India's way to $1 trillion digital economy

Digital is fast engulfing our lives. Users are consuming more of it, using an average of 4 GB of data a month on everything from entertainment to shopping.

New users, all on smartphones, start using mobile internet with free services like email and regional language content, and “within weeks leapfrog to ecommerce and digital payments,” says Subho Ray, president, Internet & Mobile Association of India. Arpan Sheth, partner & head of Asia-Pacific for digital practice, Bain & Company, says there will be 600 million Indians with smartphones in five to seven years, each consuming content and transacting digitally.

“That creates immense opportunities across the lives of those individuals and impacts nearly all industries they interact with, including financial services, retail, media, travel & hospitality and healthcare.”

Rajan Anandan, vice-president-South East Asia & India, Google, says, “In the next five years, India is really going to be a continuous story about user growth. And as India’s internet user base matures, there will be a significant impact on every vertical.” Poor bandwidth & technology could eclipse this the growth. A snapshot of the digital economy that is expected to balloon.

All-round Growth
*500 millionn users will consume online videos by 2020

*Fourth largest category will be online news, reaching 280 million users by 2020 from 106 million users today

* 50% of internet users will pay digitally by 2020

Challenges to Digital Economy Growth
*Slow roll-out of Wi-Fi hotspots

*Most small & medium enterprises still not online & slow to adopt technology

*Entry-level smartphones have limited capabilities to allow smooth internet access

*Not enough skilled manpower in digital technologies

*Lack of user education

(Data sources: Ministry of Electronics & IT, IAMAI, Google-BCG report, FICCI-EY report)