Year Of Reckoning
The burgeoning digital economy in India is expected to reach a value of nearly $1 trillion by the year 2025. India's digital consumer base is the second largest in the world and is rapidly growing. The government's approach towards digitising India is lessening the digital divide and bringing technology to even the most remote parts of the country.
The pandemic telescoped a number of trends that otherwise would have taken much longer to materialise. The obvious one is digital integration in our lives. Social distancing is the new norm and without person-to-person interactions our reality is now completely virtual. This has hastened the progress of India's digital trajectory.
Covid-19 accelerated the adoption of digital mechanisms taking financial inclusion to a newer high. Small merchants across the country are now equipped to accept digital payments, making it possible for more small businesses to become part of the formal economy, improving their credit access. As a nation, India moved quickly from being passive consumers of free online content to becoming more confident in making digital payments.
The Big Moves
The year 2020 will always be remembered as the year when India saw its largest tech foreign direct investment when Facebook invested Rs 43,574 crore in Jio Platforms. Consequently, its brand WhatsApp became the face to bring local kirana stores online. Facebook India's Vice President and Managing Director Ajit Mohan points out that no country, not even China, has been able to, in just four years, bring around 500 million people online. Mohan believes that the next big global digital breakthroughs will come from India.
"Over the next five to 10 years, there will be enterprising new models that will show up from India. India's digital economy asks for solutions that will have global applications. Instagram and WhatsApp are extraordinary acquisitions but the innovation across these, and on Messenger, continues to thrive. You have to measure product innovation, not just on the back of big platforms but also how it has evolved in the last few years. In that context, innovation at Facebook has continued and will continue. Equally however, I think much of that innovation will now also come from India," comments Mohan.
Earlier this year, Google too earmarked a $10 billion Google for India Digitisation Fund to help accelerate India's digital economy. The fund is supposed to be spent over the next five to seven years.
Sanjay Gupta, Country Head & Vice President, Google India explained at the time that every day, more Indians are learning to do things digitally. Increasingly, there is a need to digitally solve the challenges that India faces in health, education or agriculture. More businesses need to be connected and bring digital to their core offer.
Enhancing Digital Capabilities
As India's digital capabilities improve and connectivity becomes pervasive, technology is poised to quickly and drastically change all segments of India's economy. 2020 and the Covid pandemic has created a massive interest in digital among brands that is likely to accentuate in the coming years. Sabyasachi Mitter, Founder and Managing Director, Fulcro points out that with physical retail and distribution being disrupted without warning, brands have realised that for business continuity in any such event in future a strong digital focus is mandatory.
"The role of digital in research and selection has become extremely important while online purchase across categories have seen a significant growth. While the initial few months were challenging for digital agencies, the recovery has largely been V-shaped and likely to continue in the future," he says.
With expanding digital audiences, digital advertising has come of age in the country. Digital provides sophisticated targeting mechanisms to advertisers and hence it is considered to be one of the best options for most brands as they see great value in measurable outcomes provided by digital advertising.
Elaborating on the role of digital transformation, Tushar Vyas, President, GroupM South Asia explains that digital is the way of life for many, on both personal and professional front, resulting into multifold increase in digital consumption.
"Changing consumer behaviour and media choices will have a positive impact on the digital advertising expenditure and ac-celerate digital's elevation as the number one medium. During the pandemic, businesses got a sneak peek into the future and how digital can play a significant role in our life which triggered a rethink on many fronts. Digital transformation will be high on priority, resulting into higher investment on digital media, increased focus on ecommerce and business model innovation driven by digital channels," adds Vyas.
India is on its way to becoming a digitally advanced country. Driven by the falling cost and rising availability of smartphones and high-speed data connections, India is already home to one of the world's largest and fastest-growing bases of digital consumers and is digitising faster than many developing economies of the world. The government's rapid digitisation schemes and private sector innovations have empowered millions of Indians with access to internet-enabled services and hence resulted in unlocking the potential of India's growing digital economy, paving the way to make India a robust digital economy in 2021.
