Where is India in Internet Adoption?

Where is India in terms of usage of the Internet? One way to think about this question is to look at specific application areas. I saw two fragments of evidence today:

Online trading
Writing in Hindu Business Line, Rajalakshmi Sivam has interesting information about the share of online trading on NSE:

2006 Today
Number of trades 20% 33%
Rupee turnover 15% 25%
Railway tickets
Writing in Business Standard, Sharmishtha Mukherjee says that 34% of the tickets sold by Indian Railways were sold online.

Ordinarily we might have thought that the rich trade on the stock market, and have better Internet connectivity. So one might have expected a bigger share for Internet commerce with online trading. But it’s quite striking to see the proportion of online trading at NSE (33%) line up almost exactly with the proportion of online ticketing at IR (34%). IR users are likely to not have broadband at home: they’re probably using Internet cafes.

Three other areas are of interest to me in thinking about this:

  • Does someone know about the extent to which banking transactions have shifted to the net?
  • Does someone know about the extent to which airline tickets are purchased over the net. Speaking for me, perhaps 80% of my air travel gets done through cleartrip.
  • Is there traction with craigslist in India? The few times that I have looked, I’ve not been impressed at the liquidity.

Turning to supply side concerns, there are two problems. The first is bandwidth. India does fairly badly on broadband, owing to policy impediments. We’re all waiting for the 3G rollout to get a quantum leap in bandwidth.

The data above, for NSE trading and Indian Railways, is the picture that we’re seeing in pre-broadband India. I think that in the coming five years, a full quarter of the households of India will have a broadband connection (either through a computer or through a smartphone), and that will generate profound change.

The second constraint is development talent. By and large, most websites done in India are just bad. It seems that computer programmers in India do not get the Internet. There’s probably too much of mechanical use of tools and techniques learned on Windows PCs; there’s probably too much Microsoft in the formative years of young people. More study of good quality systems is called for [link]. The best role model that I show all software developers, about a decent e-commerce website, is cleartrip. A bunch of people who get this need to start a hall of shame for badly designed web systems and e-commerce systems in India. My suggestion for the first case study to write up there is: `Bhuvan’ by ISRO.