India Reaches 400 Million Internet Users

Another 800 Million Mostly Mobile Connections to Go

India_Internet_lIndia’s a market of big numbers. Reaching mass scale is a standard part of most business models in the country of 1.3 billion.

Two weeks ago, the Internet and Mobile Association of India reported that the number of Internet users in the region is expected to top 400 million within the coming weeks. It was an accelerated connection progression that got the country to this point — it took a decade for Internet users to grow from 10 million to 100 million in India, but only five more years to add another 300 million. The country has gone from a few million Internet users in the year 2000 to the second-largest Web market after China, where there are about 675 million Internet users.

The recent swell of hundreds of millions of users is a direct result the availability of lower-priced smartphones and affordable data plans. Mobile device usage tends to supplement consumer access in most developed markets. But in India, 2G-, 3G- and now 4G-enabled smartphones and tablets are the most prevalent method of getting online. India is truly a mobile-first market.

In 2014, smartphone shipments in India stood at 83 million. In 2015, CCS Insight forecasts that 133 million smartphones will be shipped in India. These numbers are relatively small compared with China, but India is in the process of reaching similar penetration levels. There are more than half a billion people to connect in India, and almost all will first access the Internet via a mobile connection.

The growth of Internet users in India in the past two years is reflected in other sectors like e-commerce, social media, digital advertising and mobile payments. India’s Amazon competitors Flipkart and Snapdeal have recorded over 100 percent year-on-year growth rates in their gross merchandise value as well as in company valuations. Start-ups that few outside of India had heard of a year ago have suddenly attracted global investor attention. The momentum started by mobile connectivity has led to a surge in venture capital funding in the country.

Facebook and WhatsApp — with 136 million and about 75 million users in India respectively — are the most popular apps in the region., Facebook’s initiative to provide zero-rated Internet services in developing countries, is now available across much of India through the Free Basics app on Reliance Communications’ network, and will give tens of millions a taste for the Internet.

This is leading the one of the most robust mobile digital economies in the world. Taxi company Ola, mobile payment service Paytm, food delivery service Zomato and real estate site are examples of Indian-based start-ups successfully competing with Western competitors. However, profitability is separate subject, and one which such young companies will revisit as connectivity scale continues to expand.

Internet access and mobility in India go hand in hand. With only one in three individuals accessing the Web, the markets for hardware, connectivity and services have a long way to grow.

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