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Spreading the Net, local solutions can open $50-billion e-comm potential in India: Report


Online commerce provides a $50-billion opportunity in India driven by the next wave of internet users, says a report while pointing out that one should address the challenge of skewed user base in rural areas and access to women users to unlock this potential.

The report ‘Unlocking Digital for Bharat: $50 Billion Opportunity’, released by Bain and Company, Google and Omidyar Network here, revealed that compared to its peers, only 22 per cent of India’s women have internet access; in China it is 52 per cent, in Brazil 64 per cent and in Indonesia, 53 per cent in Indonesia.

While 55 per cent of india’s population had access to internet, only 15 per cent in rural India is linked up. It is better in other countries — 29 per cent in China, 26 per cent in Brazil and 48 per cent in Indonesia.

Internet penetration

Internet penetration in India is 28 per cent despite being a country with the second-highest number of internet users and with a data usage on a par with developed markets such as the US and the UK.

The report reveals that of the 390 million internet users, 80 per cent are from affluent socio-economic segment and penetration amongst lower-income segments is only 13 per cent. This is reflected in the average online spending in India. According to the report, the average shopping spend stands at $224 per online buyer much less than China’s $1,862 and Brazil’s $374.

It is possible to tap the potential by creating awareness and usage among the current and the next set of internet users and shoppers. Of the users who have been on the internet for two or more years, 61 per cent transact online.

User experience

However, it also notes that a large number of users (54 million) stop after the first online purchase due to issues with user experience.

Building locally relevant solutions across contents can drive user-engagement, which will unlock 130 million new users and double Internet penetration in rural areas.

By ensuring deeper user engagement to influence 40 per cent of the country’s workforce across micro, small and medium enterprises will lead to diversifying and augmenting their income streams.

The report also suggests that through omni-channel presence, reinforcing product quality in brand messaging and assuaging concerns on product-returns, businesses can build trust through a superior pre- and post-sales experience.

Source: The Hindu