Picture this: 1) Google, Facebook vis-à-vis Guruji, Ibibo. 2) MakeMyTrip, Naukri, Sulekha vis-à-vis Expedia, Monster and OLX. Over the years, we have observed that categories like search engines and social networks in India have been dominated by online companies from foreign countries; whereas in categories like online travel, jobs and classifieds, Indian companies have always had an upper hand. In order to explore the reasons behind this trend, AlooTechie spoke to some of the industry leaders and investors to understand their views on the same.

Sanjeev Bikhchandani, founder and executive vice chairman, Info Edge India (Naukri.com), said that whichever categories need localisation, will have Indian companies do better. Moreover, factors like sales force and company relationships also matter a lot while building the reliability of the brand in the market, Bikhchandani added.

Deep Kalra, founder and chief executive officer, MakeMyTrip.com, was of the view that offline execution and fulfilment is what makes local players lead categories like online travel, classifieds and jobs in India. "Every category that needs some sort of offline execution or fulfilment will have a local player leading that particular market. So, not only in India, even internationally, services needing fulfilment succeed in that particular geographical market. Expedia is the numero uno in US, but not even in top 5 in India. Google will always be a leader in search across all English speaking markets. It will be interesting to see how Amazon devises its strategy in India when it enters the country,' Kalra said.

Satya Prabhakar, chief executive officer, Sulekha.com, believed that culture and country neutral platform services like social networking, email, search, video sharing, games and photo sharing will always be dominated by global MNC players, since they have tremendous advantages of scale in investing for product development, infrastructure, marketing and sales. "This creates leadership positions for Facebook, Google, Yahoo, YouTube and Flickr in their respective categories. Simultaneously, the decline of country-specific sites that try to do the above in countries like India (social networking, games, email, search) are testament to the difficulty of India centric players to scale their products and sales teams to cater to user and customer requirement. The odds of their success are slim, if not nonexistent," said Prabhakar.

Satya Prabhakar further said that localized country-specific online services like ecommerce, classifieds, yellow pages, B2B advertising, jobs etc are typically dominated by players in respective countries given the multiple nuances across product development, marketing, feet-on-street sales force that is required in the country. "For instance,  BuscaPé dominates ecommerce and comparison shopping in Brazil despite eBay being present there for more than a decade. Similarly, classifieds is mostly served by sites of Mercado Libre and BuscaPé in that country. Similar examples of local sites dominating in multiple countries of Europe for the above services exist. In India, we have seen tremendous success of companies like IndiaMart, MakeMyTrip, Cleartrip, Naukri, BharatMatrimony, Shaadi etc that offer customized local services in the country. I would add the success of our company Sulekha.com to focusing on local India-specific and NRI-specific services of classifieds, yellow pages and B2B that we have chosen to focus on," added Prabhakar.

Faisal Farooqui, founder and CEO, MouthShut.com, said, "The general public really doesn't care if the site is Indian or foreign. What is really important for the average user is how famous the website is. Indian internet audience is still not too fond of early adoption. They wait until a site becomes famous, before adopting it. On the contrary, in countries like US, there is a whole sub-culture that is constantly exploring innovative web startups in beta or alpha mode. This sub-culture is responsible for the early adoption of Facebook or Twitter or even Friendster for that matter." According to Farooqui, Facebook has been a big phenomenon in US since early 2005, but very few people in India had heard about it until 2007. Similarly, Orkut was a big phenomenon in 2006 in India, while the same was unheard of in US then.

Kavita Iyer, co-founder and CEO, MingleBox, opined that typically, products which are pure technology or highly technology intensive have come out of the more developed markets from an internet and technology perspective like online search. "Social networking has an additional element of the 'network effect'. So, while the sophistication of the product is very important, since networks are contiguous, once a website has a lot of scale, it will keep adding to it and local variants are tougher to build unless there is a distinct difference like language,” Kavita Iyer said adding, "In other categories, success depends a lot more on getting the whole business model right which maybe local delivery mechanisms, sales and distribution channels, on the ground alliances etc and this is where the Indian internet companies are clearly succeeding."

Bringing in an investor's perspective, Niren Shah, managing director, Norwest Venture Partners India, said that certain categories will be dominated by global internet companies and others by local companies in India. According to Shah, global companies will typically dominate categories which are more cross-border in nature like search and social networking and do not require much localization or customization.

