Internet Industry

INTERNET INDUSTRY

Introduction
The Industrial Internet is the integration and linking of big data, analytical tools and wireless
networks with physical and industrial equipment, or otherwise applying meta-level networking
functions, to distributed systems. The term was coined by General Electric (GE), a U.S.
corporation.
The Internet market includes an Internet infrastructure service segment and an Internet
application service segment. Internet infrastructure services mainly include Internet access
services, domain name registration services, Internet data center (IDC) services and CDN
services, while Internet application services mainly embrace E-mail box, search engine, instant
messaging, online games, online advertising, E-business and other new application services.

Statistics
The Internet started when Netscape IPO launched Web 1.0 in the year 1995, generating billion-
dollar initiations in the Western economy. The wave reached India in 1999, with a bunch of
entrepreneurs making a foray into this money-spinning business.

The internet industry soon witnessed the creating of million dollar firms like Yahoo!, eBay,
Amazon and Google, with combined market share of USD 350billion. The listing of Google in
the year 2004, revealed the speed at which one of the most expensive media firm can be
formulated. This gave rise to Web 2.0 which sis steadily emerging in India.

The growth of Internet users in India from the year 2010- 2016 has been illustrated in the table
below:

Financial Year Internet Users Populace Ratio in %

2010 7,000,000 1,094,870,900 0.7
2011 16,500,000 1,094,870,950 0.6
2012 22,500,000 1,094,870,975 2.1
2013 39,200,000 1,094,870,980 3.6
2014 50,600,000 1,112,225,812 4.5
2015 40,000,000 1,112,225,900 3.6

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2016 42,000,000 1,129,667,528 3.7

The entire subscriber support for internet users in India in the year 2009 was 82 million.
However, the market reach in India is one of the lowest as compared to its western counterparts
like South Korea, United States, Japan, etc; estimating to 7.5% of the total populace. The amount
of broadband connectivity in India has undergone an incessant expansion since 2006. Entire
broadband connections in India attained the customer base of 8.03 million, by the end of January
2010.

Growth Drivers
The Internet economy in India is becoming a major contributor to GDP, and is expected to grow
to about 7.5% of the country’s GDP by 2020 from 5% now. E-commerce and financial services
are projected to lead the growth. For instance, share of digital payment transactions could
increase to 30-40% of all transactions by 2020 from 13% in 2015.

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Financial Support
To form an impact on traditional banking, first, such impact will have to be exerted by a financial
institution just like banks, who can create a competitive relationship with banks. However, the
initial "Internet Finance " is only a financial information intermediary rather than financial
institution. Legal financial institution we so called must have related licenses issued by
government, such as banks, insurance, securities and trust funds licenses. Only with these
licenses can it be a traditional financial institution. However, internet finance has now been
covered by financial regulatory agencies. Although internet finance institutions may apply for
third-party payment license or consumption financial license, only few of them can get the
licenses successfully due to the high supervision threshold and strict restriction on licenses
quantity made. So most of the so-called Internet finance still fall in the financial intermediary
category.
Thus, whether financial institutions or financial intermediaries, both of which can have
traditional offline business on the one hand and rely on the Internet on the other hand. So the
Internet and banks are not contradictory to each other, but are mutually beneficial.

Traditional banking and the Internet conflicting

When the Internet is more and more developed, traditional financial institutions have already
started to combine with the Internet for a long time. They first generated online banking, online
financial, online securities, are all initially internet finance , and are also traditional financial
business. The role of the Internet is to subdivide the financial industry and make the division of
labor more clear, the traditional financial institutions specializing in financial business; while
Internet financial business is stripped from the traditional financial institutions, being left to the
professional financial intermediaries. The fact that micro finance business, and third-party
payment business, which should not be run by the bank, are operated by professional financial
intermediary, is a good embodiment. some card issuers such as Visa and MasterCard, are
professional payment intermediaries, who cooperate with banks to form a supplement
relationship, but they themselves do not operate banking business.
Therefore, the Internet finance and traditional financial services have a complementary
relationship, only by taking advantage of each other mutually can we better refine the financial
division of labor.

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FDI Policy
The Department of Industrial Policy and Promotion (DIPP) has notified India’s Consolidated
Foreign Direct Investment Policy 2017 (“FDI Policy 2017”), effective from August 28, 2017.
The FDI Policy 2017 is a consolidation of the various decisions taken by the Government of
India in the past one year. The present consolidation subsumes and supersedes all Press
Notes/Press Releases/Clarifications/Circulars, which were in force as on August 28, 2017 and
reflects the FDI policy as on August 28, 2017.
E-commerce: The Government had earlier mandated 25% maximum sales from a single vendor
but had not specified the period for computation of sales. The FDI Policy 2016 prohibited an e-
commerce entity from permitting more than 25% of the sales effected through its market place
from one vendor or its group companies. The New FDI Policy clarifies that the 25% of sales
value must be computed per financial year.

