India has the world’s second-largest internet user base, but Indians are hardly making use of the web.
Only 10% of the over 500 million Indians with access to the internet are savvy enough to use online services like retail, travel-booking, and food-ordering, among others, Bengaluru-based RedSeer Consulting said in a report.
RedSeer’s report is based on surveys of experts from industries like social media, mobile wallets, and food tech; interviews of over 10,000 internet users, and other research.
Nearly half the internet users have social media accounts. “A lot of credit goes to (Reliance) Jio and the JioPhone…even if I have a feature phone, I can get to WhatsApp,” said Vaibhav Arora, a consultant at RedSeer, referring to the advent of cheaper data and affordable internet-enabled phones.
“(Social media) is the step people first get involved with since it’s more of a habitual thing,” Arora added. “The difference between stage one and two is slight, but there is a section of people on Facebook and WhatsApp that doesn’t use e-mails.”
Language is a key barrier for Indians in adopting more online services. The 234 million Indian-language internet users already far exceed the 175 million English-language users in the country. And nearly 70% of Indians consider local language digital content more reliable than English content. But there’s a large information gap since Indian language content comprises less than 0.01% of the internet today.
Meanwhile, banking transactions are low as nearly one in five Indians are still unbanked, and those who do have accounts are wary of online fraud.
Still, the internet economy in India is expected to exceed $215 billion by 2020, up from over $100 billion in 2017, led by growth in financial services and e-commerce.
While the user base across stages will grow as the number of internet users is estimated to touch almost 830 million by 2021, consumer internet will pick up the slowest as it is also about making purchase decisions, Arora said.
Millennials who’ve grown up with the internet are picking up the pace, but the older generation remains apprehensive. “For example, when my mother wants to order (something online), she worries she might order something wrong. She doesn’t know if she has put the right address, and so on,” said Arora. But “now, she’s started using social media, she does Google things, and she uses Paytm.”