ApiAp - Business Support

Logged out: Cyber cafes aren't too hot

web-admin — Tue, 31 Oct 2006 00:00:00 -0800

RITWIK DONDE

TIMES NEWS NETWORK[ TUESDAY, OCTOBER 31, 2006 12:00:32 AM]

MUMBAI: When cyber cafés began mushrooming across Indian cities they were considered a window to the world, a source of knowledge and information. Parents and teachers were a happy lot, expecting the youth to make full use of the new technology.

But, having coming under constant security scanner and being touted as shady joints promoting vices, the industry seems to be in the doldrums, with a majority of small players exiting the business.

There are about 200,000 cyber cafés in the country with more than 80% owned by individuals. Say café owners in the city, “It is getting difficult to conduct business with impending cyber café regulations and escalating operating costs. An average private cyber café gets about 50-60 footfalls in a day while the likes of Reliance Web World have 125 footfalls per day per store.”

Says Dilip Chaitalia, a café owner in South Mumbai, “Our footfalls have gone down by nearly 50%, with overall business decreasing by as much as 25%.” Also the cost of technology is rising with the advent of faster printers, webcams and regular software upgrades, he adds.

Café owners say business has been hit mainly by the impending regulations to police the cafes. “Our net earnings are even lower than a salaried job for the same skill set,” says Neelkanth Shanbaug, owner, Grafiti Cyber Café in Mumbai.

Where we used to earn Rs 100 an hour a few years ago, the rate has gone down to Rs 10-15 an hour along with the usage time. And now with regulations stating there would be a need to maintain an electronic log book of customers and monitor activity in the café, our costs would increase even more driving down margins, he adds.

Asserts Sarup Chowdhary, Director & CEO, Reliance World, “The compliance with the new rules and regulations would ensure a secure access but one that comes at a cost.” To put into effect rules like customer identification and constant monitoring of the premises, would mean an addition to the operating expenditure for all the players.

While the bigger cafes would be better off with this back-end addition it would be damaging to the smaller individual players, he adds. Reliance World which has as many as 25 outlets in the city offering internet access has not seen any physical growth in this number since its inception. An increasing number of smaller players are putting their hands up and saying they cannot afford to pump in the excess capital needed for the business.

Experts say that the biggies like Reliance can afford to play the volume games they can house as many 5,000 PCs in their cafes, the small guys can do with only 5-6 PCs. The downtrend in the industry may also be a reason why Reliance World now offers value-added services like video conferencing, video resumes and video mails to attract more users.

The fall in the use of cyber cafes is reflected in a recent survey by the Internet and Mobile Association of India (IAMAI) and IMRB International has revealed cyber cafe users have declined from 52% in ’03 to 39% in ’06. Increased home PC usage and higher broadband penetration is also affecting cyber cafe footfalls. However, not all industry players believe cybercafes are becoming less attractive.

According to a latest survey conducted by AC Nielsen, as many as 34% users now surf the internet from cybercafes, 30% from home, while internet users from offices have fallen to around 20%. Explaining the fall, Dr Subho Ray, President, IAMAI says that the rise in Web 2.0 applications like blogging and the growing e-commerce business have also contributed to an increasing number of users preferring the privacy of their homes over public access points.

Says Ashish Saboo, president, Association of Public ICT Tools Access Provider, less dependence on shared access and stricter regulations are making the case worse for the small entrepreneur in this industry. “The opportunities are huge and globally the e-commerce business is growing but the odds are stacked against us,” he adds.

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Survey on Mumbai Cyber Cafes - June 2005

admin — Fri, 09 Jun 2006 23:37:43 -0700

ApiAp conducted a sample survey on Cyber Cafes in Mumbai in June 2005. A random 40 cafes in Mumbai - South, Western Suburbs, & Central suburbs participated in the survey.