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Agencies
 AliveNow :Full service award winning social media agency that offers a wide range of social
media services and deals with clients nationally and internationally.
Services: Social Media Marketing, Digital Marketing, Facebook Application development,
Facebook ad management.
Brands: DAMAC, Prestige Smart Kitchen, PVR cinemas, Reliance Footprint, Penguin India,
Audi, Honda, Hyundai, Marriott Hotels and Resorts, Sandisk, Cashkaro.com, ITC Limited,
Chevrolet, Hard Rock Café, Mom & Me, Barista, Nandos, UniverCell, etc.
Location: Bangalore
 Propaganda India: As a team, they are intrigued by new possibilities. They put thoughts,
ideas, concepts, processes and designs to play, giving the end-user an immersive brand
experience.
Services: Digital Branding, Online Advertising, Content Management, Communities, Social
Media Frameworks, Mobile, Email Marketing, Videos, Youtube Marketing, Web Experiences
and Customer Experiences.
Brands: Google, Youtube, Chrome, India Get your Business Online, Max Life Insurance, Axe,
Unilever, iCreate Software, via.com, Azven Realty, IBM, Queue Up, Kiwi Kiss, etc.
Location: Bangalore
 Tiramisu: It is your one-stop solution to all your digital demands, be it building websites,
improving SEO, or driving social media traffic, they have the right tools to expand your
brand outreach across the interwebs.
Services: SEO, Designing, Websites, eCommerce Portals, Apps, Training, etc.
Brands: Ascent Capital, Assetz, Habanero, Indus League, Infosys, Scogen, Unilever, TVS,
Vodafone, Toyota, Sri Sri Ayurveda Panchakarma, Sidvin, etc.
Location: Bangalore
 Godot Media: It mainly focuses on cutting-edge content marketing strategies that helps
businesses drive customer engagement through Twitter and Facebook.
Services: Article Writing, SEO, Blog Writing, Content marketing, e-book, Copy Writing,
Whitepapers and Social Media.

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Brands: ING, Sotheby’s, AES, ezbob, ProvPlan, Shaw, WBR, Slidely, Genie Ventures,
blackglass, Adept Central, Creatice Natives, Digitcom, MiniDisc, etc.
Location: Bangalore
 InkOniq: It is an award winning modern digital agency located in Bangalore. They combine
design thinking, technical mastery and marketing expertise to deliver awesome experiences
for mobile, web, smart TV and internet of things.
Services: Digital Marketing, User Experience, Mobile Apps, Web Development, Strategy and
Planning, Design and Technology.
Brands: Perfios, StoryBoard Wedding, Ade, Jorgits, SavvyMob, Place for Change, etc.
Location: Bangalore
 Graffiti Collaborative: They want to work with clients that believe in their brands and
believe that an agency’s job is to tell the story of the brand rather than to sell it.
Services:Digital, Design, Tech, Films and Events.
Brands: Printo, TaxiForSure, Bleed Hope, Mini Klub, Crafty Culture, WonderLa, Reynolds,
United Spirits, Jade Magnet, Esplanade, Jade Magnet, Nestle, Adobe, Intel, Aditya Birla Group,
etc.
Location: Bangalore
 Geek:It is a creative agency that uses technology, strategy and creative to find creative
solution for clients.
Services: Advertising, Branding, Video, Web design, product Design, Social Media and Online
Engagement.
Brands: Britannia,Wipro, Sikkim Manipal University,Fastrack, Gone mad, Splash, Galaxy,
Mirchy, The WoodRose, Durex, Clebrations, etc.
Location: Bangalore and Delhi
 Interactive Avenues:It is a full-service digital marketing company. All your digital media
needs are served and packaged to meet your business objectives.
Services: Creative, Social, SEO, Media, Search, Website, Google Analytics, Mobile and ORM.
Brands: Tanishq Mia, Micromax, HDFC, Mumbai Fighter, Skore, Coca Cola, Mahindra, FedEx,
Mahindra, Book my show, American Express, Intel, etc.
Location: Bangalore, Delhi, Mumbai

