The Rise of Ecommerce in India Part 2: Increased Internet Penetration and Smartphone Usage | EMQQ
In this four-part
series, we discuss factors that we believe have the potential to propel growth
in the Indian Ecommerce sector as well as ways that investors may gain
In this article, we
discuss the scale and rate of the increasing internet access among the
population of India and its potential implications of an increasingly digitised
- Macro conditions
- Internet/Smartphone Landscape
- Government Support
- Companies Best Positioned
For most of the people of the world, the first internet access will come in the
form of a smartphone. This is especially the case in India as approximately 65%
of the population still doesn’t own a smartphone or for perspective, close to
twice the population of the U.S. However, the catch up is happening at an
incredible rate with over 147 million people in India getting their first
smartphone in 2019 online via the likes of a low-cost Xiaomi, Oppo, Realme or
Samsung phone according to IDC. Our projected rate of smartphone adoption
stands at approximately 4,000 freshly minted smartphone users in India every
hour, representing a significantly growing user base for companies to capture .
Large Number of Internet Users
In April 2019, India had 560 million internet users – second only to China’s
802 million. However, with a population near 1.4 billion, only 40%
of India’s population currently accesses the internet. That compares
to 89% for the U.S. and over 90% for other developed countries .
by the World’s Cheapest Data Costs
At $0.26 per 1 gigabyte (GB) as of March 2019, India has the lowest data costs
in the world, according to Statista. This compares to $9.89 in China, where
Ecommerce is firmly entrenched, and $12.37 in the United States. Driven by the
lowest cost, it also is the largest consumer of data globally .
Driving the Highest Smartphone Usage Globally
As a result, India has the highest average usage per
smartphone globally, according to an Ericsson Mobility Report. The
report noted that smartphone users in India used 9.8 GB of data monthly,
substantially surpassing the 7.3 GB of China, the country with the second-largest
data usage. The report went on to estimate that total mobile data
traffic per month in India is expected to increase at a compound annual growth
rate (CAGR) of 23% from 4.6 exabytes (EB) in 2018 to 16 EB by 2024.
India has quickly
become one of the largest populations of internet and smartphone users in the
world. Yet, the number of users is low relative to the country’s
total population, highlighting the scalability and potential future growth for
Ecommerce in the country.
Date: 20th February 2020.