A fast-changing consumer landscape and strong investor confidence are set to catapult India’s internet economy from approximately $155-175 billion in 2022 to a trillion dollars by 2030, as per a report.
The contribution of the internet economy to India’s GDP is projected to increase from 4-5% presently to 12-13% by 2030, according to a report titled ‘The e-Conomy of a Billion Indians,’ jointly prepared by Google, Temasek, and Bain & Company.
“Structural shifts in consumption potential are opening up a vast opportunity for startups, large businesses, and MSMEs to power India’s internet economy to a projected growth of 6X,” said Sanjay Gupta, Country Head and Vice President at Google India
The key drivers of the growth in India’s internet economy, as identified by the report, are going to be: ecommerce, online travel, food delivery, and ride-hailing services, with B2C commerce accounting for 40% of the gross merchandise value.
In the last year alone, 220 million individuals shopped online while 110 million people made purchases in online games.
“We believe that digital media is going to be a key sector in the coming years and expect gaming is going to be a key part of it,” Parijat Ghosh, Managing Partner, Bain & Company told YourStory.
Three in five investors expect deal activities to rise in India over the next 2-3 years, the report noted. The SaaS (software-as-a-service) sector is likely to attract the most buzz as 77% of the investors surveyed ranked it among the top three sectors for investment interest, owing to the global reputation of India’s talent pool and the potential for growth in newer niche verticals.
In the past few years, Tier II+ consumers—who comprise 60% of new shoppers—indicated a greater openness to experimenting with new brands and products, and increased spending towards personalisation and premiumisation, especially for healthtech and edtech sectors, the report stated.
Healthtech and insurtech sectors are set to exhibit the strongest growth—to the tune of 9-15X growth—while SaaS will sustain the momentum of India’s digital exports.
The joint report was based on surveys of 7,200 consumers and investors across 23 urban centres, as well as analyses by Bain & Company.