The Rise of Ecommerce in India Part 2: Increased Internet Penetration and Smartphone Usage | EMQQ

20 February 2020

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 exposure.

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 society.

  • Macro conditions
  • Internet/Smartphone Landscape
  • Government Support
  • Companies Best Positioned 


Increasingly Plugged In

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 [1]. 

A 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 [2]. 

Driven 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 [3].

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. 

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