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Internet Usage: Why is India behind China?

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Internet usage in India has not penetrated as much as it has in China. This despite various measures by Indian Government from low cost PCs to increasing competition among Telco’s. Lets’ draw a few comparisons between India and China to understand this better.

India-China-internet-wirelss-Comparison

Parameters INDIA CHINA
Median Age 26 yrs 35 yrs
Wireless Users (June’2010E) 617.5 mil 800 mil
Wireless Internet Users 50 mil 277 mil
PC Internet Users 31 mil 143 mil
Total Internet Users 81 mil 420 mil
Literacy level 66% 93%
Major local Languages ~27 ~4
Broadband >256 kbps >1 Mbps
Broadband Internet price >$5/month >$10/month

One could argue that literacy and huge diversity are hampering India’s Internet growth compared to China. My point however, is that Indian users have overcome these issues in the past. The proliferation of mobile phones is one such case. Today users use mobile phones for a diverse range of functionalities from calling, SMS to more sophisticated ones like Bluetooth File transfers & Internet browsing.

We all know that bulk of pictures and other entertainment content is still transferred through Bluetooth. One such transfer typically required 12-15 steps. SMS is another example which is popular among users from different cultures and regions. On the contrary Telecenters were nowhere near as successful.

To me above examples prove that if sufficient motivation is there Indian consumers can adapt complex technologies as well despite their low literacy and huge diversity.

Other reason could be a relatively low level of income in India. However, as per a latest report from businessworld.in, high income households in India now have outnumbered the poor income household for the first time. Based on this, if we say that 50% of Indians (about 500 mill.) are middle or rich class even then a total of 81 million Internet users are too low!

So the question remains why does India lags so far behind China in Internet usage? Is it lack of marketing campaigns like celebrity endorsing Internet usage among Indians? Or do we not have enough local websites to attract the mass-Indian consumers?

In my opinion users are yet to perceive the value for Internet. The reason could be lack of appealing content for Indian users. Even though we have huge number of Indians on Facebook, YouTube and twitter yet it seems that these social networking portals are not enough for proliferation of Internet in India.

China for example has alternates like- Baidu.com, QQ.com and Renren.com to almost all major global-websites. These local websites are very popular among Chinese internet users. May be time has come for telcos and content builders to develop more India centric websites, portals, and mobile-apps and market these effectively to generate a wave of demand for Internet in India.

  1. subhash says

    well for present generation require more than 2 mbps . not less than that . with unlimited connection , which cost 500. well telecom industries can profit lot in this , but i dont understand wtf they doing .i think its a good time to launch a 2=-20 mbps unlimited for less than 500-1000 which can be affortable . c how many will be using internet , may be some use lot for few months , after that they will reduce there usage , even they will have 20mbps connection . and now a days . e- learning is on rapid tool for learning . only fking telecom owners are illiterate who can even look the future of 2/3 yr . c how the mobile industries had benefited . i hope the reliance will come with this king of special plan . 1 gb for 10rs . its means 100gb 1000rs . it the best plan could be . btw if they launch this ,they will probably launching UL plans for even less than 500rs . so reliance pllz launch soon …

  2. JANSON says

    i have been to india before . judging from the things that i have saw in India , India at list 20 years behind China . But i believe India will catch up with China in future . Come on India ……

  3. Vipasha Rathore says

    Hi Amit,

    I am Vipasha Rathore and I work for a public relations firm in New Delhi. I have been visiting your blog lately and have seen that you are increasingly writing on companies like Google and on topics like internet penetration, cloud computing etc. I service Google and VeriSign as my clients, was hoping to get in touch with you for work related matters. Request you to please share your contacts, so that I can get in touch with you for the same.

    Regards
    Vipasha Rathore
    20:20 MEDIA
    [email protected]

  4. Jairaj B. Jatar says

    Ravi,
    The major reason is the domination of english over Indian languages. As you correctly point out in the last lines of your article, there is an urgent need to ‘democratise’ the internet for the mass of Indian citizens. If you make the keyboard to conform to Indian language you will find much greater interest in desiring to use the internet. China (like Japan and Korea) have a limited alphabet-vowel soup in their national languages and they effectively modify the QWERTY keyboard for their languages. That is not easily done in India.

    I appreciate that you are ‘batting’ for more India-centric systems, content, etc.

    1. Ravi says

      Thanks for your comment.
      You are absolutely right!

      However, I am still amazed over such low Internet penetration. I think India has around 232 mil English speaking citizens and is suppose to be the largest english speaking country soon: http://trak.in/tags/business/2007/05/26/strength-of-india-the-largest-ehglish-speaking-population-in-world-by-2010/

      2 fact are interesting to note from this fact: (a) we have 600 mill mobile subscribers and I am assuming bulk of them use phones with English keypads. (b) there are only 81 million use internet as of now with 232 mill English speaking population.

      Sure language is a challenge but 600 mill mobile users do see the utility of using cell-phones and have the motivation to overcome this challenge somehow.
      I think we still have to see this kind of motivation for accessing web.

