Encouraging signs are emerging in the Indian internet scene, with the number of internet users in the country crossing 355 million in 2016, up 28% from the previous year’s figure of 277 million users. The Internet Trends 2017 report by Mary Meeker of US VC fund Kleiner Perkins Caufield & Byers, seen as the gold standard in this space, has stated that the country’s internet penetration also grew by 5% to 27% in 2016.
According to the latest data, India’s internet user base has zoomed from 198 million in 2014 to 355 million currently, making it the second largest country of internet users after China. In comparison, the global internet user base stood at 3.4 billion, recording a flat growth of 10%, showing how India has surged ahead in a short span of time. The Mary Meeker report has attributed the growth in India’s internet usage to the broader availability of low-cost data access. The report stated that 80% of the internet usage was being carried out through mobile phones. In 2014, the internet penetration was at 15%, growing to 22% in 2015. The report said onboarding of the next 200 million users will depend on the price decline of smartphones and data access.
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On the impact of the rising internet population in India on the e-commerce sector, the report stated that it is driving free cash flow for many internet companies but the business remained challenging due to fierce competition. It makes a mention of Amazon India, whose inventory and seller base grew 3x at the end of the third quarter of 2016, while fulfilment centres grew by 30%, revealing their aggressive growth plans in the country. The Meeker report states that leading wallet company Paytm’s user base has touched 215 million at the end of the first quarter of 2017, compared with 180 million at the end of the fourth quarter of 2016.