Internet, Startups

Why should you enter into Internet business in 2014?

OnlineRetailStartups in early 2000’s in Indian Internet space, faced problems in getting initial funds, maintaining a proper logistics and payment gateway for their consumers, as well as discovering their monetization mode. Also, it was equally difficult for them to gain approval for their ideas, thought process, methodology and market opportunity both from investors as well as consumers.

With the growth of internet in India, it has become clearer that the scenario is now changing, the problems faced by entrepreneurs are reducing and also the generation X is accepting new, out of the league and even the most weird ideas.

Success of Zivame, an online lingerie store; Zomato, online restaurant guide;, an online baby products store; Flipkart, an online retailer turned marketplace; Snapdeal, example of a marketplace model, all are some of the case studies being created in the market.

The year 2014 offers the young entrepreneurs a lot more opportunities than the past few years and the market openness for new ideas. Why should you enter into online business in 2014, here are some reasons:

1. Innovation will pay off well: In the present internet ecosystem, there still lies a number of categories such as pets, toys, lingerie, beauty and care, furniture, backend services whose market is still untapped. With entrepreneurs coming up with an innovative startup in these segments or any other segment, can bring in creativity and technology along with creating jobs. Innovation will also help an entrepreneur in picking up funds from the investors, thus gaining a better start and high chances of growth. The Indian market is now opening to bet for innovation and proof of concept.

2. Growing Ecosystem: According to reports, India currently has an internet user database of 205 Mn,. The users of mobile internet are increasing at a very fast pace and it is expected that this number will grow to 185 Mn by June 2014. Also, a report by Boston Consulting group,” Capitalizing on India’s Digitally Influenced Consumers”, predicted that India’s internet user base will increase to 330 million by 2016. This is the right time to get into the system and gain early mover advantage before it gets more competitive. Also for the duration of coming 2-3 years market will offer high growth rate till it becomes a bit stable.

3. Indian versions of unsolved problems: Though India is considered to be the third largest country in terms of internet user base but still, internet is far off from the reach of a majority of the consumers. Also, poor connection service, low speed internet and high priced data packages have still kept the rural masses away from this facility. Moreover, the typical indian mindset still does not accept online over offline, be it the apparels, newspapers, education or any other category. Shortage of time, quality assurance, door step delivery at lowest prices, post purchase assistance – are some of the problems that are present in the Gen X lifestyle since its beginning.

For now, atleast in the urban areas, people are shifting towards online version of things. With upcoming 1Gbps google fiber, and more players in the ISP segment, it is certain that internet space offers a bright future to the new startups.

4. Rise of investors: A large number of accelerators, incubators, vc’s and angel investors are coming forward to invest in potential startups. Many educational institutions are also providing setup for their students to encourage them in starting up with their own venture. TATA First Dot, India’s first platform for the youngest entrepreneurs, provides support to the early stage ventures of students, thus eliminating the age bar for entering into startups. As per our Internet Ecosystem Q3, Deals report, a total of 60 deals were done in Q3, FY13 with digital services emerging as the leading sector.

5. Untapped potential of Social media: Social media has gained importance and played a significant role in reaching out to the consumers in a niche section  to the elite. So, reaching masses is no more a hurdle now. Businesses are harnessing social media to reach relevant target clients, also creating a social media advertising industry as a byproduct.

6. Increase in Technology Adoption: The rate at which the technology adoption is increasing, it has become much easier for the startups to enter into online space. Be it the creation of websites or maintaining the logistics and supply chain, many tech oriented services are available to cater to these needs and that too in ones’ budget.

7. Rising awareness: Digital media has enhanced its reach to a much wider section of the society. Apart from increasing awareness of the products and technology in the digital world, it is also changing the people mindset towards internet businesses, thus attracting masses towards it. Also consumers rather be it in a B2C space or in a B2B industry are now getting familiar with internet as a technology.

8. Growing chances of a good exit in few years: With increasing internet penetration, growing awareness among consumers, and rising investor’s interest in startups, a business plan which is unique and can manage to attain good profit margins in the first few years, chances are that they can easily make exits while earning good money out of it and also keeping the hold of the company.

