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India’s set-top action plan

Posted by jahanzaibmemon on January 4, 2008

With a population of more than one billion, India is almost a world unto itself. It’s certainly a market unlike any other on the planet, whether a business is trying to sell microchips or mini-vans.

As the country develops, it is tempting to see it becoming like a typical Western nation, full of shopping malls and flyovers, but this simply won’t happen. India is rich with its own cultures and traditions laid down over thousands of years, and most Indians are convinced the country should and will develop its own unique character as it becomes a global economic superpower.

The journey won’t be easy. About 80 per cent of India’s population is poor, living on the equivalent of a few Kiwi dollars a day. A whole set of economic and social structures has emerged to support these people, and this is responsible in large part for India’s unique character.

Indian commerce, for example, is dominated by small shops averaging less than 15 square metres, as well as even smaller street booths. Both sell everything the owners can find a market for, whether it’s food or mobile phones. One booth near Bombay University even sells home loans. Because the shops are everywhere, it’s easy for the city’s poor and middle classes to find cheap products close by. Shopping malls are starting to change this, but most Indians have stuck to their local shops.

India’s great mass of poverty means the country won’t be following the West’s technological path lock-step either. The bulk of its population want cheap solutions to their problems, not expensive Western gadgets.

India is becoming increasingly connected to the Internet, but desktop computers are not playing much of a role, since only the middle and upper classes can afford them. Laptops are common among the educated classes, but mobiles and TVs – both relatively cheap – will form the backbone of India online.

This was brought home recently with news that Microsoft is teaming up with Reliance Communications to launch an IPTV service, which will stream TV, the Web, telephone and other content over the Internet to customers’ homes. The content is not streamed to a PC but to a set-top box.

Mobiles are another cheap substitute for a home PC. India has about 250 million mobile customers and adds about seven million new mobile subscribers a month on its GSM and CDMA networks. The networks are 2.5G but Indians can use them to transfer money between individuals or book air travel. They pay between between 3 and 15 rupees each time they do (roughly NZ10c to 50c).

The cheapest mobiles sell for about NZ$40, though they’re often free with plans, and most Indians pay about 1 rupee (3c) a minute of talk time if they’re calling someone on the same network.

India can offer technology this cheaply because of economies of scale. With so many users, mobile telcos need only to make a small profit off each one to earn huge sums of money.

Original content is not something Western countries usually associate with India, beyond Bollywood movies, which rarely make it to the West anyway. The country has a booming animation market, but it’s mainly animating the creations of companies in other markets at much lower cost. Most cartoons on Indian screens feature Western characters, even if they’re being created down the road.

But this too is starting to change, as a new generation of Indian entrepreneurs emerges keen to tell Indian stories, both to the Indian domestic market and to the world. A recent big hit on India TV screens was the Krishna series of made-for-TV animated movies, based on Hindu myths.

The best- rating movie scored 30 million viewers when it aired, and the cartoons are doing well in Europe too, according to Rajiv Chilakalapudi, founder of Green Gold Animation, which produced the series.

He was enthusiastic about the prospects of India’s creative industries, saying the country had many good tales to tell, including Green Gold’s latest, an all-original effort called Chhota Bheem. “If it’s a strong story it’ll sell,” he said.

With such a huge domestic market, what is a success in India will increasingly influence what succeeds in New Zealand. As the 21st century moves on, it looks to have an increasingly Indian flavour, and it might be only a matter of time before Kiwis are ordering an Indian-made Kingfisher beer along with their takeaway curries.

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