India’s Internet Economy Will Cross $1 Trillion By This Year: Redseer Report
According to a recent report by Redseer, a consulting firm, India’s internet economy is poised to reach a staggering $1 trillion by 2030 which is a 50 % yoy surge.
Anil Kumar, CEO and Founder of RedSeer said that the journey of India to a $1-trillion consumer internet economy is due to the confluence of multitude of internet sectors such as e-tailing, e-health, food tech, online mobility, and quick commerce. This has created a strong foundation for a consumption-led growth engine. Many multiple internet sectors have shown strong momentum post-COVID which has expedited the journey from digital-first to digital-forward.
With more than $40 billion of funding, in 2021 42 new unicorns were born. This is a reflection of the investor confidence in India’s golden opportunity. The economy of country in increasingly becoming more and more skill-based and services-oriented which in turn is creating skilled workforce which in turn pulls the investors.
The Increased Digital Consumer Base and Its Categorization
With varying social needs, India is a home to an extremely distinct, heterogeneous population base characterized by burgeoning internet penetration rates, access to high-speed internet, and rising demand for online shopping and digital content consumption. In the report, this digital consumer base has been classified into three major categories.
The first in the list is a metropolitan diaspora of around 80-100 million individuals, with an income of of $12,000, who expect high-quality services.
With an annual income of $5,000-12,000, second in the line is a relatively budget-conscious, aspirational cohort of 100-200 million.
Spread across the rural and tier-2 segment, is a population of 400-500 million which draws an annual income of less than $5,000 which is the third category. This group, according to the report, is the one that requires the most digital intervention or in the terms stated in report, “deep vertical problem-solving”.
The third cohort is increasingly joining the digital mainstream due to the increasing vernacularity of language, verticalised super apps, and an omnichannel approach.
India’s new digital revolution is further enabled by the growing tech adoption in the B2B (business to business) space and an expanding and maturing internet consumer base. Also, the companies which saw a downward spiral during COVID, such as e-tail, eHealth, FoodTech, Online Mobility, and Billpay and Recharge saw a much stronger re-emerge.
Increased Tech Adoption, Government Initiatives & Local Investors Bolster India’s New Digital Revolution
India’s new digital revolution is bolstered by the rise of tech adoption in the B2B space. With a CAGR of 18 percent, the SaaS market size which was at $3.5 billion in FY21, is expected to touch $8 billion by FY26. This reflects the immense optimism about India’s growth.
Also, the development of a nimble, reliable, democratised and affordable logistic backbone than the previous deep pocketed and complex supply chain is the cherry on the cake.
“With over 70 tech IPOs in pipeline by 2025, the surge driven by digitisation, government initiatives for start-ups, increasing local investors with high equity, and private equity funding in tech companies and the current hopeful tech landscape where tech firms are inching towards profit or are already profitable, with a $150-200 million profit by India internet in FY21,” it mentioned.
However, the lukewarm response to major IPOs such as Paytm, Nykaa and Zomato marred the same.