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 Kreata Global :They are strategically creative and technologically innovative digital agency
and create unique experiences for brands by using their expertise in social and digital media
marketing.
Services: SMM, Digital advertising, Digital Activation, Mobile App Development, Web
Development, Interactive App Development and Facebook apps and games.
Brands: London Dairy, Yateem Optician, Greenpeace, Clarins, Lulu, Police, Mindshare, Thiery
Mugler, Malabar gold and diamonds, Tiffany, Rainbow, Toy store, etc.
Location: Bangalore and Kochi
 Langoor: It is a digital agency filled with creative technologists and conducts campaigns for
brands all over the social media.
Services: Strategise, Build brands, Create connected experiences, Build platforms and Offline
capabilities.
Brands: Investa, Nataraj, Oxfam, Fab India, Virgin money, ITC Infotech, Wipro, Intuit, IIHT,
Cleartrip, Fabindia, Maison, Closethegap, Fansonstands.com, etc.
Location: Bangalore

Investing opportunity
The main reasons for investing in the Internet sector are the higher-than-average earnings
growth, profit margins and return on equity (ROE) offered by some Internet companies. These
factors have led to higher-than-average returns for some Internet investors. When the Internet
first became available to businesses in the mid-1990s, entrepreneurs and investors rushed to
register websites and think up new and innovative businesses. While the vast majority of early
Internet companies fizzled, some, such as Google, eBay, Yahoo and Amazon, have become
household names.
Even though many early Internet companies flopped in the wake of the dot-com bubble, the
underlying premise behind many of them was to make goods and services available to consumers
that would not have been available otherwise or at a lower price than could be previously
offered. Where in the past, a product might have required years of careful marketing, including
television advertising and reviews in print media, the Internet suddenly allowed a new product or
service to be made available to consumers almost overnight.

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The most successful Internet companies have found ways to leverage core businesses to generate
other revenue streams. Google's core search business has allowed it to create entirely new
industries, such as keyword-based advertising and search analytics. Likewise, Amazon was a
book retailer, but like Walmart before it, its sales and distribution channels, as well as its prices,
filled a huge market gap. Customers today flock to Amazon for all types of merchandise. Google
has annual revenues of $66.00 billion and Amazon's are $88.99 billion.

The way in which the Internet makes a worldwide clientele immediately available has allowed
other innovative companies to bring revolutionary products and services to market.
Netflix was one of the few Internet companies able to muster a market in which to sell common
stock in 2002, in the wake of the dot-com bubble and subsequent crash. As of Feb. 24, 2015, its
shares have returned about 6,200% since the initial public offering (IPO). Netflix has $5.50
billion in annual revenues reported quarterly earnings growth of 72.20% on a year-over-year
basis for its 2014 fourth quarter.

Facebook was founded in 2004 and first offered stock in 2012. Since its IPO, Facebook shares
have returned 105.21%. The social networking giant has gross annual sales of $12.47 billion and
an operating margin of 39.97%. Over the past five years, Facebook has had annual earnings per
share (EPS) average growth of 91.81%. Consensus estimates from analysts for annual EPS
growth for the coming five years are 32.42%.

Founded in 2006, Twitter offered stock in an IPO in November 2013. Since the IPO, the shares
have returned 16.90%. For the coming two years Wall Street analysts are calling for EPS growth
of 171.40% and 113.20%. With Twitter's gross annual revenues of $1.40 billion, analysts expect
a profit from Twitter for fiscal 2015 and 2016.

Jobs Opportunities for MBA Graduates

Better marketing is the panacea that companies have prescribed for themselves to ward off the
ills of recession. Therefore, MBAs from the Marketing stream are even more sought after than
they were in good times earlier.

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Industries and job titles: A buffet of various jobs in industries such as retail, banking,
hospitality, media, information technology (IT) and information technology enabled services
(ITES), and free-moving consumer goods (FMCG) is lavishly spread before them.
Jobs are available with titles such as brand manager, sales manager, marketing manager, product
manager, market research analyst, media planner, and Internet marketing manager.
Job description: In a nutshell, a brand manager is responsible for the promotion and placement
of the brands of a company and data collection of rival brands.
A sales manager sets sales targets and monitors distribution and customer service.
A marketing manager evolves marketing strategy but also focuses on retaining customers.
A product manager manages the delivery of products to customers and is also in charge of the
profitability and market growth of products.
A market research analyst devises methods of data collection, analyses data, conveys the data to
the business development team, and helps in evolving marketing strategies.
A media planner selects the means of advertising products and helps the marketing team meet
targets.
An Internet/online marketing manager is responsible for a wide range of web marketing avenues
such as social media marketing, pay per click marketing, search engine optimization, and website
content.

