Between 2020 and 2021, there was an addition of 47 million internet users in India bringing the total up to 624 million people and counting. While the absolute numbers might seem large enough already, the growth only represented an 8.2% rise.
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However, it is not surprising. India’s digital economy has been steadily growing over the last decade due to cheaper internet prices and smartphone penetration. It is estimated that the total value of India’s digital economy can break $1 trillion by 2025.
So, which industries are going to be the main beneficiaries of this growing consumer market? Here’s a quick list:
E-commerce
One of the biggest winners of the growing digital economy in the country over the last decade has been e-commerce firms, like Amazon and Flipkart. The Indian e-commerce market is expected to grow up to $200 billion by 2027.
Online grocery delivery companies like BigBasket have also done pretty well, especially in recent times due to the effects of the coronavirus pandemic. Earlier this year, a majority share of the company was acquired by Tata Digital for $219 million.
Online food delivery
The online food delivery segment has also witnessed an epic run in the last few years and is expected to put up a double-digit CAGR of 28.94% between 2020-2026. Notable companies in this segment include Swiggy and Zomato, and both have received considerable interest for additional funding from both local and international investment firms and companies.
Recreational online services
Lastly, recreational online services like gaming, fantasy sports, and iGaming have also grown steadily in India. With easy-to-use digital payment services like UPI, it has been easier than ever to transact at online casino sites, sportsbooks, and fantasy sports platforms operating in India.
However, while this segment is expected to grow equally along with the others, there are some regulatory concerns. For example, India is yet to regulate iGaming services which can lead to a lot of confusion. Yet, for the foreseeable future, it seems like the market will continue to be unregulated even though some steps like the formation of the Meghalaya Gaming Commission have been noted.
Digital is the future
With a huge young population and a lot of opportunity for growth remaining, the digital economy in India is just getting started. While technology has been a significant part of the Indian economy for more than 20 years now, the focus has been shifting from exporting IT services to a consumer-oriented digital economy over the last few years.