That is according to a new forecast from the Boston Consulting Group (BCG) and Google India, which finds Indians currently spend about $40bn via digital transactions.
Their joint report, entitled Digital Consumer Spending in India: A $100 Billion Opportunity and summarised in a syndicated news release, suggests in effect that online spending in the country will grow 2.5 times over just two years.
It also estimates that the number of women shoppers will increase 2.5 times by 2020 at the same time as the number of shoppers aged over 35 grows by more than three times.
Digging into the detail, BCG and Google India calculate that e-commerce will grow from the current $18bn to $45bn by 2020, with other sectors also expected to register significant growth rates.
Online spending on travel and hotels, for example, is expected to rise from $11bn to $20bn, while financial services will see a huge increase from $12bn to $30bn. Digital media is also expected to more than double from $200m to $570m.
“Only one in five internet users in India shop for products online, one in six do travel bookings online and a negligible percentage pay for digital media. Even among those who transact online, only 20% spend a significant 60-65% of their total spends online,” the report said.
Looking ahead, the report added that value added services could be a key differentiator for occasional shoppers, who make up 75-80% of the total.
While for frequent shoppers, comprising 15-25%, it will be imperative to create unique propositions such as loyalty programmes and develop customised communications.
“Very different actions are needed to unlock growth and move consumers from one stage to the next,” said Nimisha Jain, Partner and Director at BCG India.
Sourced from Business Standard; additional content by WARC staff