Indian customers have a 'do it for me' culture, says domain registrar Godaddy India's MD

5 Nov, 2012

With more than 10 million customers worldwide and over 53 million domains hosted, is the largest domain registrar in the world. The company has offered .in domains in India since 2009. As internet adoption zoomed in India, Godaddy grew 91 per cent since July last year, taking its customer base to a 120,000 users in the country now. The domain registrar set up its operations in India in July this year and has set up a customer care centre in Hyderabad with 40 employees (its first outside the US), introduced local currency payment and more. The team is led by Rajiv Sodhi, who has worked for 11 years with Microsoft India at various levels. In an interview with Techcircle since taking over as MD of Godaddy India, in which Sodhi talks about its first-year plans and how it looks to compete with home-grown domain registrars in India.

Edited excerpts (For full video interview click here):

What is the mandate given to you by Godaddy for India? How are you building the team?

Although we've just entered the country, we have been offering .in domains in India since 2009. Since then Godaddy has seen a lot of growth in India. We're entering India at a time when Internet adoption is just set to take off. My job is to partner and drive that adoption. I have to make sure that we work closely with SMB customers, who are really going to be leading this internet charge. We need to become their one stop IT shop. We need to provide to them the best customer experience, for their transition into the internet.

As we started building a team of 40 persons for India, part of it (talent discovery) was factored into the location. Hyderabad in general is an upcoming city and has a strong pool of talent. It's one of the few cities in India where you can do multi-lingual conversations with customers. That was the first factor in dealing with the talent issue. Secondly recruitment, training and retention is our next focus. This will help us keep attrition rates very low.

Godaddy has nearly doubled its client base in India since July this year. Is this more a reflection of low base or depicts the pace of internet adoption?

Let's put this into context in terms of the Indian market. If you look at the population of the Indian internet users in the country, it is a market of 130 million people. That number alone puts India as the third most connected country in the world behind the US and China. That's big, but when you put that in the context of the country of 1.2 billion people, that's a 10 per cent market. So there is nothing but growth waiting for you. So we are in the very early stages of the market, the rules are yet to defined. What's the winning strategy or formula I don't think anyone knows right now. What works for this 10 per cent may not work going forward. Now from this 10 per cent, the customers who are there looking to create websites and buying domains is even lower -- it's pegged at three per cent. In the US, these customers make up 25 per cent of the total internet penetration. So in India at three per cent, if the right macro environment persists, you can sustain such growth rates.

The 91 per cent growth rate for us is not a concern, what we would focus on, is macro growth rates, things like internet adoption, growth in internet accessing devices. Is the government keeping the right policy on the ground, which I think it is. As long as these factors look promising, we can sustain good growth rates.

How does it translate in terms of revenues and what is your take on the addressable market?

In terms of revenues it will be very hard to say. What you can predict is your addressable market. How many organisations can you go after and how is that going to change. By 2014 the internet penetration is expected to jump to 300 million, which is the size of the US. So in the following two years we in India are going to be operating in a market, which will mirror the US market. Now what these users will spend on domains and hosting needs is going to be defined as we move forward. I don't think the current metrics is right simply because India is a very unique market. This is because the SMB internet adoption is very less with 30 per cent of all SMBs in India having only one PC. So we are facing the market at a stage when the user doesn't even know what his IT needs are going to be. Moreover, SMBs don't have huge IT budgets for themselves. The key will be how relevant we make our solutions, how we tune them to the market. Customer approach is another factor in dealing in this market. Because we need to keep going back to the customer because, once they buy website, then they will have to spend on web hosting, then after that they will need to secure their data. This is the process that will gradually bring them up this curve. So once they're at the end of it, only then we will know what customers are willing to spend and consequently the size of this market. But currently this market is in land grab mode.

Godaddy is the global market leader. How do you see the fragmentation in the local market and would inorganic expansion be under your radar?

When you think about domain names and websites and hosting, these are not cutting edge technologies. It's not like big data which is coming into the market just now. These are things that have been in the market for a long time. Consequently there are players in the market, but it is a fragmented long tail. Rather than think about each player's strengths and weaknesses, our biggest focus is the customer. Because, you have a customer in India who is not as educated about the Internet as the average customer in developed markets. We have customers who do not have a "do-it- yourself" but "do-it- for me" culture. As long as we focus on that, I don't see a lot of competition for us in this market. I don't see an uphill battle.

Historically, Godaddy as a company has had organic growth. We take pride in that and so there is no reason for us today to take an inorganic route at this stage. Our primary focus is to bring our assets from the US to India and stabilise them. The second job is to spend an inordinate amount of time understanding the customer and the market. Once we do these two things well, a step three will emerge and I don't know if that step three means go direct or indirect. So nothing at this stage points us in the direction of inorganic growth in India.

What are the targets you would be happy to achieve in your first year of operations?

For sure it's not going to be about employees and staff. This business is not like a system integrator where I'll hire a staff of ten thousand people and I'll be able to accumulate more business. But the two things that we will be focusing on strongly is getting all our assets from the US and localising them here in India. Twelve months from now we should be able to say this is Godaddy in true spirit. If you go to the US see what's there, then compare it with Godaddy India, there shouldn't be too much difference. The second thing is if we are able to work with the ecosystem here, with government bodies, with other players and software vendors, join hands and drive internet adoption in the country, that will be a very satisfying goal for us.

(Edited by Prem Udayabhanu)