Press Coverage

A much-needed market correction has created secpticism about the dotcom hype

The crash, or correction, call it what you may, has created many sceptics. However, no one is questioning the Internet. According to Jay Desai, Chief Executive of the Mumbai-based Universal Consulting, it led to "an entrepreneurial spirit being unleashed". "And if people can get ideas funded, then there is nothing wrong with the dotcom phenomena," he adds.

The initial rush has largely been in the business-to-consumer (B2C) segment. And it is these ventures that have fallen short of expectations. To set up a business-to-business (B2B) site, it is necessary to have an understanding of the industry one is operating in, its suppliers and customers. Hence, these are fewer to come by. Take Sajjid Mitha's Polymerupdate.com, a B2B exchange for the polymer and plastics' industry, for which Universal Consulting developed the Internet strategy. The idea stemmed from Mitha's Far East Trading Co. that trades in polymer.

More important is the time taken to implement the project itself as speed to market is more critical on the Internet than the real world. "You lose valuations if targets are not met. And chances are you may get displaced," says Universal's Desai. And the URL itself is important, from a recall point of view.

For B2B, transactions and advertising have been identified as two revenue models. "You can advertise on B2B as there are mainly serious users who will log on," says Desai. Mumbai-based Universal Consulting essentially adds value to their dotcom clients' business strategy before they approach a VC, just so the idea is viable and fundable. In addition, the company is also helping old economy companies move towards the new economy. It is already working on business-to-business portals for industries such as polymer, insurance, healthcare and shipping.

According to Desai, the Internet will rub off on the bricks-and-mortar businesses as well. In fact, "for those adapting to the click-and-mortar, it will be the driver for improving and efficacy", he says. In cases where a brick-and-mortar operation is supporting a dotcom, there are higher chances of the dotcom succeeding.

However, no one is writing off the Internet. Says Universal's Desai, "Today, as we are in transition period, things like high valuations happen. Later on, there will be no premium attached to the business."