The introduction of augmented reality (AR) and virtual reality (VR) in consu­mer markets has opened up a whole new world of possibilities. As of 2021, the global AR and VR market was valued at $28.5 billion, and is expected to reach $200.1 billion by 2030.

The pioneering AR/VR market has shown immense growth in India as well. India’s AR/VR market is expected to adv­a­n­ce at a compound annual growth rate of 38.29 per cent, to reach $14.07 billion by 2027. This will be driven by increasing smartphone penetration and widespread in­ternet connectivity. This exponential gr­owth can also be credited to the integration of AR/VR into different sectors such as entertainment, education, tourism, gaming, retail and healthcare.

Applications of AR/VR

The enterprise segment accounted for 72 per cent of the AR/VR market in 2020. Some of the best applications were noticed in the following sectors.

Education

In education, AR/VR technologies have opened up new doors for students and tea­ch­ers to create a more immersive and technological environment. This has help­ed in making complicated and layered concepts easier to assimilate through the audio-visual format. The Central Board of Secon­dary Ed­u­cation, in collaboration with Meta, so­ught to teach 1 million teachers and more than 10 million students via AR/VR. Meta even provided a curriculum on Digital Sa­fety, online well-being, VR and AR.

Healthcare

The healthcare sector in India has also seen major advancements in terms of AR/ VR usage. Clinics and hospitals in the co­untry are using virtual simulation technology to check on and treat patients. This may include therapy, cognitive rehabilitation (doctors observing patients performing complex real-world tasks after diagnosis), physical rehabilitation and pain management. Treatments that require patients to “experience” something have become much easier. This has furthermore led to improved surgical methods. VR-made 3D models are used by surgeons to plan operations in advance, boosting accuracy and reducing associated risks. This re­duc­tion of human error can also be seen in regular medical treatment methods. More and more hospitals have started using me­dical simulation procedures, which are artificial representations in virtual environments, depicting real-time situations for healthcare practitioners to get accustomed to.

Gaming

Based on research presented by World­wide Information, 80 per cent of the in­come in the AR/VR space is contributed by gaming. With the largest youth population in the planet, India is on its way to becoming the world’s primary gaming hub. An Australian start-up, ZeroLatency, has opened one of India’s biggest VR gaming centres, where players are allowed to roam around in a large, open space to interact freely with in-game elements and get engrossed in the gameplay. The Asia-Pacific region accounts for a huge chunk of the VR gaming market with a contribution of over 40 per cent to the worldwide income. 5G-empowered cell phones will additionally make AR/VR more accessible for pe­o­ple across the country and ensure a superior cloud gaming experience. Bala­Aatral Solutions, an Indian gaming start-up, has received a funding of Rs 30 milli­on, while the AR company Kirkey has star­ted working on a game called Yatra, in as­sociation with Reliance Jio.

Retail

AR/VR technologies have also introduced in­novation in retail marketing. AR lets shoppers see the real world with im­posed digital elements, while VR shopping transports them to an entirely virtual setting. For example, shops with AR technology can let you interact with items without actually trying them on in the real world. Shopify saw an increase of 94 per cent in their conversions after the implementation of AR in their stores. MOSCOT experienced a 174 per cent in­crease in its overall revenue, after adding the virtual try-on function to their website. Even Indian co­mpanies such as Lenskart, Tanishq, Café Tresor and Rent It Bae have actively im­plemented AR/VR technologies in their re­tail spaces. Lens­kart is broadening its horizons by adding AR and VR to their existing user interfaces. Flipkart launched Flipkart Labs to enhance its user experience with the use of AR technologies.

Rise of start-ups

India is pioneering in the AR/VR market with more than 260 start-ups in this segment. The roll-out of 5G technology, Wi-Fi 6 and other technologies such as big da­ta analytics and artificial intelligence (AI) are fuelling demand for AR and VR in the country. In order to capitalise on this op­portunity and cover the increasing de­ma­nd, many start-ups have been laun­ched in India.

On April 2022, the government inaugurated the Pradhan Mantri Sangrahalay in New Delhi. The Indian start-up Tag­bin, al­ong with a few other partners, digitalised the entire museum at an estimated cost of $40 million, by using AR/VR technologies.

Reliance Jio has invested $15 million in a Silicon Valley start-up, TWO, which works in the AR/VR field.

Challenges facing the market

Amidst rising adoption in India, the AR/ VR market still faces a number of challenges. This market is extremely hardware oriented. To participate VR experiences, one requires VR headsets such as the Oculus or the HTC Vive, which are not cheap. The high cost of equipment, development and testing in the country impedes the potential market for these technologies. So, a challenge for this industry is cost. Making this technology more affordable will help cater to the demand and at the same time, spread more awareness.

The lack of quality content for AR/VR consumption is another hindrance faced by the Indian market. Users expect go­od quality content after paying the price for it. But due to the cost incurred in testing and development, the quantity of content generated is extremely minimal. How­ever, this issue can be tackled by engaging users during the development and implementation phases. Many companies worldwide launch their services in alpha and beta modes, wherein a few users are allowed to interact, judge and provide useful inferences for the service. As for the quality, there is a need to create a better platform to democratise the creation of AR/VR ex­periences. The creation of better tools and initiatives from entertainment and media heads will also help in providing quality content to users.

There are not many institutions in the country that can educate people on ad­vanced technologies such as AR/VR. Th­ere are only a few dedicated centres on gaming, data science, AI and AR/VR. So, lack of education is another hurdle in the AR/VR market, as young minds are not being exposed to the potential opportunities and career options in this field.

Apart from these technological issues, customers are also wilfully ignorant of the potential of AR/VR, and still consider it to be a luxury. While investors see it as a fresh and unproven market, spreading aw­areness and making the technology more affordable and better in terms of quality and quantity is the only way to improve the AR/VR market.

What does the future hold?

There has been a growing influx of investment and funding in the AR/VR industry in India. Because of this, one can conclude that India’s AR/VR industry is poised for significant growth in the coming years. There has been significant growth in start-ups, and established tech companies have started exploring the potential of AR/VR market, while leveraging the growing demand across the country. There is also potential for integration of technologies such as AI with AR/VR. The demand for the AR/VR in the edtech, manufacturing, healthcare and retail sectors is already high and can soon expand to other sectors such as travel, hospitality, media and entertainment. However, along with the investment, there is an urgent need for educating people about the availability and usage of this technology. More and more institutions are expected to introduce these subjects into their curricula, while companies that provide these technologies need to make them more affordable for the general public to drive their adoption.