According to a joint report released by Google, Temasek and Bain & Company, India’s internet economy is projected to reach $1 trillion by 2030 from $175 billion in 2022. By 2030, the internet economy’s contribution to India’s technology sector will grow to 62 per cent from 48 per cent in 2022. It will also account for 12-13 per cent of the country’s GDP, up from 4-5 per cent in 2022.
The report, titled ‘The e-Conomy of a Billion Connected Indians’, attributed the surge in internet economy to rising digital demand in tier 2+ cities, digitisation of traditional businesses, and the success of India Stack. It said that digital consumption is driving growth in key internet economy sectors, such as e-commerce, online travel, food delivery, and ride-hailing.
Commenting on the report, Sanjay Gupta, country head and vice president, Google India, said, “Three foundational forces – deepening consumer digital adoption, technology investments by businesses, and digital democratisation with the India Stack – has placed India at a turning point in its digital transformation. Structural shifts in consumption potential are opening up a vast opportunity for startups, large businesses and micro, small and medium enterprises (MSMEs) to power India’s internet economy towards a projected growth of 6x, reaching a trillion dollars by 2030. We are pleased to join Bain and Temasek in this first-of-its-kind multidimensional view of the digital landscape, and are confident and committed to partner India in this extraordinary opportunity.”
Meanwhile, Parijat Ghosh, managing partner, Bain and Company (India), said, “India’s internet economy has remarkable potential and is expected to grow at 6x over the next decade, with B2C e-commerce driving 40 per cent of the digital gross merchandise value (GMV), followed by B2B sectors and software-as-a-service (SaaS). The pace of digital disruption is expected to accelerate as traditional businesses and MSMEs increase investments in digitisation, in addition to startups continuing to play a strong role in driving the internet economy. We expect to see players go beyond their core to cater to the consumer of the future and adopt new business models to capitalise on the growing opportunity.”
Further, Vishesh Shrivastav, managing director, Investment (India), Temasek, said, “Widespread digital adoption among consumers, as well as businesses, is accelerating the growth of India’s internet economy at an unprecedented rate. Temasek has been a major participant in India’s internet economy, and is optimistic about India’s growth trajectory due to the country’s sound fundamentals. We expect trends in the consumer and digital space to provide a long runway for growth, and as a long term investor, we are committed to providing catalytic capital to spur the development of innovative solutions to create a more efficient, more sustainable and more inclusive society.”
As per the report, with approximately 700 million internet users in India transacting more via real-time digital payments and spending more time on online video streaming services and social media than global averages, the internet economy is set to expand beyond its current base. This growth will be founded on consumers seeing their household incomes double by 2030 from approximately $2,500 to $5,500 by 2030.
Presenting a 2030 outlook across 10 key consumer sectors, the report projects that B2C e-commerce will continue to maintain a leading share of digital services, growing 5-6x to about $350-380 billion by 2030. India’s online shoppers are expected to double by 2030, with currently over 60 per cent of new shoppers located in smaller towns, and increasingly attracted to the direct-to-customers (D2C) offerings and accessibility features of digital platforms.
