions ShareChat, a social platform in India that is currently in eight Indian languages and has been downloaded 8 million times, which isn't too shabby.

User interfaces and experiences not adapted to social/cultural context

Case in point, the "shopping cart" symbol and "proceed to checkout" language that is accessible to the urban Indian makes absolutely no sense to the rural one, who goes to the local store for their shopping needs. These symbols could even be intimidating and counterproductive, according to the report.

Reticence in using the internet by women

In India, women are a key consumer demographic and make most of the household purchasing decisions, which should make them ideal candidates for a smartphone-fueled world. Yet, they exist in a solidly patriarchal society that considers phones as channels for "bad influences" leading to broken marriages, the report said. Apparently, women are 36 percent less likely to own a mobile phone thanks to fathers and husbands who control the buying of phones.

Other factors

Domestic entrepreneurs targeting this cohort need to keep some other important factors in mind. There is a huge lack of confidence in transacting online in India, and considerable time and energy will have to be spent in building up confidence in this area. The next 500 million are also at the bottom of the purchasing power pyramid, so the products and services offered to them should be developed via frugal innovation to make them affordable.

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