Inside India’s $1.6 Tn Consumer Internet Economy

The outbreak of the pandemic in 2020 fast-tracked digital adaptation in India as never before. The behavioral shift of consumers towards online buying and businesses pivoting around that shift by taking the D2C (direct-to-consumer) route led to immersive shopping experiences, virtual product launches and customer touch point amplification across the purchase funnel. Meanwhile, influencer marketing was fully leveraged for effective brand promotion. 

All these can be attributed to the growing number of internet users across the country. Currently, India is the second-largest internet market, and the number is expected to cross 1.3 Bn by 2030.

On average, India’s monthly mobile data consumption per user at 12 GB is the highest globally. Understandably, the spread of the mobile internet has played a significant role in the country’s digital progress. In 2021, India recorded the highest growth in mobile broadband data.

Again, there were two major reasons behind the influx. To begin with, the increased availability of cheap smartphones since 2010 created a favorable environment for digital growth. Next came Reliance Jio and its ultra-affordable data plans that brought internet access and usage within the easy reach of almost everyone.

The growth of digital infrastructure further paved the way for the rise of the consumer internet industry in India. The country is now home to more than 2,464 unique funded consumer internet startups. Also, a vast startup landscape is gradually emerging with significant contributions from various sectors such as ecommerce, fintech, edtech, healthtech, consumer services, media & entertainment, travel tech and transport tech.

Investors, too, are betting big consumer internet startups. The sector saw a 3.4x surge in funding in 2021 compared to the previous year.

With the growth of digital infrastructure, rise in the number of internet users, an increase in funding across the consumer internet space and growing digital adoption by consumers, the consumer internet opportunity in India is likely to cross $1.6 Tn by 2025.

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Among the sub-segments of the consumer internet sector, fintech leads the pack with a market size of $584 Bn, contributing around 70% of the total market opportunity. Given its growth trajectory, the fintech market size is expected to reach $1.1 Tn by 2025.

To know more about the market potential and current trends of the Indian consumer internet market, read our latest release – State Of Consumer Internet In India, InFocus: Online Gaming, Q1 2022 Report.

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