Jobs after MBA in Finance

An MBA in Finance is a coveted degree as a range of career options are available before
graduates. Probably, this is because the degree program provides an opportunity to the student to
specialize in various fields such as international finance, investment management, taxation, tax
planning, financial statement reporting and analysis, and insurance management.
Industries and job titles: The magic words “finance” and “management” open up career
opportunities in various sectors including banking and financial services, investment banking,
management consulting, insurance, wealth management, asset finance, and hedge fund
management.
Job titles available to an MBA in Finance include financial manager/analyst, credit analyst,
accounting manager, risk and insurance manager, treasurer, finance manager, cash manager, chief
financial officer, VP (finance), and finance director.

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Job description: Corporate finance is about ensuring that funds are available for a company’s
business activities. Finance professionals study and forecast economic trends, balance risk and
profitability, analyze company reports and suggest improvements, take steps to maximize stock
value, manage funds by choosing investment portfolios, and apply the principles of financial risk
management.
After MBA in Operations
Operations management is becoming more and more popular among b-school aspirants, and the
number of MBAs in this specialization is going up. So is the competition for jobs. In this
scenario, MBAs in Operations can stand out from among job aspirants by learning about Six
Sigma and Lean methodologies, says a Purdue University official quoted in a website article.
Industries and job titles: Operations management originated in the manufacturing industry with
Henry Ford’s assembly line for automobile manufacturing. Today, it is a valued specialization
across all industries, including telecom, IT, and e-commerce. Job titles include supply chain
manager, logistics manager, inventory control manager, project managers, and operations
manager. With experience and specialization, MBAs can also secure consultant contracts.
Job description: As the name suggests, operations managers ensure the smooth processes and
smooth implementation of projects. MBAs in Operations are usually hired for looking after
responsibilities related to supply chain, logistics, vendor, and inventory management, sales
operations, and production management. They are also given charge of delivery, fulfilment, and
returns.

Internet Industry in India

After the dotcom kaput in 2000, Internet Industry in India has steadily emerged as a powerful
sector and is generating considerable worth for several shareholders. Over a decade, the sector
has witnesses the materialization of forceful, protractible business models and international
brands such as eBay, Google, Amazon and Yahoo. The international search engine, Google, is
unquestionably the major achievement story of the India internet industry.
For a firm that has been in continuation in the Indian internet market for 8 years has an existing
evaluation of around $120 billion, and is leading the market, followed by Time Warner, making it
the most expensive global media firm. Among the Indian dot-coms, Shaadi, Naukri, Rediff,

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Indiatimes, Yahoo India and Bharat matrimony are making considerable amount of revenues.

In addition, as per a research carried out by Nokia, the communications sector is estimated to
surface as the biggest driving component in India's GDP with a contribution of about 15.4% by
the FY2014.

Major Players in Indian Internet Industry

Post fiscal liberalization in the year 1992, several private ISPs have made a foray into the Indian
Internet market along with their own domestic loop and access infrastructures. Some of the
major players in the Internet Industry in India are:
 BSNL
 Tata Teleservices
 Hathway
 Airtel
 Reliance Communications
 Railtel
 Sify
 MTNL
 You Telecom
 STPI
 Netcom
 GAILTEL
 Spice

Government Initiatives for Internet Industry in India

The New Telecom Policy, 1999, launched by Indian government, specifies objectives in contexts
of initiating Telecom Network with an aim to attain telecom compactness of 15% by end of
financial year 2010. It also establishes goals for offering Net Access to all the provincial main
offices which it attained in the year 2002. In addition, the administration has started several
upbeat implementations in the propagation of the Internet facilities in India. Some of such
measures are mentioned as under:

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 In the year 2003, the government levied authorization charges on the ISPs which are the
most moderate permit, till 31st October 2003. Subsequently, only a coupon authorization
charge of ` 1 every year is forfeitable.
 There are no limitations on the amount of Service Providers in A, B and C categories.
 ISPs have been allowed to establish Global Gateways by executing commercial set-ups
with international Satellites Providers and associates.
 ISPs have been allowed to offer preceding mile accessibility for utilizing Radio and Fiber
Optics.
 ISPs have been allowed to offer ISP facilities via Cable Television Operators.
 Internet Telephony Services was launched for ISPs on April 1, 2002.
 The central administration has launched a thriving strategy to extend National Internet
Backbone (NIB) in India.
 The government has approved the law acknowledging electronic deals named
Information Technology Act, that assist in offering lawful structure for e-commerce in the
country.

