India's poor embrace internet age

By Ketaki Gokhale

In a two-room shanty with no running water in northern Mumbai, Darshana Verma makes tea on a small stove. On a bench nearby, her 18-year-old son, Vishal, messages Facebook friends on the keypad of his Nokia smartphone.

"This is the internet age," said the 36-year-old domestic helper, who spent more than half her US$300 ($357) monthly income on Samsung Electronics and Nokia mobile phones for her children.

"Facebook is there, all these things happen there now - they make friends, maybe they can even find jobs there."

Cheaper internet-ready phones may make India Facebook's biggest market after the US next year with more than 50 million users, according to Nielsen.

As Google's rival social network also gains in popularity, companies including Pepsi are boosting internet advertising to reach the 352 million children under age 15 who are coming online.

"There's a mob out there," said Tarun Abhichandani, group business director at IMRB International, part of WPP Group, the world's biggest ad agency. "India has a young demographic, and it's social networking that brings them online."

The number of active accounts in India jumped 85 per cent to 32 million this year, according to socialbakers.com, which tracks user data at the Palo Alto, California-based company.

That is the world's third-biggest behind the 153 million in the US and 39.2 million in Indonesia.

Mobile handset sales in the world's second-fastest growing major economy will surpass 206 million units annually in 2014 from 175.9 million last year, Gartner forecasts.

Pepsi and Viacom's MTV have been quick to tap the popularity of Facebook in the South Asian nation through promotions and contests. Their Indian pages have garnered 1.4 million and 2.9 million "likes", respectively.

"Indians want brands to communicate with them using social media," said a Nielsen report, adding that 60 per cent of Indian social-media users were "open" to being approached by brands.

Online advertising in India rose 26 per cent to 9.9 billion rupees ($267 million) in the year ended March, according to IMRB. Advertising on social networking sites grew as much as 65 per cent from the year before.

"The number of internet users here is on the rise and is going to keep rising for some time," Abhichandani said.

"Advertisers are realising that."

Facebook opened an office in Hyderabad in southern India in September to serve users, advertisers and developers in the country and around the world, spokeswoman Kumiko Hidaka wrote in an email. The company is trying to improve service by working with mobile partners and "building relationships with India's strong network of developers and entrepreneurs", she said.

Facebook is blocked in China, the world's most-populous nation. The social-networking company has held talks with potential partners about how to gain a foothold in the country, a person familiar with the matter told Bloomberg News in April.

China, the world's largest internet market with more than 450 million internet users, bans pornography, gambling and content critical of the ruling Communist Party.

"Facebook has chosen to focus on open markets, rather than markets like China where there's censorship and control," said Foong King Yew, vice-president of research at Gartner in Singapore. "India's the biggest of those. It's rapidly growing. It's an untapped market."

A mobile phone allows 22-year-old student Rachel Thomas to log on when she is at school.

"Facebook is the first thing I do each day," said Thomas, who is studying for a master's degree at the Delhi School of Social Work and counts about 1000 friends on the social-networking site. "I don't know anybody who's not on Facebook. My mum's on Facebook. My whole class is on Facebook."

Twitter is also gaining in India, helped by iconic users like Bollywood star Shah Rukh Khan, business tycoon Anand Mahindra and former minister Shashi Tharoor.

LinkedIn has 10 million members in India, its second-largest market after the US, according to the Mountain View, California-based company's website.

Facebook faces new competition from Google+, which started in June. The service has had 6.44 million visitors in the US and 3.62 million in India, not including mobile usage, said Andrew Lipsman, ComScore's vice-president for industry analysis.

Google is testing a mobile application in the US and India that allows users to send status updates via SMS without an internet connection. Most phone users in India do not have internet browsing. Facebook has a similar service in India.

Research In Motion said its growth in emerging markets such as India and Indonesia had largely been driven by social networking applications like Facebook for BlackBerry 2.0. Rival Huawei Technologies sells phones with a "Facebook button".

"You press it once and all your social networks are integrated in one - you don't have to log in everywhere," said Paul Scanlan, vice-president of solution and marketing for the South Pacific region at Huawei.

A big draw for many Indians is the falling cost. Phones with internet browsing capability sell for as little as US$23.

For Verma, who never learned to use a computer and saved for 10 months to buy her elder daughter's phone, that gives her children an opportunity she didn't have.

"What I don't know about - Facebook, internet - they need to know about," she said. "It is worth the expense."

- Bloomberg

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