India’s internet economy is expected to double to touch $250 billion by 2020. E-commerce and financial services are projected to lead this growth with share of digital payment transactions to become more than double to go up to 30–40% by 2020.
India’s internet economy is expected to double to touch $250 billion by 2020. E-commerce and financial services are projected to lead this growth with share of digital payment transactions to become more than double to go up to 30–40% by 2020. While digital economy will have a much broader influence beyond the direct economic impact, digital adoption will deliver several citizen-centric social benefits like enhancing ease of doing business, improving access to services and products and transforming governance, according to a study conducted by the Boston Consulting Group (BCG) along with The Indus Entrepreneurs (TIE), both global consultancy firms.
With 391 million users, India has already become the second highest country in terms of mobile internet users. This is expected to grow rapidly to 650 million mobile internet users by 2020. At the same time, data consumption by 2020 could potentially increase 10-14 times. The report titled ‘The $250 Billion Digital Volcano: Dormant No More’ describes that indicators such as high speed mobile internet adoption is set to reach 550 million, almost 85% of the total mobile internet users by 2020. Average data consumption is projected to reach 7-10 GB per user per month, which will lead to the country’s internet economic growth from $ 125 billion to $250 billion by this period. This will be growing from the present 5% to 7.5% of the country’s GDP.
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The report reveals that while so far mobile internet users have proliferated and smartphone users have gone up by 4 times, high speed internet users have still been limited only to 56%. Thus, average data consumption per user continues to be low, standing at less than 1 GB data per month vis-a-vis developing economies like Indonesia and Brazil at 2–3 GB/month and developed economies like Japan and US at 9–11 GB/month. However, this situation is about to change.
“The three forces that are now synergizing to unlock internet consumption in India are the growth of 4G enabled devices to 550 million, which will be a six times growth constituting 70% devices in use, use of reliable and affordable high speed data, whose rates have already reduced to less than one-third in just 4–5 month and proliferation of improved digital content driving higher consumption,” Nimisha Jain, a BCG partner said. .
Increased high speed internet adoption is expected to increase time spent online to almost 3-4 times. Moreover, the amount of video consumed online is on the rise especially driven by online media and entertainment. As internet access is no more a constraint, consumers will become more quality conscious, resulting in an increase in the average video resolution. Driven by these changes in online consumption, average data consumption per user is set to increase by 10-14 times by 2020, the report says.
However, with the paradigm shift adapting to change will become critical. The impact on jobs is expected to be transformational. Existing roles will undergo transformation as low-value adding tasks get automated. New ways of working are expected to emerge with an increasingly flexible workforce optimizing for efficiency. At the same time, genesis of new technology-led business models will give impetus to entrepreneurial activity and create new opportunities, Geetika Dayal, executive director, TIE said.