BCG-TiE Report Prediction "India’s Internet Economy Expected To Double By 2020" - GADGETS & INNOVATIONS


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Sunday, April 9, 2017

BCG-TiE Report Prediction "India’s Internet Economy Expected To Double By 2020"

Press Release

India’s internet economy set to become USD 250 Billion by 2020 – 7.5% of the country’s GDP

With ~391 Mn users, Indiahas already become the second highest country in terms of mobile internet users. This is expected to grow rapidly to ~650 Mn mobile internet users by 2020. At the same time, data consumption by 2020 could potentially increase 10-14 times. The Boston Consulting Group (BCG), along with The Indus Entrepreneurs (TIE), today released a report titled 'The $250 Billion Digital Volcano: Dormant No More' that describes this phenomenal digital adoption in the country.

The impending digital salience can be seen from the following indicators:
  • High speed mobile internet adoption is set to reach ~550 Mn users by 2020, almost 85% of the total mobile internet users
  • Average data consumption is projected to reach ~7-10 GB per user per month by 2020
  • India's internet economy is expected to double from USD 125 Bn to USD 250 Bn, growing from the current ~5% to ~7.5% of the country's GDP

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 Japanand US at 9–11 GB/month. However, the situation is about to change.

Geetika Dayal, Executive Director, TiE Delhi-NCR said, “The report comes at a time, when the conversation has moved from ‘Internet of Things’ to ‘Internet of Everything’, and digitisation presents a great opportunity for multiple stakeholders.  Innovation is what leads to sustainability, and sustainable growth in the current entrepreneurship ecosystem will enable Indiato chart its own success story.”

"It is essential to understand the three forces that are now synergizing to unlock internet consumption in India," said Nimisha Jain, a BCG partner and report co-author. "Firstly, by 2020, 4G enabled devices are expected to grow 6 times to 550 Mn devices, constituting 70% devices in use. Secondly, reliable high speed data is becoming both ubiquitous as well as mass affordable (data rates have reduced to less than one-third in just 4–5 months). Lastly, digital content is proliferating as well as improving in quality, thus driving consumption."

Increased high speed internet adoption, the report says, is expected to increase time spent online by 2020 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 ceases to be 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.

India’s internet economy is expected to double to become USD 250 Bn by 2020. E-commerce and financial services are projected to lead this growth. For instance, share of digital payment transactions could more than double to go up to 30–40% by 2020. 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.

As the new digital paradigm emerges, adapting to change will become critical. For instance the impact on jobs is expected to be transformational. Increased automation will minimize manual and repetitive roles while roles in upcoming spaces become coveted, e.g. human-machine interaction. Existing roles will also 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.

About TiE India:

The Indus Entrepreneurs (TiE) is a global organization fostering entrepreneurship through mentoring, networking and education. Founded in 1992 in Silicon Valley, we currently have 61 chapters across 17 countries. Delhichapter is among the largest and most vibrant across the vast TiE network. TiE Delhi plays the role of an ecosystem builder by bringing in multiple stakeholders and values to align with the common goal to foster entrepreneurship. In the last 16 years, TiE Delhi has come a long way. We have 1,500 members including 250+ Charter Members, who are our strength and support.

About The Boston Consulting Group :

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries.

About IndiaInternet Day :

India Internet Day is a leadership conference that looks at setting conversations around a long term vision for the industry. The idea of India Internet Day is to look at paradigm shifts in the internet industry globally and what that means for the internet business in India. While based in India, the event seeks to have a strong global connect. The forum also explores the shape of things to come while connecting with the established players, outliers and experimenters - making the forum as a point of reference. In this our fifth year, #iDay2017 goes beyond the predefined boundaries and explore issues of far more relevance and impact.

2016 was a reboot year for entrepreneurs. As money dried and investors kind of withdrew, a sense of maturity set in. A maturity that brought with it knowledge that investors are looking at sustainable businesses and investments are hard earned. Growth and funding come to innovators who create sustainable differentiators and also adequate barriers to entry.

As the year progressed, rules of the road ahead seemed to have changed dramatically. What appeared to be providence for a few also holds opportunities therein for many others. As the demonetisation turns 6 months and GST is set to bloom, as unique sustainable models backed by innovative disruptors become the ask of the day, #iDay 2017 promises to go beyond prosaic and unravels the gamut of opportunities this new path presents. #iDay shakes the fatigue of 2016, clears the air around multiple unknowns to explore issues of far more relevance and impact for entrepreneurs looking building their businesses.

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