Chennai: India’s 500 Mn internet users have the potential to unlock more than $50 billion worth of transactions in online commerce in the country, said a joint study headed by Google
According to the report that saw contributions from Bain & Company and the Omidyar Network, it would take anywhere between three to five years to reach this target as there are many challenges that need to be overcome, not just in bringing more people online but also in converting online users into transacting users.
The report, entitled Unlocking Digital for Bharat: $50 Billion Opportunity, has highlighted 12 Indian startups that are already taking up initiatives to tap into this growth potential in the near future, much ahead of its global counterparts and fighting existing hurdles. Some of them are HotStar, BYJUs, BookMyShow, Ninjacart and Zoho.
One major challenge in unlocking this $50 Bn worth potential in online commerce is the decrease in consumer willingness/ability to spend online in the medium term due to low GDP per capita, the report said.
“This will force businesses to find frugal and innovative ways to sustain and wait longer for scale; at the same time, businesses should consider alternate monetisation approaches beyond consumers,” it added.
Apart from this, the large variation in Internet access across demographics in India is also a cause of concern, it stated.
The basis on that was given on the backing that there is a 55 per cent Internet penetration in urban areas versus just 15 per cent in rural areas. Further, 33 per cent males access the Internet, versus just 22 per cent of women it stated.
The report said it takes three to four months for a typical Internet user to make the first online transaction. However, a large number of users 54 million stopped after the first online purchase due to issues with the user experience.
The report mentions a number of global startups and companies that have played a crucial role in bringing the countries all over the world online.
For instance, in China, companies such as Alibaba, Tencent, Baidu, TrustPass, Kudo, Hema Supermarkets, and DaDaABC, among others, are leading the charts.
India has the second-highest number of active Internet users 390 million globally.
The number holds a great amount of untapped potential for online businesses.
|Penetration & growth|
|* Compared with China and Brazil, India lags behind in Internet penetration.
* It has 28 per cent compared with 64 per cent in Brazil and 53 per cent in China.
* On a positive note Indias user growth has been the highest in the world, with more than 40 million new users added on average every year since 2013.