9. Good need of talent and skill in this sector: For a startup to become successful, it not only requires a good idea, but also a great team.The 3 major fuels that drive startups and growing companies are passion, intensity, and resilience. Also, the proper analysis of the marketing strategies, expansion opportunities and a proper exit strategy needs to be planned in advance. A perfect timing to launch the product and understanding of the consumers mindset is an added advantage. Therefore, the startups must focus on building talent and skill in their teams.

10. High Learning inspite of landing up with a failed startup: High need of human resources in this sectors makes your career secure if you opt for starting an Internet venture. The level of learning gain during your stint will make you a valuable person in the ecosystem whom anyone will want to hire.

11. High opportunity, less competition: When compared to the eCommerce scenario in global markets, especially in the developed countries like USA, UK, etc., India still offers a largely untapped market for the upcoming startups. People in emerging markets are consuming international content from a very long time through sources such as Facebook, Google, etc., however a localised version of these have always been missed. Though the competition is increasing at a fast pace, but as we said earlier, there still lies a vast number of categories which still remain untouched in the internet ecosystem of India. Thus, offers a wide scope for entry in the market.

Here are the views of some industry leaders on growth of Indian eCommerce in 2013 and upcoming trends in 2014

latif nathaniMr. Latif Nathani, Managing Director at eBay India

Wherein the year 2013 has made millions of Indians eager to discover the many benefits of online shopping, the year 2014 will be more defining in shaping up of the industry. As players with sustainable business models & the ability to deliver scale will dominate the consumer’s wallet & win in the long run. In 2014 brand and retailers will increasingly look at multiple avenues to be visible to the customer at every channel of trade including eCommerce, Mobile Commerce and even Social Commerce. The coming year will also see innovations in the area of personalisation of content and curation of exclusive merchandise to meet the consumer’s interest.

Pearl Uppal, Founder & General Partner at 5ideas Startup Superfuelpearl

Over the past 12 months, we have seen many startups in the market which lack the maturity either on the product side or on the distribution side. In the coming year, we expect this to reduce and see an improvement in the quality of the startups. With the concept of copy pasting from west fading out, we will see more startups first targeted to Indian market opportunities. Emerging markets like Brazil, Africa, etc., will be preferred more rather than just building out and figuring out a way to reach valley. Also, in 2014, there will be more cross border movement of talents between the states and spaces like payments, ecommerce enablement, big data and mobile will see more action

vishal mehta 2Vishal Mehta, Founder and CEO at Infibeam

Increasing internet and smartphone penetration has led to more of online product discovery and price discovery by the shoppers in the past few years. In the coming year too, this will provide them not only an instantaneous access to information but will also considerably reduce their purchase decision time. In 2014, more and more offline retailers will move into the online space especially in the electronics segment. Also, we expect that digital world will appeal for media product consumption (e.g. books, dvds, etc.) much more than the physical format.

Sanjay Sethi, CEO & Co-Founder at ShopCluessanjay-sethi

2013 was an exciting year for Indian e-commerce with a number of smaller players losing steam and stronger contenders emerging distinctly in the front ranks. Some of the trends and innovations we expect to see in 2014 include increase in multi-device shopping , emergence of data driven selling, and improvement in efforts to acquire and retain customers with aspects of real-time merchandising. Also, this year will see the use of social media for tracking behavior & targeting consumers and Geo-targeting, customer-centric websites and customized communications will be the order of the day.

kunal bahl2Kunal Bahl, Co-Founder and CEO at

Overall, this year will see a battle between the two major business models of e-commerce – Inventory-led and Marketplace Model, the latter proving to be more efficient, scalable, sustainable and cost-effective; thereby gaining a lot of traction with a significantly higher return on invested capital.

People from service industries like Google, Microsoft and other MNC’s are quitting their jobs to start their own ventures in internet space showing their belief on startup ecosystem hence motivating the youth. So, this is the time for all the aspiring entrepreneurs and youth  to strengthen themselves, put the gear up and start moving to make their dream come true, because its 2014. The beginning of a new world!

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