Indiatimes.com has decided to down the shutter of its email service by announcing that it will stop accepting new users from 19th November 2012 and all “Service” will be permanently shut down with effect from 18th February 2013. Indiatimes Email was one of the first Indian email service providers in the country along with Rediffmail and Sify with Network18’s In.com and Zee’s India.com joining the bandwagon later.

The closure of Indiatimes email service has raised questions over the future of other Indian email service providers as people are shifting to major international players like Gmail from Google, YahooMail by Yahoo or to Microsoft’s Hotmail.  A recent study by Comscore shows that Google’s email service has become the largest email provider across the world followed by Hotmail and Yahoomail with figure of 287.9 million, 286.2 million and 281.7 million unique visitors respectively.

Coming to India, of late it has been seen that Indian email service providers have been facing the problem of customer stagnation and the existing ones drifting to top three international platforms. The upward growth of Gmail or YahooMail has been because of the various services they offer through their email in terms of better search, enormous space (memory), strong spam and virus filters along with continuous up-gradation which the Indian players could not provide. The other reason has been that Indian players were not able to generate revenue from advertisements as the advertisers have been pulling themselves out in absence of traction or eyeballs.

India Digital Review spoke to some of the industry experts on the viability of other national email services available in India.

Mahendra Swarup, President, Indian Private Equity & Venture Capital Association and Chairman & Chief Mentor at Smile Interactive Technologies Group, who was previously the Managing Director & CEO at Times Internet, said, “Earlier, email was considered as the gateway to internet usage for consumers, but with the advent of Google, the need shifted towards search. Moreover, Indiatimes was not investing much on its email service.”

“Email itself cannot be monetised. It needs data mining. That is why Gmail is still doing well despite coming 10 years later to Rediffmail and Indiatimes email. Indian services didn’t do that. Moreover, the loyalty factor in emails is very low as people prefer to use different services for different purposes, with one primary one,” Swarup added.

Alok Kejriwal, CEO and Co-Founder, Games2win, talking to IDR, said, “Indian email services are non sense. People are stuck to those mails and have to carry them on their backs like Vikram carried Baitaal. They are Doordarshan when the world is watching Star World. Gmail has branched into running mails for companies like mine. All that is needed to run mails are servers.”

Talking about the primary purpose of email being retention of customer rather than generating RoI, Alok Kejriwal said, “Are you kidding? Have you used gmail? E-mail with google / msn / yahoo ads is probably one of the most profitable businesses around. User retention is lifelong. DAU / MAU (Daily Active as a per cent of Monthly Active is insane), people check their mails more often than they play angry birds.  It’s a gold business if you have scale.”

B.G. Mahesh, Founder & MD, Greynium Information Technologies, opined saying, “Gmail and Yahoo mail are the leaders clearly in this space. Such services are global in nature and it is difficult for a pure Indian player to be a big player. But Rediffmail has been growing well over the years.”

“Monetization is always difficult for email providers. I am sure they have done a detailed study before arriving at a decision. One should appreciate when such bold decisions are taken. The other product which falls into this category is social networking. None of the pure Indian social networking sites have become big, everyone wants to be part of a global platform like LinkedIn, Twitter and Facebook,” Mahesh added further.

What Lies Ahead?

There are large numbers of Indian email service providers and they might be facing the same problem and might also have to pull the plugs out of their email services unless they change their strategy and focus related to email services.  Growing popularity of email services such as Gmail, Yahoo, Hotmail and Rediff has left desi-email providers much behind as they still use the age old technology and methodology while lot of innovations are happening in the other parts of the globe. 

“With the advent of social media, and people adapting more to social platforms for conversations, email will either have to transform and become an enterprise service or close down,” said Mahendra Swarup, President, Indian Private Equity & Venture Capital Association and Chairman & Chief Mentor at Smile Interactive Technologies Group. Notably, Rediff has already launched an enterprise version of its email service.

However, Alok Kejriwal of Games2win was of the view that ‘closure’ is the only way out for Indian email providers.

The big three which include Microsoft’s Hotmail, Yahoomail and Gmail, together account for well over one billion users in the world. The shutting down of Indiatimes Email could be a wakeup call for Indian email service provider companies. Though many of the customers are shifting to international players, a large fraction of population is still using the Indian as their primary emails. To retain them, Indian players might well need to rehash their product strategies and device a better monetisation method through proper data mining.

With inputs from Satrajit Sen