According to a report released by Google, Temasek, and Bain & Company, India’s internet economy is expected to experience significant growth, reaching $1 trillion by 2030, up from $175 billion in 2022. The report attributes this growth to increasing digital consumption in sectors like e-commerce, online travel, food delivery, and ride-hailing. It also states that by 2030, the internet economy will contribute 62% to India’s technology sector, compared to 48% in 2022, and will account for 12-13% of the country’s GDP, up from 4-5% in 2022. Factors driving this surge include rising digital demand in tier 2+ cities, digitization of traditional businesses, and the success of India Stack.
The report highlights three key forces for India’s digital transformation: the adoption of digital technologies by consumers, investments in technology by businesses, and the digital democratization facilitated by India Stack. The managing partner of Bain and Company (India) predicts a six-fold growth in India’s internet economy over the next decade, with B2C e-commerce playing a major role. Traditional businesses and MSMEs are expected to increase their investments in digitization to cater to tech-savvy consumers.
The growth of India’s digital economy is projected to make the country an attractive investment destination, with three out of five investors expecting increased deal activity in the next few years. The report also reveals that investors plan to allocate a significant portion of their funds, over 75%, to digital investments in the next five to seven years. Sectors such as software-as-a-service (SaaS), fintech, and B2C/B2B e-commerce are particularly appealing to investors.
B2C e-commerce is anticipated to maintain its dominance in digital services and is projected to grow to $350-380 billion by 2030, representing a five to six-fold increase. The number of online shoppers is expected to double, with more than 60% of new shoppers coming from smaller towns. The report also notes that the growth of the internet economy will be driven by a doubling of household incomes from around $2,500 to $5,500 by 2030.
Consumers in tier 2+ regions are shown to be more willing to try new brands and products and are willing to pay more for personalized and premium offerings, particularly in healthtech and edtech. The report highlights that 82% of tier 2+ consumers are willing to pay higher prices for personalized products and services, compared to 70% nationwide. Additionally, 84% of consumers in tier 2+ regions prefer e-consultations over in-person appointments, compared to 75% in other parts of the country.
The report also forecasts substantial growth in healthtech and insurance tech, with an expected increase of 9-15 times. SaaS will continue to drive India’s digital exports, while domestic edtech and e-commerce platforms are predicted to gain more global traction.