Transforming India’s Economy: The Path to a $1 Trillion Digital Revolution by 2030
Based on a report by Google, Temasek, and Bain & Company, India’s internet economy would grow six-fold to a trillion dollars by 2030, with households doubling their income in the following seven years.
As per the estimate, the internet economy’s proportion of India’s GDP would rise from 4-5% to almost 12-13% by 2030, with 350 million digital payment users and 220 million online consumers driving the expansion.
The contribution of the ‘e-Conomy’ to India’s technology sector is predicted to climb to 62% in 2030 from 48% in 2022. In the paper titled ‘The e-Conomy of a Billion Connected Indians,’ India’s internet economy is “roaring” towards a trillion dollars from roughly $175 billion in consumption in 2022, owing to a sustained shift in consumer behavior and the growth of the business environment.
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Furthermore, the analysis, business-to-consumer (B2C) e-commerce will continue to dominate digital services, expanding five to six times to about $350-380 billion by 2030. India’s internet shoppers are predicted to more than treble by then.
What’s on the rise for a $1 trillion economy?
The Rise of Small Towns
The target population of 86% of India’s population lives in Tier 2+ cities. They seek to demonstrate a larger total addressable market (TAM) to raise larger sums from venture capitalists. According to predictions, rural India’s per capita income growth will outstrip that of urban India. It will increase by 4.3x between 2019 and 2030, while urban pockets will grow by 3.5x. And this could significantly improve spending habits in these places.
500 million of India’s 700 million internet users are non-English literate, according to the survey. These are folks who have most likely not experienced the full power of the digital world. Companies can leverage this opportunity to grab this market by providing service and content in regional languages.
Furthermore, data appears that consumers in smaller towns are more willing to try new brands and products. They aren’t stuck in their ways. Perhaps this is because the digital world is still fresh to them and they are happy to be experimenting. However, they prefer ‘Made in India’ things. This provides the chance for smaller brands to compete with large incumbents in unknown areas.
Adding to that, they may not even need to spend large sums of money on celebrity endorsements to reach this target group. Because people in Tier 2+ cities have far higher confidence in local influencers.
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India Opens the Door to SaaS
For a long time, when you said India and technology, everyone assumed you were referring to IT firms like Infosys or Wipro. But not any longer. Today, the words India and technology conjure up visions of new Software-as-a-Service (SaaS) enterprises. But what is SaaS?
If you wanted to boost workplace communication, you’d have to install a cumbersome piece of software on every computer in the office. It was inconvenient. But then the cloud appeared. You only required internet access to utilize the chat software without it taking up a lot of space on your PC. Simply put, SaaS stands for Software-as-a-Service. This is the case for more than 30% of the software market in the market today.
This tendency has benefited Canadian businesses. We have over 1,500 supported startups developing a wide range of SaaS products, from simple help desks to HR management programs that can manage recruitment and payroll processes to sales lead management systems.
We are selling this software all over the world. In reality, overseas customers now account for 75% of Indian SaaS companies’ revenues. We’ve gone from having just two SaaS unicorns (those worth more than $1 billion) in 2018 to having over 20 by 2022.
Indian Content Creators on the Rise
In India, there are now 7,000 YouTube channels with over one million subscribers. On the surface, that may not appear to be much. After all, the country has 80 million content creators. However, the numbers are fast increasing. In 2021, there were just 3,500 YouTube channels with 1 million subscribers. Not only is the pool now twice as huge, but we’re also the fastest-growing in the globe.
One reason for this is the ridiculously low data cost we enjoy. India spends $0.68 per gigabyte of data, compared to the global average of $4.21. So we’ve resorted to scrolling for hours on social media to get our dopamine fix.
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That means the influencer business is booming. Companies are utilizing influencers to advertise their products in unprecedented ways. In addition, the influencer market has already increased by more than 40% to $150 million by 2022. These influencer marketing expenditures are expected to reach a whopping $3 billion by 2030. Furthermore, it is estimated that 70% of the money will go to non-celebrity influencers. This has the potential to catapult India to the $1 trillion digital economy mark.
Conclusion
Three fundamental dynamics – increasing consumer digital usage, business technology expenditures, and digital democratization through the India Stack – have propelled India to a tipping point in its digital transformation. Structural shifts in consumer potential are creating a massive opportunity for start-ups, large corporations, and MSMEs to propel India’s internet economy to a six-fold increase.