Niren Shah further explained, 'Certain categories have to use cases which are global, for instance in search, your query is not always limited to India. Similarly in social networking, you want to connect with friends both locally and globally. In VOIP like Skype, one caller is typically in India and the other one is global. In these cases, the global counterparts help evangelize and spread the word to the Indian audiences and help such a global product to proliferate onto Indian shores without much marketing. Great examples of theses are Google, Facebook, Orkut, LinkedIn, Twitter and Skype.'

Speaking further, Niren Shah said that it is difficult for a global company to address an Indian audience without having a local team or presence unless there is no real need to localize the product or content. "A good example of those requiring an India leg would be ecommerce companies where customers are in India and business development activities are required to reach out to them. Alternatively, it could be online travel companies which are catering to the preferences of an Indian demographic," Shah added.

Speaking about how long do they see this trend continuing and whether Indian entrepreneurs should at all invest in developing pure-play online businesses, Deep Kalra of MakeMyTrip opined that there is obviously no harm in trying out different things, but Indian entrepreneurs should have to be contented with the fact that they will have to compete with global biggies and hence have to figure out a survival strategy. "As I said, when Amazon comes to India, it will be interesting to see how they plan their strategy and how the Indian counterparts cope up," added Kalra.

Satya Prabhakar of Sulekha.com opined that the trends described above would continue well into the foreseeable future. "This would make leading portals in India to re-evaluate their service offerings. It's best to cede areas of email, social networking, video sharing, search (generic search), photo sharing etc to the global players – and focus on local, country-specific services. The game is over for local players. No entrepreneur in India can scale up to the resources that Google or Yahoo can invest in solving problems in the above areas across product development, marketing and sales," Prabhakar said.

According to Faisal Farooqui of MouthShut, several things have to change before we see Indian websites becoming global phenomenon. "Factors include a good product team; unfortunately, barring a few, most websites designed in India have poor interface, lack usability and have not gone through serious QA (quality assessment) process. As a result, the user abandons it beyond few pages. This whole thing needs to change; even a website of multi-billion dollars ICICI Bank -- a bank that is a pride of our collective economic growth -- lacks usability, has coloured fonts that are not readable and still has interfaces which should have been abandoned in 1999. Secondly, we need more internet penetration in this country. Many of my fellow Indians are still using dial-ups. ISPs promise 2mbps connection but effectively provide less than 0.5 mbps (512k). Unless we introduce unlimited, hi-speed internet, people will be reluctant to sit and surf beyond their essential needs. An internet sub-culture like the types we see in Europe and US is not possible unless the user is constantly connected. I hope to see some improvement in this area with the launch of 3G," Farooqui opined.

Faisal Farooqui further said that nobody can predict trends on internet startups, but he would advise aspiring entrepreneurs to focus on simple ideas and prepare for success rather than prepare for failures (entrepreneurs often tend to spend a lot of time and resource on 'what if' scenarios) on categories such as travel, B2B, which have a lot of potential for Indian entrepreneurs.

According to Kavita Iyer of MingleBox, Indian entrepreneurs have to be highly active and sophisticated users of the internet and new media to be able to build pure products and breakthrough applications. "Indian entrepreneurs should follow their instincts for real consumer and market needs and pain points and then put their abilities to work to find solutions using the internet. There are enough examples in education - a space that MingleBox is focused on where students, parents, teachers and the whole eco-system can benefit from better information, better learning, and access to the right educational and career opportunities. That's where we are focused on trying to make a difference and it's a fascinating space," she said.

"The encouraging trend is younger and more tech savvy professionals in India are starting to roll up their sleeves and building more stuff - but we need to see a lot more of that happening. We also need to see larger masses of Indian consumers and businesses using the internet to solve all kinds of daily problems - that is the breeding ground of successful products and we need a lot more of it in India," Kavita Iyer added.

Niren Shah of Norwest said that Indian entrepreneurs should either try and build global companies from India which can proliferate across the world, or build companies which have a strong local edge which cannot be easily replicated by companies which are not in India. "This could be something as simple as a deeper understanding of an Indian user's preferences, targeting a niche Indian audience or something tangible like a local sourcing from India vendors," Shah suggested.