The social media opportunity in India (1)

My investor and business clients are increasingly interested in investing in India. While many of the conversations are about the less glamorous sectors, the chatter about social media is unavoidable.

A quick Google search on the ‘social media opportunity in India’ brings up over 0.5 million articles, in English alone. This suggests a considerable degree of interest in the topic. This interest is evident in conversations with some investors in London too. Understanding the opportunity however needs more than interest. It needs clear analysis.

Although things are changing for the better and the more efficient, setting up a business in India remains quite challenging for most. Two sets of problems come up instantly – corruption and infrastructure.

The former’s many facets need no explanation. In Transparency International’s 2008 Corruption Perceptions Index report, India has an unflattering 85th position. The legendary ‘Mr Fix-It’, admitted by many executives as being essential to success in India, has recently had his own cover story in a recent issue of Wired magazine, titled The Godfather of Bangalore.

Infrastructure in India is a multi-headed Ladon ‘guarding’ the golden apples of the Indian market. Investors admit to their first-time-in-India shock rather candidly but truly getting over bumpy roads, snarly traffic, unreliable telephony infrastructure and rolling power cuts (although I find it hard to imagine The Taj ever has one) takes a thicker skin and a very deep commitment to cracking the Indian market.

(c) Encyclopedia Mythica at www.pantheon.org
(c) Encyclopedia Mythica at www.pantheon.org

Social media businesses bypass both these bottlenecks with relative ease. An internet-based social media business can be set up with minimal permissions. If the business can find a reliable bandwidth and storage provider, of which there is no paucity in India now, we are in business. Prima facie, the social media scene in India does seem to offer an attractive investment proposition.

In the next post, I shall write about some of the most popular social media businesses in India and what investment opportunities may be around.

6 Replies to “The social media opportunity in India (1)”

  1. All this is very new to me, would love to know more…not sure I understand everything about what social media is and why people would want to invest yet…

  2. Interesting. Recently, while preparing a presentation on BRIC ( brazil, russia, India and china) vis a vis USA, I consulted various sources ( most notably world bank stats and Goldman Sachs report) . Compared to US, in India it still requires much longer time to start a business ( 35 days I think), but one interesting thing which I noticed was that just how in two years this time had shrunk from 70 days in 2005 to present 35. Also, India is much better than Brazil in this respect and comparable to both China and Russia.
    But, ofcourse it’s just one parameter..as you noted, there are still many bottlenecks for the companies who are trying to enter Indian market.

    P.S. The other day, your friend at McGill ( you know who she is), asked me if I know you..:). I guess you guys talked on phone some days back.

  3. @Reema: Thanks. The plan was to write it soon after but Mumbai happened (although that has been a good illustration of the power of the Indian Social Media scene). Part 2 soon.

    @MG: Of course. I hope to have Part 2 here soon.

    @Nikhil: Since you work at the juncture of social media and PR, I am specially interested to talk with you and include your views.

    @Dev: There are indeed many factors that determine the attractiveness of countries as markets and investment opportunities. From my work, I see ample evidence of India’s attractiveness as a geographical market. But given the peculiar – some avoidable – impediments faced by investors and entrepreneurs, some sectors may be more attractive than others. The Indian social media sector is extremely active and I hope to be here with Part 2 soon. Thanks.

    @Nita: Shortly I hope. Thanks for your patience.

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