Directi owned BigRock is a domain registry and web hosting company in India. BigRock’s products include domain names, web hosting, VPS hosting, digital certificates, e-commerce hosting, among others. We spoke to Bhavin Turakhia, CEO of Directi about the business of BigRock. In his interaction with us, he speaks about the changes in the domain market since their launch, competition, monetisation, COD for domain names, Directi’s market share, BigRock’s overseas launch, among others. Following is an edited excerpt of the interview.
Medianama: What are the perception changes that you have seen in terms of buying domain since the time you launched in 1998 to now? What are some of the perceptions that you had to work on changing to penetrate the Indian market?
Turakhia: When we started the internet was starting to become a phenomenon but now, India is the third largest internet economy in the world, with 130 million user behind China and U.S. In the next 4 years, we will beat U.S and become the second largest internet economy. Within 4 years, that ratio will become 1 out of every 2 people with roughly, 40%-50% of the population would have access to the internet. If half the country is checking you on a mobile device or a tablet, you can’t suddenly ignore the internet.
The second trend that we are seeing is a change with people going and buying domain names by themselves and building a website, blog or shop. Consumers are not intimidated anymore. However, majority of them are still dependent on web application developers and web designers to set up a full web presence but the level of knowledge with which they come in now has increased.
Medianama: Who are you targeting with your services in India as opposed to U.S.A? What is the one thing that has surprised you about the Indian market versus the American market?
Turakhia: With BigRock, we are targeting India and its SMEs, entrepreneurs, businesses, professionals who we believe are part of the first wave of people in any country that set up a web presence. Going forth, it will include others. Some of our other businesses target the U.S. In the United States, for every 100 users there are about 32 to 35 websites which are owned or operated by a person in the U.S. In India, for every 100 users, the number of websites is roughly about 2.5 or 3 websites. In India, though the internet using population has grown, the number of websites have not grown at the same pace. India is now at about 15% or so. When the internet penetration hits 30-35%, the number of websites will start growing exponentially and become a double digit number.
Medianama: Why did you launch COD for purchasing domain names? How has it increased your market penetration among target audience without credit/debit cards?
Turakhia: In India, the debit card or credit card penetration is fairly low, about 20 million cards. Most of the people either prefer net banking, conventional banking or other modes of payment as opposed to card payments. Our cash on delivery model was intended to be more of a convenience to our customers and not specifically to acquire additional market share. Customers come to our website, select what they want to buy and if they don’t have a credit card, they select cash on delivery and our person will come to their door step and collect the cash and fulfill their service.
Medianama: What is the cost to the company for setting up a service just for convenience and not customer acquisition?
Turakhia: We are obviously acquiring customers by virtue of COD. In one sense, I would see that as an important customer acquisition play because we want to make it as easy for customers to buy and use our products. So the cash on delivery pieces one part of that because happier customers would result in more customers. With regard to the cost, I don’t have details to give about the cost that we incur but so far the exercise has not incurred any loss because the benefits outweigh the cost by a significant degree.
Medianama: What was the purpose of launching DesignXchange? What is the kind of need that you see for it with your customers?
Turakhia: We provide customers with web domain and hosting but we also wanted to close the loop by providing them with good leads of organisations who give them a good web presence. We don’t charge neither the customers nor the partners, web designers for this service.
Medianama: Why is BigRock not operating outside India when you have products already targeting other countries?
Turakhia: We have goals to set up operations in various countries but right now we are focusing on India because India is currently the country which has the maximum market potential. China and U.S have already crossed that growth curve. It makes sense to establish and set up a monopoly out here. We have a significant amount of market share out here in India and so setting all the elements around that, is far more important. The other markets have relatively higher degree of competition and maturity so the strategy would be different and we are working on that also.
Medianama: When you say you are setting up a monopoly here, how far would you say, you have gone with that?
Turakhia: Across Directi, we have about 70%-75% of market share in India. I don’t have the exact numbers but there are three of our businesses which provide domain names and websites – Resellersclub.com, Logicbox.com and BigRock.com. With these, every 100 websites set up in India, over 75 of them are set up and operated through us. So we are already in market monopoly position.
Ed note: Directi claims that it has 47% marketshare – 1,653,187 of 3,507,100 domains in India are powered by Directi.
Medianama: Which are the services of Bigrock that have maximum traction in terms of generating revenue for the company? Was VPS hosting launched as a constant revenue source from enterprises?
Turakhia: Our highest revenue still comes from domain names and hosting which target mass market and bring mass volume. We are not going to sell as many VPS as we sell domain names but the amount we make on VPS will be higher. As I see it, our revenue mix will always be about 60-70% from domain names and hosting and the remaining 30-40% will be a mix of everything else like VPS, e-commerce carts, digital certificates etc. We are also launching enterprise email with enterprise focused pricing.
Medianama: What is the strategy that you employ to retain customers? What is your customer retention rate? Is repurchase of domain names an important part of your monetisation strategy?
Turakhia: Firstly, our retention rate is upward of 85% because anybody who has kept the domain name for about two years or more, retains it. That reflects our customer retention strategy. When you domain name expires, you get about 30 days grace period to renew it.It is the registry then that keeps it in a limbo state before it puts it out to the public market. During this period, you have a process called the redemption process and it is more expensive, costing $40 or $60. It is not an additional margin that we are making during that period. It is a standard process for any domain and the extra fee goes to the registry.
Medianama: How does your affiliate program work? How many partners do you have and what is the percentage of revenue that it contributes?
Turakhia: I’m not sure about the percentage it contributes to the revenue but it is quite strong with more than 13,000 affiliates. 20-25% of them must be doing large volume. Remaining would be doing smaller volume here and there, every quarter. But the major part comes from the top affiliates. We have a large number of affiliates who keep adding to that pool. Apart from commission, all our affiliates have the opportunity to participate free of cost in the DesignXchange program.
Medianama: How has your approach to the market changed with the entry of competition especially international competition? How do you differentiate yourself from the rest now?
Turakhia: Competition is not something that I’m overly worried about or concerned about. Competition in the market will only end up helping everybody because the issue is that both of us need to educate larger number of customers to come online and set up their web presence etc. We also have been in the country for 12 years. International companies are going to have hard time in getting that home ground advantage.
Corrigendum: an earlier version of this interview incorrectly referred to resellersclub.com as resellers.com. The error is regretted.