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Internet Users in India to be 730 Million by 2020: Nasscom-Akamai Report

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As per the report released by The National Association of Software & Services Companies (Nasscom) in partnership with Akamai Technologies Inc., India is expected to have 730 million users in next 4 years (2020). Out of these, it is expected that 75% of the new users will come from rural areas.

This could be possible because of various initiatives by several companies, individuals, and government. Recently, Tata & Google launched Internet Saathi for reducing the gender disparity in India.

The new report is launched by Mr. R. Chandrashekhar, president of Nasscom and DR Tom Leighton, CEO, Akamai Technologies.

The report, ‘The Future of Internet in India’, aims to understand ways in which the internet has impacted not only our work, shop, connection, learning but living as well. The report also focuses on the future trends that are going to change the picture of India by 2020.

India’s internet consumption has already exceeded the US to become No. 2 globally – R. Chandrashekhar, president, Nasscom

NasscomHe also stated that “Keeping into consideration the massive impact that the internet is creating across sectors, it has become the greatest disruptor of our age by changing the way we work, interact socially and live life in general. By 2020, the internet is expected to penetrate deeper in the hinterlands of the country, helping to create more opportunities for everyone.”

As per the reports, the internet user base in India is the second largest after China. The number of internet users across the globe is expected to reach 4,170 million by 2020.

This growth of the internet has impacted a lot of things. One of them is the creation of a strong ecosystem for new businesses. This has led to the creation of solutions to address the demands as well as growing markets.

Highlights of the report ‘The Future of Internet in India’

Discussed below are some of the key findings of the report which highlights how the internet has impacted fields of media, financial technology, hospitality, travel, and e-commerce.

1. Online shopping will edge out travel with 2/3rd of total e-commerce

As per the report, the Indian e-commerce market was valued at $17 billion in 2016, and by 2020, India will witness nearly 702 million smartphone users. Also, mobile phones will be preferred over other devices for shopping. This will account for almost 70% of total online shopping.

It is predicted that lifestyle and fashion field will emerge as the largest e-tailing category which will contribute 35% to e-commerce gross merchandise value (GMV) over the next 4 years. This means fashion and lifestyle will overtake the consumer electronics segment which is dominating the e-commerce industry of India at the moment.

Interestingly, e-tailing has grown 93% year-on-year, with the top three e-tailing giants (Amazon, Snapdeal, and Flipkart) with more than 80% of the segment last year. It is predicted that by 2020, e-commerce is likely to double to $34 billion which will be mainly driven by the online retail space.

2. By 2020, 50% of travel transactions to be online

The travel across India for holidays, shopping, leisure, and social visits is all set to grow with more people booking online and taking the advantage of competitive pricing offered by various online travel companies. There is an increasing amount of user-generated content online in the form of reviews on websites, their views on social media and more which is driving the growth of travel industry.

According to the India Brand Equity Foundation (IBEF), it is expected that the Indian travel market will touch $40 billion by 2020, and online travel will account for 40-50% of the all travel-related transactions. This is a huge jump! In 2015, the online travel transactions amounted to 12%. As a larger and younger chunk of the Indian population is coming online, the growth in the online travel industry is bound to increase.G-pg1(internet-india)web

As per KPMG, there are various industries that are playing a crucial role in shaping the tourism market of India like marketing initiatives, disposable income levels, the growing economy, diverse product offerings, government initiatives, and several key trends (customised tour packages, introduction of innovative tourism concepts, weekend holidays, multiple short trips, and increasing number of women and senior citizen travelers).

3. OTT: New ways of entertainment

Undoubtedly, OTT (over-the-top) has emerged to be one of the prime mediums of personal entertainment. OTT is the delivery of entertainment that includes movies and TV programs through the internet without the need of satellite TV or a cable.

Since the connectivity is improving and the prices of the data plans are falling, choosing OTT as a medium for entertainment is rapidly increasing for both future and existing smartphone users. This is going to merge the worlds of television as well as digital media once the providers know the nerve of the audience and know how to deliver it to them in the best possible ways. This means the content providers need to find a solution to delivering the subscriptions, transactions, or free but ad-supported, platforms.

As per the report by Media Partner Asia (MPA), in 2014, India had 12 million active OTT video subscribers. This number is steadily growing as the number of as large media houses has launched several personal apps.

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Also, VOIP-based OTT companies like Snapchat, Viber, and WhatsApp is deeply intertwined with social media and are changing the revenue structure in telecom. The January 2015 reports of TRAI showed that SMS traffic in India fell to 4,367 million in June 2014 from 5,346 million in June 2013. This decline of 18.3% shows the impact of VOIP-based OTT players.

WhatsApp is at the top in the messaging application market with 52% of all users using OTT messaging services in India. This shows that the messaging platforms are turning into content portals and could be leveraged for promotion and drawing viewers.

4. Financial technology: The way India pays online

As per the reports, financial technology is creating problems for financial services in Indian markets. The financial technology (fintech) software market was valued at $1.2 billion which accounts for 13-15% of the total. The remaining 87% focus on services like core banking and payment services.

The report points out the expected growth of financial technology market in India which is expected to grow 1.7 times by 2020. The growth of e-wallets and mobile banking will be high. However, cash-on-delivery will still be preferred by newer users.

What are your views on the increasing internet user base in India? 

Image credits: livemint.com, cloudfront.net

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