Indian consumers embracing digital

14 December 2011

NEW DELHI: Consumers in India are expected to embrace a wide range of digital activities by 2015, driving up ad revenues and ecommerce sales, according to a new report.

Avendus Capital, the wealth management firm, estimated there are now 80m web users in the country, alongside 10m third-generation mobile subscribers.

Looking forward, the organisation predicted that the online audience should reach 376m people in 2015, equivalent to a penetration of 29.5%, measured against 6.6% at present.

The firm's analysis also forecast that there would be 216m PCs in India by 2015, when the number of smartphones could top 450m.

More specifically, 200m people may solely go online via mobile in 2015, showing how vital it will become for marketers.

"Over the last six months, reports of internet and mobile start-ups have become a regular feature in all forms of media. Deal activity has been growing at a frantic pace," said Aashish Bhinde, executive director at Avendus Capital "There is excitement in the entrepreneur and investment community, and most importantly, among consumers."

Indian netizens typically spend 16.5 hours a month on the web, below the global average of 21 hours. This means the medium accounts for 1.7% of contemporary media usage, with TV on 74.3%.

Turning to advertising, the study projected that online revenues would stand at $415m by the close of 2011, an amount pegged to reach $1.6bn by 2015.

Currently, between eight and ten million people buy products on the web, but 38m should do so in 2015. By this date, the ecommerce sector, including travel, is set to be worth $24bn per year, versus $6.3bn today.

Within this, pure online retail sales are anticipated to hit $11.8bn by 2015, more than five times the figure likely to be generated through this channel in 2011.

However, despite the rise of digital media, the study suggested that TV will still take 71% of total media usage time by 2015, with the web posting 9%, as newspapers and radio lose out.

Data sourced from Avendus Capital; additional content by Warc staff