India holds one of the largest internet-friendly populations in the world, with rough estimates stating almost 800 million citizens are internet users. Studies show that an average Indian citizen spends 7+ hours on the internet every day.
While the internet industry in India has faced a few roadblocks through 2022, data collected by the leading intelligence firm Redsser Strategy Consultants predicts that by 2030 the industry’s valuation will touch the $5 trillion mark.
The study further states that the GMV of the Indian industry will stand at $1 trillion by the end of the decade, which will be equivalent to a market cap valuation (public and private) of $5 trillion. Multiple factors attest to this increase in valuation.
Why the Large Promise?
It’s not simply the fact that the Indian population is internet friendly; the geographical spread is also a major factor in this valuation. A huge segment of internet users are from tier 2 cities across the country, and this usage spans social media, video streaming, and more.
There has also been an unprecedented increase in internet usage from these tier 2 cities and even beyond. Stats show that Indian internet users are consuming a huge amount of user-generated content, unlike other countries where the primary consumption is platform-generated content. Vernacular language-based user-generated content is growing at a massive pace and gaining popularity.
These factors have also added growth to the internet advertising ecosystem in India, thereby fuelling the internet industry even further. Short video-based commerce is already sky-high in tier 2 cities, and this is yet to reach its peak.
So, the combination of digital advertising growth and a surge in internet users beyond tier-1 cities is the primary reason that the proposed valuation for the internet industry stands at $5 trillion for the end of the decade.
Covid as A Primary Driver
The Covid19 period also needs to be considered as a major proponent of this increment. From digital financial services to online shopping, every aspect of the modern internet was readily adopted by the Indian population due to the lockdown situation.
The current internet industry in India and its growth pattern owes much to this era and the change it brought about regarding digital literacy and penetration of the internet beyond tier 1 cities.
In the near future, as the Indian tech industry becomes more self-reliant, more internet-based products and activity will spread across the country, increasing the valuation even further.