Digitization: India’s internet economy is eyeing for an extraordinary growth, with projections indicating a staggering valuation of $1 trillion by 2030, a significant surge from its estimated worth of $175 billion in 2022. This exponential rise will result in a substantial increase in the internet economy’s contribution to India’s GDP, expected to reach around 12 to 15 percent compared to the current 4 to 5 percent. The “e-Conomy India 2023” report, a collaborative effort between Google, Temasek, and Bain & Company, sheds light on the evolving business landscape and changing consumer behavior that are driving this momentous growth.
Projected Valuation of $1 Trillion by 2030 Signals Massive Surge
According to the report, the Internet economy’s role in India’s GDP is set to undergo a substantial transformation, with its contribution projected to surge from the current 4-5 percent to nearly 12-13 percent by 2030. This significant growth is accompanied by a notable expansion in the technology sector, as the share of the internet economy within it is expected to increase from 48 percent to 62 percent during the same period. These findings highlight the profound impact and increasing dominance of the internet economy on India’s economic landscape.
India’s Growing Dependence on Digital Payments and Services
The report emphasizes India’s growing dependence on real-time digital payments, online video streaming services, and social media platforms, surpassing global averages, as the country boasts around 700 million internet users. This trend is expected to drive the projected expansion of the Internet economy. Additionally, the anticipated growth will be supported by a significant increase in household incomes, with a doubling expected by 2030, rising from approximately $2,500 to $5,500. These factors contribute to the optimistic outlook for India’s Internet economy and its potential for substantial development in the coming years. The report highlights that consumers in tier 2 and above cities in India display a higher willingness to explore new brands and are willing to pay premium prices for personalized and customized products and services. Moreover, a significant 84 percent of consumers in these cities prefer e-consultations with reputable doctors, surpassing the national average of 75 percent who rely on recommendations from friends or family for in-person appointments.
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Promising Prospects for Digital Services and Technology-Driven Industries in India
In terms of key consumer sectors, Business-to-Consumer (B2C) e-commerce is projected to maintain its dominant position in digital services. It is expected to grow five to six times its current value and reach approximately $350-380 billion by 2030. HealthTech and InsurTech, currently valued at or below $2 billion, are predicted to witness the most substantial expansion, increasing by 9-15 times their current value. These findings shed light on the evolving consumer preferences and the significant growth potential in various sectors, indicating the promising prospects for digital services and technology-driven industries in India’s economic landscape.
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