The Evolution of Social Networking in India
While bloggers might be tired of reading about social networking applications (”social networking fatigue”) there is no question of the fact that it is a class of applications that are highly relevant. Indeed as far as India is concerned, the fatigue should only be warranted for the ‘generic’ social networking platforms that are emerging as major media corporations try to join the bandwagon by launching unimaginative Facebook / YouTube clones that will never really be able to compete in terms of service and user experience, regardless of what sort of ‘Indianization’ they claim as a competitive advantage.
Given that I believe social networking is here to stay in India, the next question is, how is it going to evolve? In order to understand, its probably useful to look at what’s happened / seems to be happening in countries such as the US / UK. I believe that the evolution social networking can be described in 4 phases:
(1) Phase I: Early adopters embrace truly ‘socially’ oriented websites
(2) Phase II: Early majority acceptance of social networking, and emergence of niche play social websites
(3) Phase III: Transformation of large players from websites to social ecosystems / platforms allowing for niche activity interactions
(4) Phase IV: Late majority acceptance, and Absorption of niche play social websites by larger social platforms
In Phase I, sites like Facebook, Hi5 and then MySpace started gaining visibility. The users tended to be of a much younger profile – highly socially oriented, more in touch with technology, more open to sharing information and exposing information to the ‘outside world’.
In Phase II, after the concept of social networking had been sufficiently vetted by the early adopters, the early majority, started accepting and participating in social networks. Entrepreneurs became aware the power of community driven platforms and started building niche / vertical social networks that began offering a place to exchange more interest specific information, beyond sharing photos, movies, ‘what’s on’ and other ‘emotional’ information. A niche social network is one that encourages sharing of information around a single ‘type’ of activity, for example sharing bookmarks to help discover sites such as StumbleUpon (”social bookmarking”). An example of vertical social network is Covestor.com - a platform for people who invest in the equity markets to share research and make better investment decisions.
Phase III saw the transformation of some of the larger social networks from ‘websites’ to ‘platforms’ – with Facebook leading the way. Allowing third parties to build their own applications, market them to the Facebook community and generate revenue for themselves has created an ecosystem of games and tools that that have increased the utility and therefore user engagement of the Facebook platform.
The west is now seeing Phase IV, where the the niche plays are starting to absorbed by the larger platforms. This trend will be driven by two factors: (i) larger players (such as incumbent internet companies, social network and media conglomerations) simply have greater user understanding, user touch and marketing firepower (ii) users are limited in their time and are therefore less willing to go to several different sites, they would prefer to have as many of their needs fulfilled in one place. An example of a niche acquisition is StumbleUpon by eBay.
Having said this, larger platforms are always going to be at the disadvantage of not being built from ‘ground up’ to serve the specific purpose that niche social networks fulfill. Those niche social networks (such a bottletalk.com, or shelfari.com) that are so specific that they only address a very occasional need are most likely to be ‘absorbed’ or made redundant by competing applications on the Facebook platform. Other sites, which are more time consuming, where the nature of interaction is very different from socializing interactions, requiring a lot more contextual content may continue to thrive as independent platforms for longer.
What about the Indian market?
The Indian market is marked by quite a bit of disparity in terms of where specific sections of the Indian social networking population are in their level adoption. I would assert that the majority of Indian sites and users are closer to Phase I, than Phase III. There are also a small number of India focused casual gaming social networking applications being hosted on the Facebook platform.
Social networking is quickly being adopted by savvy Indian teenagers and college students, and is now also making strong in-roads amongst recently graduated young professionals. However, there are still issues around internet penetration – while there are 50mn+, many of them access the net through internet cafes and broadband penetration is still only at 4mn.
A number of Indian social networks have been around for a while (e.g. fropper, minglebox), but we haven’t really seen very many niche Indian plays just yet. Therefore, while there is ample room for niche plays, the themes of these plays must be broad enough to attract a meaningful number of people, and the offerings should have geographic or cultural barriers to entry.
Therefore, while there are many people who enjoy wine in India, they would not be sufficient in number to warrant an Indian version of bottletalk.com. Indeed there should never be a reason for such a site because an Indian wine lover’s needs would be sufficiently fulfilled by bottletalk.com itself. Having said this, there are some companies that have been able to, in my opinion, able to identify the verticals / niches that are broad enough to make business sense. For example, platforms for investors and traders to meet and share research (read my post on the need for a *credible* social investing site in India).
A major trend that we’re seeing in India is that large media houses have jumped onto the social networking bandwagon quite early on, with Reliance launching BigAdda, Rediff launching ‘iShare’ and the TOI group launching ‘itimes’. Rather than purchasing social networks that started off as entrepreneurial ventures (as it happened in the US), these large organizations are developing platforms from scratch themselves.
While the marketing reach of these large players will do much to increase the pace of acceptance of social networking amongst Indian internet users, entrepreneurs might find it difficult to survive. This is true especially if their idea is seen to be becoming popular by these larger organizations.
Fundamentally, these larger organizations have significant advantages over smaller players that are innovating in that they can quickly replicate the innovation and market it far more aggressively. Additionally, many of these have existing businesses, which they can leverage to enhance their own offering.
Overall, I believe that in India, Facebook, with its superior application will dominate the ‘platform’ category. You might find that some Indianized social networks might be able to survive because people have already built up their networks and therefore find it difficult to move, but that too won’t hold the fort. The most influential individuals will eventually make the shift to the superior platform. Once Indian social networks, start seeing this trend, they’ll try to sell out - but there might not be too many buyers. However, there is still some time before this happens. In the mean time, as the bigger corporations push social networking onto the population through aggressive marketing (e.g. BigAdda), acceptance of this mode of interaction will continue to rise. With this acceptance will come the opportunity to set up niche / vertical plays - and eventually - it will only be those niche / vertical plays (that may be standalone or applications on existing social networks) that will survive.
Related article: Trends around Social Networking, by Piyush
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