India’s Internet and E commerce – 2016

Can India catch up to the Internet growth of the World?

India is at the edge of a digital boom. India is the 2nd largest Smartphone market in the world, after China. Though there are more than a billion people living in India only half of the Indians use Internet. According to IDC, about 400 million people in India are connected to the Internet by means of Smartphones.

Internet penetration in India is gradually increasing Though India’s internet penetration is the lowest in the world. Average internet speeds in India are much lower than its counterparts like China.

Smartphones have become a part of our lives. It is inevitable that we are highly dependent on Smartphones for usual shopping to booking bus or train tickets. Imagine a day without your Smartphone! You are right! These days you can’t complete a day without your Smartphones.

Wait! What did i say? We are Smartphone Obsessed to some extent. The extend of it may vary from one person to other. According to a WDR (World Development Report), India had more than 200 million Internet users, compared to 665 million in China. There is more room for the technology companies to grow in India. Most Indian Telecom companies are trying hard to implement 4G services in India by this year itself.

Indian Smartphone market is flooded with different Chinese smartphone brands. With the expansion of E-Commerce websites like Flipkart, Snapdeal etc. various chinese smartphone brands have taken the online route to enter the Indian market.

These Ecommerce websites drive the sales of these smartphones in an astonishing way.  Online way of selling smartphones in India was first adopted by Motorola. Following the success of “Moto G” and “Moto E” smartphones, many other smartphone brands like Xiaomi, Infocus, LeEco, Lenovo, etc. has started selling their phones through the online mode.
Now with the stiff competition from chinese brands, Micromax which is the 2nd largest smartphone manufacturer in India had started an online only brand ‘YU’ last year to take on the chinese rivals like Xiaomi, LeEco among others.

Chinese brands has the advantage of cutting edge technology and lower pricing since, China is the world’s manufacturing Hub for electronics. Many chinese brands like Xiaomi, LeEco, Meizu, OPPO etc. has released smartphones with specs and features that are found only in an high end smartphone but at half of the cost.

Due to this predatory pricing by these chinese brands, Indian consumers are tempted to buy a smartphone from these brands. Price to specs ratio has reached a staggering level that now you can buy a phone with 3GB RAM at around Rs. 6000 to Rs. 7000 price range itself, thanks to the chinese brands for releasing high end smartphones at much lower prices.

LeEco, a chinese Internet conglomerate has taken this pricing strategy to a another level by giving its products like Smart TVs and Smartphones for free in China. While you might be wondering how is this possible, LeEco president said in press release that the future of Smartphone market is the Content and not the Hardware. LeEco gives their products for free and instead it charges the consumers to use their Content services. LeEco has the widest range of video and content services in China.

While this may sound crazy, the LeEco is confident about its business strategy which emphasis on content services rather than charging the consumers for hardware. LeEco had a grand success in china using this strategy, but we will have to wait and see that this model will work in India where there is lower internet penetration and people are hesitant to pay for content or video related stuffs like Games in Google Playstore or Apple App store.
With the 4G LTE growing at a massive pace, there is hope that the hope of the companies like LeEco may come true. People are unwilling to pay for online videos or games since it consumes huge amount of precious GBs. With 4G rollout by many telcos in India, this scenario may change completely since 4G technology enhances the video streaming experience at a much lower price.

By 2017, India’s internet population is to grow to an all time high of 600-700 million according to a report by IDC. With 4G tech picking up pace in India, companies like Airtel, Idea have already rolled out 4G services in many states. Reliance Jio’s  4G rollout is seen as an important factor in bringing the India’s Internet growth, as it has pan india 4G license.

Thus, India is at the verge of an digital boom which will surely cater to the needs of young Indians like me. We will have to wait for a year or two to see the full potential of these 4G services and the change it brings to our daily lives with the ever evolving high tech devices.