Rural Bharat leads India in digital growth

Rural Bharat leads India in digital growth

Boasting a total user base in excess of 574 million users and with the second-fastest growing Internet savvy population, India offers a $50 billion-plus commercial potential via new users and its rural populace. Consumption habits forced by the Covid-19 pandemic will lead to a further jump in those numbers.

India's digital user base is set to leapfrog at a phenomenal rate this year, thanks to Coronavirus pandemic that has forced nearly every strata of society to embrace the internet. The driving force behind that growth will, however, not be the typical urban households.

Instead, the biggest driver of digital revolution will be rural India - having registered a mind-blowing internet growth of 45per cent in 2019 compared to urban India's 11per cent, according to insights from the IMRB ICUBE report by consulting company Kantar. “The new decade is expected to witness the next wave of digital India aided by the recent Covid-19 pandemic that has catalysed the speed at which the already connected consumer is getting further connected with devices, payments and e-medicine," said Puneet Avasthi, senior director of insights division at Kantar.

Currently estimated at 574 million, the number of monthly active internet users in India has registered an average annual growth of 24 per cent, according to the report, indicating an overall penetration of 41 per cent in 2019. The current base of 264 million internet users in rural India is expected to reach 304 million in 2020, with local language content and video driving the boom. The Kantar report observed a 2.5 times increase in penetration among the population in the last four years, while it found mobile to be the device of choice as 100per cent active users browse the internet through it.

What are the factors behind the surge?

Trends mapped by analysts show that due to the increase of work from home practice, users are consuming content primarily on their mobile phones or television. Due to higher active users and time spent on online entertainment (news, social media, music, OTT, videos, etc.) and streaming of television and video game apps, advertisers and brands are investing more spends in these platforms and channels to reach more consumers.

According to BARC-Nielsen data, total TV consumption grew by 8per cent across India while as per other statistics and reports internet hits outpoured to 50-70 per cent across India during Covid-19 disruption period.

What has the government done to achieve digital leadership?

In 2019, McKinsey carried out a comprehensive review of India's digital opportunities compared to 16 other mature and emerging economies across 30 dimensions of digital adoption since 2014.

The report found that India was the second fastest country among them in digitising. “Our Country Digital Adoption Index covers three elements: digital foundation, or the cost, speed, and reliability of internet connections; digital reach, or the number of mobile devices, app downloads, and data consumption; and digital value, the extent to which consumers engage online by chatting, tweeting, shopping, or streaming.

India's score rose by 90 percent between 2014 and 2017, second only to Indonesia's improvement, at 99 percent, over the same period... The public sector has been one strong catalyst for India's rapid digitisation. The government's effort to ramp up Aadhaar, the national biometric digital identity programme, has played a major role, and the Goods and Services Tax Network brings all transactions involving about 10.3 million indirect taxpaying businesses onto one digital platform, creating a powerful incentive for businesses to digitise their operations,” the report said.

According to Kantar, the solid underlying foundation of digital infrastructure will continue to drive growth in the coming months, especially in view of the coronavirus lockdown. With more than 60per cent addition to daily Internet users in the last one year, Kantar found that about 90 per cent of them were accessing the internet for entertainment and communication needs.

What are the opportunities arising out of this?

According to Bain & Company, India can unlock a $50 billion-plus potential via new internet users and reengaging users who have dropped out. It is evident that custom messaging and localization is the key to winning in the key growth markets, but opportunities galore for new revenues out of the digital growth in rural India.

Of the total users, only 40 per cent make purchases online - and 90per cent of that base is from more affluent segments.

“Because 60per cent of users go online for product research and content but prefer to make purchases offline, there is a major opportunity to unlock that broader user base. But the journey to becoming a regular user requires building trust: Typical users take three to four months from their initial internet access to their first transaction. The more time they spend online, the more their trust increases. New users make just 27per cent of purchases online, but users who have been online for two or more years make 61per cent of their purchases via online channels,” the Bain report said.

It is therefore critical to engage and retain users with relevant content, especially since a large number of transactors from the key segments actually drop out after making a purchase, indicating a large opportunity to re-engage with these set of users to broaden the transaction base.

How does the road ahead look like after the Covid-19 pandemic?

In reducing the barriers access socioeconomic strata of the society, the Indian government has not only empowered the average rural household but also provided the industry a huge scalability not available in most other countries. This is something corroborated by McKinsey: “With both private- and public-sector action promoting digital usage, India's states have started bridging the digital divide.

Lower-income states are showing the fastest growth in internet infrastructure, such as base tower stations and the penetration of internet services to new customers. While low- and moderate-income states as a group accounted for 43 percent of all base tower stations in India in 2013, they accounted for 52 percent of the incremental towers installed between 2013 and 2017.”

For instance, the northern Indian state of Uttar Pradesh alone added more than 36 million internet subscribers during the period of 2014-18. “Ordinary Indians in many parts of the country - including small towns and rural areas - can read the news online, order food delivery via a phone app, video chat with a friend (Indians log 50 million video-calling minutes a day on WhatsApp), shop at a virtual retailer, send money to a family member through their phone, or watch a movie streamed to a handheld device,” the McKinsey survey found.

The future is thus full of promise and prosperity and ripe for further government and private collaborations to create digital access, awareness and literacy. Locally-relevant content solutions will improve user-engagement and unlock those millions of new users by doubling internet penetration in rural areas and increasing women's participation. The digital boost will also create an ecosystem for the self-employed to diversify and augment income.

Related Stories

No stories found.


No stories found.

Defence bulletin

No stories found.

The power of the quad

No stories found.


No stories found.

Women Leaders

No stories found.