The primary data collection and survey was done by Mr Anshu Shukla & Shrish Kumar Tiwari , students of the Indian Institute of Information Technology ( IIIT) Allahabad, India.

Summary of the Survey:

The cyber café owners surveyed most of them offered Internet access, print & scan service.
77% of 40 respondents ’s cafe existence is less than 3 years 92.5% claimed they are some what satisfied with business.
80% of cafe own 6 to 10 terminals Most have invested less than Rs 200 thousand.
97% of cafes operate from rented premises.
Almost all access Internet through cable internet (ADSL connection or extended LAN networks using cat5 cables)
Median rate for Internet access fee is Rs 15/- per hour ( USD 0.34 ) Median traffic ranges from 34 - 40 visitors a day This converts into a probable Gross collection of just Rs 350 to 600 a day (USD 8-14)
Most cafes offer a significant discount to regular customers.
While 82% concurred to be their significant source of earning but at the same time 78% claimed other sources of earning too, popular options are PCO, DTP, Training etc.
55% claimed they know most of the customers, 30% claimed they know some of them & only 15% knew none of their customer.
When asked to rank the significant problems faced in operating the business: The number one problem was attributed to Business competition followed by Regulation problem, Hardware maintenance & last managing customers.
Only 43% & 39% of respondents knew the concept of Hacking & Piracy. 65% felt that their cafe can be misused but none could explain how.
95% of those surveyed claim to maintain a register of visitors for sake of business accounting, 15% even ask for proof of identity.
Conclusion: The Cyber café operations are not sustainable; most of the operators are early entrepreneurs. Although many claimed to be satisfied by the opportunity but then a significant 77% of the owners are in the business for less than 3 years, It is worthy to note the industry is over 8 years old. & The café business as hand in hand with the Internet rage had peeked in year 2000 with the burst of Dot COM bubble. Perhaps many have not factored the long-term capital cost recovery in the relative high operating cash flow thus look attractive. The low investment requirement added to low entry barrier & low skill base makes an ideal opportunity for micro entrepreneurs to start a venture. Subsequently Cyber café do not seem to be the main stay of the operator’s livelihood. Net earnings seem just about a bit higher than a salaried job for the same skill set. Most of the visitors frequent the same cafes & operators too are acquainted to them. Further for sake of business accounting most do maintain a rudimentary cross check systems. Thus detection of cyber crime under cover of anonymity offered by cyber café is not very non comprehendible But inferring from their responses on possibility of misuse of cafes, it seems most of them have a hazy understanding on Cyber security issues. It may be possible the café owners can be made gullible into abetting the crime. The whole scale policing of cyber café have proved an ineffective solution but a little support and nurturing of these micro entrepreneur community by way of awareness and recognition can certainly make cyber crime in the cover of anonymity manageable.

Thank you Anshu & Shirish & your other guides , Cyber Cafe operators owe you a lot ! We look forward more researchers like you & Anikar Haseloff take interest in this omni present yet anonymous participants in the ICT4D.

Cyber Cafe Revenue Planner

web-admin — Thu, 04 May 2006 00:00:00 -0700

If your an existing cyber cafe operator or plan to start one. Here is a simple revenue estimator. Click on the link for the worksheet: http://www.icoagh.com/icoagh_cyberguide.xls (MS-Excel 219 KB )
Courtesy: Internet Cafe Operators Association of Ghana

Cyber cafe boom to drive e-commerce craze in India

web-admin — Sat, 26 Nov 2005 00:00:00 -0800

Economic Times MUMBAI reports : Online commerce is projected to jump more than four times to about Rs 2,300 crore in ‘06-07 as a rapid growth in cyber cafes across the nation spur a craze for internet shopping.

Internet users did online business worth about Rs 570 crore in ‘04-05. The figure is expected to grow to Rs 2,300 crore by ‘06-07, according to a report titled ‘Online activities and e-commerce from cyber cafes’ conducted by the Internet and Mobile Association of India.

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