the ruins of B2C carnage, CEOs of Internet companies in India think there’s
light at the end of the tunnel. They believe that it was a right decision to
foray into Internet business, and it’s not the business model but its
execution that is key to success in the Internet economy.
"India is a huge market, and B2C will definitely
generate profits…" said Arun Varma, CEO, Primtravels.com. Most of the
dot-com CEOs shared his view on the survival of B2C companies with nearly all of
them saying that no business model–B2C, B2B or P2P–is a bad model by itself.
"With huge winners in each of these sectors, they would be based more on
execution rather than on vision and the ability to deliver results in a
predictable manner," said Abhay Havaldar, partner, Connect Capital–a
venture capital fund.
What’s wrong with dot-coms?
The answers to this question elicited identical responses.
According to Pankaj Sethi, CEO, Media2India.net, "The whole concept of
starting off a dot-com with a high burn rate, supported by external VC funds,
with a focus only on valuations and sell-out, falls flat in a market, which
starts asking for results, revenue and profits." The CEOs felt that the
failing B2C firms concentrated more on their valuations and market
capitalization rather than on delivery and adapting sound business models.
"They were after market cap. They never had a sane revenue plan,"
added Anurag Saraf, CEO, Steel RX Corp. Explaining the multiplicity of factors
working against the dot-com retailers, Rizwan Thakur, founder and co-CEO,
ITNation.com, said, "They lack a stable revenue model; if they have a
model, it’s not strong enough to be sustained independently. They might be too
ahead of the times in the Net economy."
B2C is the future
Notwithstanding the volatility in the Internet industry, most
of the CEOs feel that B2C will have a future. "It is bound to… Every
model has its own market and B2C will also have its own market but it is some
time away," said Outlook group COO Mahesh Perry. The business scenario for
B2C companies is bound to alter in the days ahead, as infrastructure bottlenecks
clear up and Internet use reaches a threshold in India. Pankaj Sethi felt,
"The B2C businesses, when integrated into existing telecom services or as
an ASP model, should find relevance in mobile era."
Where are the Net-users?
The nascent Internet economy in India needs to have a certain
threshold number of Net users for making this business fruitful. Perry said a
viable business platform for Internet companies will be built when 4-5% of
Indians are hooked to the Net. That works out about 50 million Internet users,
given India’s population. For Pankaj Sethi, 25% of urban Indians on the Net
will put the Internet at a level where it will be ‘meaningful’ as a business
platform–both from the perspective of advertisers as well as consumers.
SoftwarediOxide.com CEO Navyug Mohnot feels that the Net is no different from
the brick-and-mortar companies. He observes that for survival of the Net
companies 1,000 customers are enough.
The future remains bright
The CEOs shared optimism on the future of Internet
businesses. Despite falling valuation on the bourses, they asserted that they
made ‘absolutely’ right decision to enter the Internet space. "It was
best decision of my life, and good timing too," said Manish Modi of
Netacross.com. The CEOs, who were also queried on the negative impact of their
24Ã—7 businesses, felt that they were part of the historic transition being
brought in by Internet in ways of living and doing business.