NEW DELHI: Boston Consulting Group and Internet and Mobile Association of India announced in its report that India’s Internet economy will grow to almost Rs 10 trillion by 2018, accounting for 5% of the country’s gross domestic product. Internet economy includes e-commerce services and products, advertising, online content, devices, connectivity, as well as private infrastructure and government spend in these areas. India’s Internet economy, which was about Rs.3.6 trillion in 2013, contributed 3.2% to the GDP, the largest among the developing countries and sixth largest globally, the report said. About half the population, or 580 million Indians, will be online over the next three years, including the young and old alike, besides women and the rural population. “The report is based on a survey that was done over the last three years. It included 25,000 consumers and over 100 product categories,” said Alpesh Shah, senior partner and managing director, BCG. “We looked at how consumers are doing information search and purchasing online.” According to Shah, what stood out was the driver behind the growth of the Internet base. “It was not only the younger demography, but also the older generation migrating to digital platform,” said Shah. “With growing aspirations, there were more people coming online from rural India as well as more women as compared to before.” The report said while 60% of all Internet users were fewer than 25 in 2013, by 2018, 54% of the Internet user base will be over 25. In the same timeframe, 40-50% of net users will be from the rural areas. There will be one women user for every 1.9 men users as opposed to one woman for three men online a year back, the report added. In December 2014, India’ Internet user base reached 300 million, the third largest in the world behind China and the US. Rajan Anandan, managing director at Google India Pvt. Ltd and chairman of IAMAI said the last year was very good for the industry with a new government coming in, explosive growth in the mobile startups and rise of the e-commerce companies. “E-commerce companies’ revenues were in excess of Rs.25,000 crore at the end of the year,” he said. “Six years back, there was no single billion dollar Internet company in India, now there are seven of them.” It includes three public companies, Info Edge (India) Ltd, MakeMyTrip Ltd and Justdial Ltd, and four private companies Flipkart.com, Snapdeal.com, Paytm.com InMobi.com. “There are only three countries which have more than five Internet companies with billion dollar valuation, India being the third one behind the United States and China,” Anandan added. The e-commerce industry is projected to grow to $75 billion by 2018 from $17 billion in 2013, devices to $25 billion from $12 billion and connectivity to $12 billion from $5.6 billion. Private infrastructure that includes telecom and corporate devices is set to become $36.7 billion from $22 billion in 2013. Government spending in the area is set to rise to $3.4 billion from $1.4 billion under the same time frame, the report said. The country also saw a 10-fold increase in the venture funding that went into Internet companies in 2014 as compared to 2013. More than 800 Internet startups got funded at some level in 2014 as compared to 200 Internet startups in 2012, said Google’s Anandan.
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