India’s online success story is rooted in its trusting internet users.
Over 72% of Indians trust the internet overall, according to the Global Survey on Internet Security & Trust 2017 conducted by the Center for International Government Innovation (CIGI) and market research firm Ipsos. By comparison, just over half of the world’s population said they trusted the internet.
A total of 24,225 internet users from 24 countries, where each country was represented by at least 1,000 individuals, responded during the three-month period from Dec. 23, 2016 to Mar. 21, 2017.
The faith in the web seemed to spill over into the country’s interest in mobile payments and e-commerce platforms.
On average, 57% of people from across the world said they would likely use mobile payments over the next year. In India, 86% of respondents said they were likely to make transactions with their phones, which was second only to Indonesia and on par with China.
Online shopping also picked up. Globally, 22% of internet users have never brought a good or service online. Among India’s netizens, just 4% say they never shop online. After China, Indian internet users are most likely to make more than five online purchases each month.
Frequent online shoppers from across the globe pointed to saving time, convenience and flexibility of product choice, delivery, and pricing, as their top reasons for browsing-and-buying on the internet. This holds especially true in India. ”We know India is a high-growth country and online is one of the reasons,” Sean Simpson, the vice president of public affairs at Ipsos Canada, told Quartz. “It’s likely that the online technology is developing faster than the brick infrastructure around them, and so it makes sense to make their purchases online.” He adds that online marketplaces also give people access to goods from outside their country.
For people buying at least one online product per month, the top choices for paying are credit cards, electronic payment platforms like Paypal, and debit cards.
Although the CIGI-Ipsos survey does not break down payment methods country-by-country, Indians likely don’t follow that pattern. Credit card and debit card penetration is low in the country. As of 2013, only about 400 million people out of a population of 1.3 billion had a bank account. Eighty percent of women don’t have a bank account. Consequently, Boston Consulting Group (BCG) labels cash-on-delivery a “necessary evil” in the country. A fifth of online purchases fail at checkout because of “customer abandonment, patchy networks and glitches in digital payment,” BCG notes.
Slowly but surely, consumer behavior is evolving. India’s financial technology industry, from payments platforms to apps that help you pay taxes, has been booming. By 2020, the industry is slated to reach $2.4 billion(pdf), up from $1.2 billion in 2016, according to India’s IT trade association, Nasscom.
It seems like the only possible threat to India’s growing affinity toward the internet is the country’s government. While three-quarters of Indian respondents ‘agree’ that their government will act responsibly online, “only 27% ‘strongly agree’ with that statement, so there is still a healthy skepticism there,” Simpson says.