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E-Commerce Grabs Spotlight at India Internet World

Dozens of experts from around the world delivered Internet business advice to over 850 delegates at the recently-concluded three-day India Internet World conference in New Delhi, co-hosted by Mecklermedia and Bangalore-based Micromedia.

"In too many countries the lack of competition and surcharges for Internet access are tragically slowing down markets," said keynote speaker Gene DeRose, CEO of New York-based market research firm Jupiter Communications. He strongly advocated telecom reform in India to bring about better and more affordable services for Internet connectivity.

Though India is well equipped with technical and English-language skills, its Internet economy is being held back by an inadequate infrastructure and a lack of progressive political will regarding Internet policies.

Electronic commerce via the Internet in India totaled only $2.8 million in 1997, according to Ravi Sangal, president of market research firm IDC India--but could reach $160 million by year 2001 if leased line costs drop sharply.

Hotmail founder and CEO Sabeer Bhatia, an Indian citizen who grew up in Bangalore and Poona, was treated almost like a folk hero thanks to the astonishing success of his free-mail service, started in 1996 and now accounting for over 23 million users worldwide, thus making it the largest e-mail service in the world.

"Just think--Hotmail could just as easily have been based in India, but the conditions turned out to be more favourable in Sunnyvale, California," said Bhatia in an interview. Bought for an estimated $400 million by Microsoft late last year, Hotmail plans to launch German, French and Japanese versions of its service before venturing into the embryonic Indian language Internet market.

Internet marketing consultant William Hunt said Indian companies can tap unpenetrated foreign markets in Europe and Asia through multilingual ads and localised content. He suggested Indian pharmaceutical companies producing herbal medicines and Indian tourism agencies could tap the Japanese market using multilingual Web sites.

Ross Veitch, producer of Yahoo! Asia, said Indian online publications had useful content for portals like Yahoo. "We are also looking for online ad representatives for Yahoo in India," he said.

Experts like intranet consultant Mellanie Hills (author of the bestseller "Intranets as Groupware") urged Indian companies to move beyond stand-alone consumer-oriented Web sites to interlocked extranets with their business partners.

"Gartner group studies indicate that 80 per cent of e-commerce transactions will be done on extranets. And 80 per cent of the e-commerce in the future will be on the intranets and extranets," Hills said. As of now, almost 70 per cent of U.S. companies are setting up either intranets or extranets, according to Hills.

Indian companies like Mumbai-based Aptech are making rapid forays into the Internet training and online education markets. The education market on the World Wide Web will grow to $100 billion by the year 2001, according to Ganesh Natrajan, CEO of Aptech. Numerous other Indian companies are emerging as Web solutions providers, or outsourcing houses for U.S. Internet companies like Cybercash.

Chandrababu Naidu, Chief Minister of the southern state of Andhra Pradesh, is one of the few Internet-savvy forward-looking politicians in the Indian Internet scene. His "Vision 2020" programme includes provision for Internet kiosks in every village, an Indian Institute of Information Technology, intranets in most government departments, toll-free long-distance access to the Net, and online access to vital information by ordinary citizens, tourists, and foreign investors.

His government is already working on alliances with Singapore Network Services, McKinsey Consulting, the World Bank and Carnegie Mellon University for Internet-related projects.

The half-million user Internet market in India still has to mature via the formation of Internet industry associations, third-party services for traffic audits, and lobbies for progressive cyberlaws. For instance, advertising revenues of Indian online publications are expected to really take off only when audit data to capture the amount of traffic to these sites is available.