Business - Online Medium enable small size biz scale up

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. The individual can then choose to visit the Narula Holidays website, where he/she can read up on the packages offered by the company. Rajat Roger Narula, director, Narula Travel Group, says, "We decided to get on Youtube sometime during late 2007. We weren't sure if this would work; we were sort of testing the waters. But the response has been simply great! We keep getting many emails from foreigners saying that they loved our videos and want to go in for one of our special holiday packages." Narula is so impressed with the medium that he plans to go in for paid in-Youtube video advertising, which will make his company even more visible to netizens. Like him, Ree Diwan, artistic director of Bangalore-based Rock Around The Clock (RATC), is another avid networker.

Rock Around The Clock, which was founded by her husband Prithvi, is a dance company specialising in various western dance forms, such as Jive, Salsa, etc. Diwan believes that being on Youtube has helped RATC because "it is the easiest way of showing a client what we do". She adds, "We get a fair bit of business indirectly through sites like Youtube and Facebook. The advantage here is that you know how well you're connecting with the end-user. All you have to do is keep track of the number of people who view your videos and participate in your community activities." A Youtube spokesperson says, "Marketers on our website are excited by their ability to find virtually any audience they want to target, and create for these viewers advertising and content that engages them to interact with their brand." Sudha Kumar, co-founder of Prayag Consulting, believes that for small and midsize businesses, the greatest challenge lies in accepting that branding themselves on social networks can be highly beneficial. "LinkedIn, for example, is widely used by recruiters to hire quality talent. BPOs prefer Orkut to showcase themselves. A number of small firms have started corporate blogs or communities which are interactive as well. They are slowly but surely learning the power of viral marketing and how it can be harnessed to build a groundswell of favourable public opinion." Sapna Gupta founded Sapna Jewels last year and it might have been just another jewellery shop in the teeming business lanes of Mumbai. But that was then. Three months ago, she opted for a new business model that merged old-world craftsmanship with the networking power of Facebook, and got her clients sitting right at home. Sapna Jewels specialises in customised diamond jewellery at competitive prices. When Gupta was looking to expand her business, she initially thought about using all the traditional methods of marketing, such as sending out mailers, taking part in jewellery exhibitions and hoping for positive word-of-mouth references. But then 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. For many individuals, the Internet medium presents the opportunity to approach would-be clients in a whole new way. Take career marketer Deep Banerjee, for example. Banerjee started off as way back as 1985, when marketing and sales were considered more or less the same thing.

Over the decades, his connections grew and his one-man firm, Marketing Pundit, managed a few successful events, such as the national-level 'Powerplay' competition for school children. Banerjee, who has been a LinkedIn user since May 2008, says that he was drawn in by some of the school kids he keeps in touch with. "I wasn't tech savvy at all, but once I joined LinkedIn, my whole world changed," he says. Banerjee regularly converses with top bosses at Marico, Dabur, Hindustan Unilever and other A-list Indian corporates through the site. "In a business where the response rate is around 6-7%, LinkedIn gives me a 50%-plus response rate. And by tailoring my invites to the recipient's preferences and needs, the conversion rate (proposals to deals) is also phenomenal." Today, Banerjee is used to approaching people (in person) and getting a response like 'Oh yes, I know you through LinkedIn!' Banerjee quips, "They say that networking sites are great for business. I don't know if everyone makes money on these sites. But one thing is true-the moment you get results, the medium becomes worth it."