Digital adoption in India has been growing rapidly

Recent disruptions in the telecom space have given a strong impetus to digital adoption in India,
accelerating the rate by at least a few years. While the total number of mobile Internet users is
expected to grow to almost 650 million by 2020, users with high-speed Internet access is
expected to be around 550 million. This can prove to be a huge boost for the Internet economy.
Data consumption is set to expand to around 7-10 GB per month per user by 2020 from the
current 700 MB per month per user.

By 2020, 4G-enabled devices are expected to grow six-fold to 550 million devices, constituting
about 70% of devices in use. At the same time, reliable high-speed data is becoming both
ubiquitous as well as affordable (data rates have reduced to less than one-third in just 4-5
months). The proliferation of digital content is also driving consumption. Mobile Internet users
are expected to nearly double from 391 million today to 650 million by 2020 while data
consumption per user is estimated to grow 10-14 times to reach 7-10 GB/month

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India’s Rising Ecommerce Industry

According to the Central Statistics Organisation (CSO) and International Monetary Fund (IMF),
with various positive factions thriving, including that of E-Retail,India has emerged as the fastest
growing economy in the world. As recent as few years, India has noted a constructive rise in
people venturing out for online retail. The past year’s ecommerce sales were approximately $16
billion with chances of market expanding up to seven times higher, according to Morgan Stanley.
Channelized by this robust investment in the sector and swift increase in the number of netizens,
various agencies predict that Indian e-commerce sales are expected to reach US$ 120 billion by
2020. Three of the main driving factors to supplement this rise would be the inculcation of niche
players, role of FDI and GST and how e-retail is changing the face of food and grocery for good.

Roles of FDI and GST in this e-rise

The government has been promoting the cause towards a prolific digital environment, for a while
now. Their most significant and often conversed regulation which impacts e-commerce is that of
FDI. As per prior law, FDI in ecommerce was not allowed for single brand/multi-brand
retail companies, although 100 per cent FDI is allowed under the automatic route in
wholesale/B2B e-commerce/ for companies providing “technology platform” services for
retail transactions. The burgeoning expansion of Indian ecommerce market has ensured in
cementing its value amongst conglomerate retail/ecommerce players from European and
American markets while the FDI regulations acted as a check in not letting foreign players set up
a majority base at the behest of our economy. Hence, the FDI has single-handedly uplifted the
structure and revenue scale for the benefit of all e-commerce players in the country.
The recent announcement of GST roll out, another significant reform would help e-retail
competitors streamline their supply chain and simplify their tax structure, while rationalizing
seamless integration of goods and services across the country. Moreover it will eliminate the dual
taxes being imposed on the current ecommerce eco system. The incorporation of GST ensures
absolute clarity in regards to application of direct taxes on transactions undertaken by online
businesses. It is the first step taken by the Government in clearing laws for e-commerce, in-turn
providing a stable environment to harness growth and development.
Apart from GST/FDI and rise of personalized offerings, e-retail is getting an additional boost
through nurturing Food and Grocery, under their expansive wings.

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FDI
Foreign-investment regulations recently unveiled for India’s online shopping industry are set to
shake up the sector.
India’s government at the end of March announced its official position on foreign investment
into the country’s rapidly growing e-commerce industry, stating that overseas investors could
take stakes of up to 100 per cent in e-commerce marketplace companies.
Despite the earlier lack of clarity on the regulations governing the sector, foreign investment had
already been flowing in, with home-grown online shopping majors such as Flipkart and Snapdeal
heavily reliant on foreign funds, while Amazon has also been investing heavily in the country.
The clarification by the government of the regulations could help to drive a surge of foreign
investment into the e-commerce sector, including capital and online retail groups from the UAE
and the wider Arabian Gulf region, analysts say.
But the new guidelines have also brought with them potential challenges, including preventing
online shopping websites from adding their own discounts to goods, a strategy very prevalent in
India where e-commerce websites battle to win over customers by slashing prices. Also, the
regulations prohibit foreign direct investment (FDI) into “inventory-based” e-commerce
websites, those that own the goods they sell directly to customers. The marketplace model, into
which 100 per cent FDI is permitted, by contrast is a platform through which products owned by
various vendors are sold.
“There is definitely going to be significant increase in FDI in the e-commerce marketplace
model,” says Bimal Raj, a partner at Singhi Advisors, a global investment banking firm based in
Mumbai.
He says that more investment from the Gulf is likely to start coming into India’s e-commerce
industry “once the FDI investment starts ticking in the sector surely”.
According to Morgan Stanley, the headline figures are attractive, suggesting enormous growth
potential in India’s e-commerce market, which is expected to reach a size of US$119 million by
2020. It forecasts that India will have close to 320 million online shoppers in 2020, up from 50
million last year.

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