      1. Jairaj B. Jatar says

        My point was that unless many many many Indians feel the web has Indian content (linguistically as well as culturally sensitive) we will not have the motivation. Too many Indians feel the digital divide is against them. Even in the case of mobile users the use of texting is limited to english-speaking people.

        I could illustrate this with an example about my car driver; I would like him to text me in an Indian language rather than call me and discuss. But that’s impossible because his english writing-reading skills are non-existent. Yet, if he had his mobile keypad + software configured for Indian languages he could use his device much more efficiently.

        We need a revolution!!

  5. Madhav Shivpuri says

    Revive savitabhabhi.com and the Indian traffic will rise ;-)

    Guys, albeit the various points you are talking about FB, Youtube, movie downloads kind of entertainment related usage, are they the right metrics to look at when you talk about penetration and growth? How about looking at how many Rupees/ Dollars of ecommerce activity happened, how many people use internet for their livelihood or part of their work, how many people use it for non-entertainment activities?

    1. Ravi says

      Good point Madhav.

      However, I was trying to say that overall Internet usage is terribly low in India. Estimated Indian Internet users are around 81 mil compared to 420 mil Chinese Internet users. These numbers pretty much include every activity that web users do including entertainment, e-commerce etc.

      It will be interesting to segregate each of these activities and see what we use most. As we can then probably increase similar portals and thus encourage internet usage in India.
      One post on trak.in does tells us the “Purpose of Accessing Internet” for Indians: http://trak.in/tags/business/2010/04/07/internet-usage-india-report-2010/

      Thoughts?

      1. Madhav Shivpuri says

        Hi Ravi,

        Thanks for pointing out that old post… was useful to check it out.

        If we want to see which websites are most by users in India, Alexagives an instant list – http://www.alexa.com/topsites/countries/IN . Accurate or not, its a starting point

        1. Ravi says

          Sure does! Alexa is another one of Amazon’s brilliant venture.

          While we can know which websites are most popular yet its difficult to find out what hooks people on. For example, Google, yahoo etc are pretty popular but we don’t know what ppl search on them.
          So while an Indian alternative to Google might not be as successful, sites with specific content targeted for Indians might well be ex- Pagalguy.com.

          But like you said its a good starting point in terms of measuring traffic from India.

  6. Amit says

    This is exactly what i am saying.. connections are available with speeds of 512kbps for $15 which i think is not good enough.. coz still at 512kbps you have to wait for bufferings. Else where in the world the speeds have reached upto 20mb or even 100mb ! my brother pays $25 for a speed of 8mbps with 100GB download limit. He got a VOIP phone no in that as well! 100mb connection is available in India as well.. with a download limit of 15GB only and at a cost of more than $75..
    My point is, if internet has to penetrate as much as the cell phone industry or even half of that, the costs have to come down. Remember when cellphones costed Rs 16/Min or even till abt 4/- .. the mobile growth was not as big as it is today, when it costs anywhere between 25ps to 50ps.

    1. Ravi says

      Amit,

      Point well taken.

      Just one comment though, all the users are not expected to be high-bandwidth consumer. I know of people who can easily do video-chat using 512 Kbps. Many of them mainly use web for email, chat, social network, occasionally youtube and downloads(which is not as bad on 512 all you have to do is go for a short-walk and your video is buffered!). So infrastructure is not as bad but you hit the nail on head when you say price has to come down.

      It would be interesting to see how consumers adapt to low prices, if it happens. Hope they react well!

      Thanks for your contribution :)

  7. Amit Bhide says

    Ravi nice blog
    According to me the most important reason behind low internet usage in India is that internet is still considered as something that has to be limited. the price of $5 u mention gives you a mere 250MB!!!??? connection at many be 2mbps which never works at that speed. Even today companies are comming with highspeed plans which are either limited to 10 or 15GB.. The unlimited ones cost a hell lot! nearly Rs.1000 for only 400-512 kbps unlimited with fair usage policies. I remember my father in law got a boradband conneciton with 1GB limit and talked a lot with my sister-in-law saw some videos on youtube.. and that month he received a Huge bill.. reason he crossed the 1GB limit and had to pay 1Re per MB?!! he was shit scared and was about to remove the connection which after my persuation he didnt. I made him change his plan to 256kbps unlimited. Now he complains at the videos are slow and the voice breaks!!!

    When are these companies going to growup? they need to give speed at 10$ prices with atleast 50GB upload download then ppl will start using Internet TV, Radio and other service.

    Hope you agree to this!!!
    Amit

    1. Ravi says

      Amit, Thanks for your insightful comment.

      I will have to partly differ with you on pricing. For ex – Hathway gives you a 256 Kbps connections at $10/month with unlimited download, Airtel also gives you 512 Kbps unlimited @ $15/month. Agree with you on the point that unlimited 1Mbps+ cost a lot.

      Also we don’t even see mobile-internet usage going up. Data plans cost are currently very cheap with Aircel like firms offering unlimited downloads at 100 Rs/month!!! others also offer free FB, email etc.

      The companies prices drop when demand sort of goes up and competition increases. While this phenomenon has partly started I think people are yet to respond to it. I somehow feel there is something else missing as well!

  8. Amrita says

    Insightful.

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