A Little More Online

In October 9, 2007 HP launched its online photo services,
Snapfish, in India. And, suddenly, the media is abuzz with what new
opportunities online photo printing could provide. Though quite a few service
providers exist in this space, some doing brisk business, Snapfish will surely
give it a little push.

As a concept, online photo printing is not new. In the US,
online photo printing portals have existed for quite some time. With Internet
access almost ubiquitous, it is very convenient for people to upload photos to a
site, edit them the way they want, order prints in any size and number, select
the type of paper, and then receive the copies sitting at home.

NRI Driven

In India, these services started as sites targeting the NRI base. With a
large base of young Indian IT professionals in the USespecially with small
babiesthere was a need to send photos to parents/families in India. It was
much faster and cheaper for the NRIs to upload to a site that has good
India-based delivery mechanism, pay for the service, and leave the rest to these
sites. On the other hand, for these services to work within India, home users
should be able to upload photos with easeeffective broadband is crucial.
Also, the need within India is not so critical, as neighborhood studios do the
job quite well. Hence, even today, many such sites earn their bread, if not
butter, from the NRIs.

Picture Perfect: (Left) Founders of Itasveer: Nishant Kyal, Ashish Goel, Ankit Khanna and Animesh Jain; (Right) Founders of Picsquare: Manish Agrawal and Kartik Jain

"We came across this idea when we tried to send photographs
to our parents in India from the US. We realized that its a real need, and we
started working to convert it into a viable business," says Manish Agrawal,
who, after spending a couple of years in the US, co-founded Picsquare, one of
the leading online photo printing services firms in 2006.

And, since then markets have picked up: "We have seen a
dramatic change in the last two years. When we started operations, there were
only two portals in this space and they were not very active. Now there is good
and healthy competition with some big players set to enter. The total household
digital photo printing market in India was about $35 mn in 2006, and is growing
at a very fast rate," Agrawal adds.

A Little Differentiation

Between 2006 to 2007, the number of portals offering online printing has
shot up from two to ten, according to DQ estimates. Apart from Picsquare, the
other well-known names are Itsaveer and Merasnap (For list see box).

As the competition beefs up so do the offerings. The portals
branched out into offering more than just photo printsmerchandize like photo
mugs, photo albums, calendars, t-shirts, mouse pads, posters, among other things
at a price range of Rs 199-599. Cutting edge prices of high quality photo
prints, as low as Rs 2.99 for a 4x6 copy (down from about Rs 4.50 a year back),
trial prints, and speedy delivery in India attracted customers and helped
differentiate portals. Adding to the gamut of features were editing and
designing tools that made the whole process fun.

Almost all sites today provide the above-mentioned services, but
there have been efforts towards differentiation. Gurgaon-based Itasveer, run by
four IIT Delhi Alumni, takes a lead there.

"A big step has been the development of a browser-based
online design tool called Doodlepad, almost a poor mans Photoshop, to create
personalized designs," says Ankit Khanna, co-founder, Itasveer. The
Doodlepad allows users to create their own designs by mixing photos, adding
clipart, frames and getting them printed on merchandise like mugs and t-shirts.

But what really sets Itasveer apart is that it has got into a
deal with Microsoft whereby it is listed in the online print wizard of Windows
Vista, the only Indian online photo printer to have that privilege.

Khanna also agrees that the market has seen significant growth
in the last two years. "Over time, users have realized the value
proposition, mainly convenience, competitive prices, rich online experience and
above all, personalization of merchandize." At Itasveer, the ratio of photo
prints and merchandize is 3:2, and this trend has been consistent over the last
since months.

The bouquet of services does not stop there. Websites like
Picsquare and Itasveer.com provide integration with photo sharing websites like
Picassa and Flickr, which means you can import your pictures to these photo
printing sites for ordering prints.

The time taken to deliver photo prints and merchandize is about
1-4 days depending on the provider. The high quality of prints is maintained
mainly due to a semi-automated printing process, like in the case of Picsquare.
Data in the form of digital photos are collected at a centralized server from
where manual finishing is done before it is finally printed. Itasveer has
tie-ups with vendors in different cities, which helps deliver photo prints and
merchandize in the shortest time.

Future Prospects

Having seen significant growth in the past years, both in India and abroad,
the market sure looks good. From catering to only NRIs to same day delivery for
those in India, the next leap would come when these portals align with the
booming mobile phone business. By tie-ups with mobile service providers, these
portals can offer direct order prints of photos taken through camera phones.
Consumers will find this convenient and simple. According to Gartner, the number
of mobile users in India will more than double in the next five years from 185
mn to 462 mn by 2011. As competition heats up, this feature will also help
websites differentiate themselves.

ZoomIn, another player in this space providing next day delivery
of prints and full features of a photo-sharing site, has already announced plans
to tap into this market: "With millions of mobile users getting added every
month, we expect to offer services through this channel too in the near
future," says Sunny Balijepalli, who founded ZoomIn.

An ambitious target of 20 mn broadband users by 2012 by the DoT,
even if fairly achieved, would mean an increase in the demand of innovative
online services in India. Couple that with the digital camera market, which is
also witnessing unprecedented growth, and one has a golden opportunity.

The latest e-commerce report projects a growth of Rs 92 bn in
e-commerce by the next fiscal. While factors like time-saving, convenience of
ordering prints online, and variety of photo printed merchandize are key
drivers, quality, concentration of the market in urban areas due to limited
Internet access would be the stumbling blocks for now.

Snapfish Effect

Competition is always good for the customer. And when the challenge comes
from none other than HP, which almost rules what should happen to print, it is
even better.

Though Snapfish has started with offering some freebies, the
real test will be if it can address the most real needthe time to deliver.
This is where the neighborhood studios win hands down.

It will be interesting to see if the existing offline studios
are made part of the game. With digital cameras becoming ubiquitous, PCs way
behind, and high-speed connections still a problem, a local collection center,
even a nearby Cybercafe, will increase the reach.

Shikha Das

shikhad@cybermedia.co.in