Investing in India
India is growing. Fast… It’s the second-fastest growing economy on the planet. And it’s not surprise that India is brimming with investment opportunities…
The emergence of India as a powerful economic force is one of the most extraordinary investment stories in decades.
Just recently, American Express predicted that India’s 100,000 ‘dollar millionaires’ will grow by 12.8% a year for the next three years. That’s a whole lot of rich Indians. What’s more, McKinsey Global Institute predicts that the average Indian’s income will triple by 2025
The country is set to capture 1% of global trade soon, while merchandise exports have grown an average of 24% a year over the past four years, according to Economy Watch. Goldman Sachs predicts India will rise to be the third largest economy in the world by the year 2035.
And the list goes on…
It’s not too late to invest in India. India is a country where progress meets poverty, and new ideas meet with old traditions.By all measurable standards, India has a long way to go before its economy matures.
And that’s what makes investing in India so appealing to informed investors…
Two-thirds of Indian workers are employed in some aspect of agriculture. And almost 30% of Indians live below the country’s poverty line.
One of my co-workers traveled there last year in hot pursuit of new ideas on how invest in India. He described in detail the country’s changing landscape. It’s a place where brand new highrise buildings abut a dirt road and a field of farm workers and cows, he said.
It literally is a land where high-tech meets low-tech.
This is the kind of parody I found when researching the impact of the Internet on India. Only in a place like India could a centuries-old tradition like arranged marriage meet the Web in such a way to create a national phenomenon…
I’ll be the first to admit that my ignorance on the subject of Indian marriage got the best of me when I first began my research. At first, I figured that these matrimonial sites were dating services like we see here in the United States, such as Match.com. I assumed the “matrimonial” part was merely a translation issue or just their way of describing dating. I was only partly correct…
Culturally, it is perfectly acceptable in India to announce to the world that your son or daughter is ready for marriage. In fact, fathers, mothers and siblings who are trying to find a match for their family member created many of the profiles on these sites.
After searching through many of the testimonials on the sites, it became clear to me that most of the married couples became engaged after a very brief courtship period. Many were married within months of first meeting each other.
As it turns out, these matrimonial sites fit in nicely with Indian culture. Sites like BharatMatrimony.com prominently display astrological information on members’ profiles. These horoscopes are taken into account when finding a life partner to determine compatibility.
I came across a telling passage online that helped me better understand how marriage is viewed in India: “A marriage in India is considered a marriage of families rather than the marriage of individuals.”
I mentioned that Yahoo! and Canaan Partners invested $8.65 million in BharatMatrimony.com, one of India’s largest matrimonial websites. Execs at BharatMatrimony told ZeeNews.com that they expect to register 2.5 million users in 2006-07, as compared to 1.5 million that were registered in 2005-06.
And these marriage websites are no passing fad. Statistics show that the reason 15% of Indians are online is for matrimonial searches. And if you think people aren’t really using services like this, think again.
Since BharatMatrimony.com went online in 1997, it claims to have facilitated more than 700,000 marriages all over the world. As of now, the site has a staggering nine million members.
Another matrimonial site, Shaadi.com, claims it receives more than 50 testimonials a day from happy couples. This site now posts more than 3.6 million photos of singles, and more than 710,000 success stories have been reported to the company.
The bottom line is this: Investing in India could be the profit opportunity of a lifetime. Please stay tuned for more articles in my “Investing in India” series. I’ll bring you breaking ideas on how to invest in India along with the hottest stocks that the Penny Sleuth is following right now!
As a free subscriber of the Penny Sleuth, you’ll learn about promising opportunities with small caps and penny stocks. In fact, you can read all about the hottest international and U.S. stocks in the Penny Sleuth Free daily email.
More from Greg’s series on Investing in India…
Penny Sleuth Special Report: Investing in India part 2
India’s Growing Internet
The United States is home to approximately 300 million people. More than 210 million of them are Internet users.
Every month, these people spend an average of 32 hours online, logging on to an average of 64 unique websites, according to the Nielsen NetRatings.
I think it’s safe to say that the online market in the U.S. is mature, if not completely saturated. But what about some of the more emerging, faster-growing economies of the world?
Take Asia, for instance. With more than 3.6 billion people, the continent is home to approximately 54% of the world’s population. But only about 10% of them are online, according to Internet World Stats. Just to give you an idea on how small a number that actually is, about 25% of the rest of the world is online.
However, Asia’s online population is growing by leaps and bounds. The number of Chinese online increased by about one-third during 2006 to 132 million people. Overall, China’s online population has increased 486% since 2000.
But that’s nothing compared to India.
India’s online growth rate is staggering. The country’s Internet population has grown 700% since 2000. And there’s still plenty of room for it to expand.
So how can people like you invest in India?
First, let’s look at the numbers…
More than 1.1 billion people live in India. But only 40 million are online — only 3.5% of the total population. In mature Asian Internet markets, such as Hong Kong, Japan and South Korea, there is a saturation rate of about 68%. Even if India reaches only 50% saturation over the next several years, this will mean more than 500 million new Internet customers.
Compare this to the 210 million Internet users in the U.S., and you can see the gigantic potential.
The government is even helping things along by reducing barriers for telecom providers. Also, Internet access is surprisingly affordable. According to the Internet & Mobile Association of India, a monthly broadband subscription can cost as little as 199 rupees, or about $4.50.
On top of this, there are three other factors that are paramount to the success of online growth in India.
The first is cheaper computers. India’s IT and Telecom Ministry is heading an initiative to cut the cost of PCs, which would, in turn, help more of India’s emerging middle class find their way to the Web. According to Internet & Mobile Association of India (IAMAI), the initiative is set to make computers available for less than 10,000 rupees — or $226.
Next is the increase in website registrations under the “in” domain. According to the IAMAI, these registrations surpass 150,000. This shows that more local content is being created. And more relevant content will attract more Internet users. This is also a bonus for savvy investors, who will have a whole new sea of foreign online businesses to research.
Our third success factor is a bit unusual, but it’s a trend that can’t be easily ignored. While a majority of Indians log on for e-mail, chat and job searches, matrimonial sites are rapidly increasing in popularity. Statistics show that 15% of Indians go online for matrimonial searches.
In fact, matrimonial sites are so popular that even some major players are placing bets on their success. According to the India news site ZeeNews.com, Yahoo! and Canaan Partners invested $8.65 million in BharatMatrimony.com, one of India’s largest dating websites. Execs at BharatMatrimony told ZeeNews that they expect to register 2.5 million users in 2006-07, as compared to 1.5 million that we registered in 2005-06.
So while the online trends in India are obvious, the best ways to properly invest in India’s coming Internet age are hazy at best. I’ll sort out some of the strongest companies in the coming weeks and bring them to you in the Penny Sleuth…
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