Monday, September 1, 2008

Facebook, Orkut, LinkedIn enable small biz scale up

http://economictimes.indiatimes.com/rssarticleshow/msid-3429347,prtpage-1.cms

A small, pioneering group of entrepreneurs is proving that peer-to-peer networking sites can be fertile grounds for business. Sites like Facebook, Youtube, LinkedIn, Ryze, etc, which initially targeted young, urban crowds the world over, have found a new relevance in the age of Enterprise 2.0.


The massive growth in Internet penetration levels in the country, as also the widespread popularity of these sites, have created new vistas for SMEs to strut their stuff on mass network. The best part is that most of this is free of cost, there is direct (almost human) contact-and one is free to be as creative as one wants.

According to technology and market research firm Forrester Research, the demand for Web 2.0 tools, such as wikis, is expected to grow strongly in 2008, with the IT sector among the first to embrace them. Web 2.0 tools are Internet tools that allow multiple users to share data using the Internet as a platform.

Another report by LodeStar Universal estimates that there are 17.8 million active Internet users in the 16-54 age group in India, many of whom would have also used tools, such as instant messaging and discussion forums. Around 15.1 million or 85% of such Indians read blogs online, while 15 million users watch video clips. The case in favour of taking your small business online is compelling.

The Narula Travel Group, based in New Delhi, was one of the earliest companies off the block. It has uploaded about 30 travel videos depicting various Indian themes, such as the famous dabbawalas, Indian religions and places to see on Youtube.

It was a smart move on the part of the Narulas. A large chunk of their business comes from foreigners who want to visit India for the first time. These exotic videos of the Indian landscape are designed to generate curiosity and interest in the mind of the viewer.
Sapna Jewels specialises in customised diamond jewellery at competitive prices. When Gupta was looking to exand her business, she decided to leverage Facebook to her advantage. She set up a group on the website for her company and using Facebook's built-in advertising mechanism, released a series of ads aimed at young, affluent women in key markets of India, Pakistan and the Middle East.

Her group, 'Sapna Jewels', achieved a membership count of 750 women in the first two months itself! The members include working women, Bollywood starlets, corporate high fliers, and socialites. From the first month itself, Gupta had orders coming in from India, Pakistan and the Middle East. The group also spread word about Gupta's products to their contacts. "I have used Facebook's networking to maintain existing customers and get new ones, through them," says Gupta.

The women who join her Facebook group can access catalogues online, discuss design changes via email or phone and make payments via credit cards and online bank transfers. The lower overhead costs of this efficient business model enable Gupta to keep prices up to 40% lower than her big-brand competitors, she claims.

"We have much lower margins, at 10-15%, which keeps the price lower. Also, we have no expenses on new stores as we operate online and get the jewellery designed in our workshop," says Gupta. In the last three months, Sapna Jewels has executed 18 orders, with the average individual order value ranging from Rs 80,000 to over a lakh.

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