GoDaddy to step into tier-II cities for its next million users

Venkatesh Ganesh | | Updated on: Apr 11, 2018

After bagging one million users in India, cloud computing provider GoDaddy plans to go into tier II and smaller cities for the next million users.

The US-based company said that it took five years to get a million customers to use its products such as website creation, hosting, domain name registration and e-mail.

“While we do not give a future looking statement, we are confident that the next million users from India will be faster,” said Nikhil Arora, VP and MD, India, GoDaddy.

The company has a global partnership with Amazon Web Services, which it will leverage in the Indian market too. However, the details are still being worked out. GoDaddy offers services in four languages — Hindi, Tamil, English and Marathi.

GoDaddy is hoping to ride on the rising internet wave, due to a combination of smartphone penetration and affordable data services, which has got 462 million users online, the second largest after China.

As a result, many first-time businesses on the internet are coming from smaller towns. According to industry watchers, only 20 per cent of the 51 million small and medium businesses (SMBs) in the country are online.

By 2022, 30 per cent of these businesses will be online and nine out of 10 users will use non-English services, according to Arora.

GoDaddy believes that its investments and on the ground interactions with customers have helped it to clock a million customers in a market that is dominated by many unorganised players and cut-throat competition. It is in this backdrop that it is betting on smaller towns to drive its growth.

“We have taken a reseller approach in smaller towns and have given them a white-label like service in the languages mentioned above, which will be certified by us to ensure quality. This a reseller can go and sell to a small business,” said Arora.

Price conscious

While that may sound good in theory, on the ground things are different.

“The average revenue per user is not significant in this business, the margins are thin and keep in mind that the Indian customer is very price conscious,” said Sanchit Vir Gogia, Founder, Greyhound Research.

Cost of servicing a customer can often be higher than the actual business it gets, which puts a question mark around business viability over time.

According to reports, around 70 per cent of SMBs in India are based in tier II cities selling everything from automotive components to solar panel makers.

Published on April 11, 2018

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