Data tracker: Digital transactions to hit $100 billion by 2020, says report

Even as the number of Indians going online multiplies manifold, the rate at which users are adapting to digital transactions, or the frequency with which they are shopping online is still low. A BCG-Google report, Digital consumer spending in India, says that digital transactions could triple from $40 billion to around $100 billion by 2020. Also it says a significant number of new users will come from non-tier-1 cities, women and older consumers.

Low digital transactions

Adoption lags far behind China, USA across categories

Only 1 in 5 internet users in India buy products online compared to 4 in 5 for US and 3 in 5 for China 

Only around 21 per cent of internet users use online banking in India compared to almost 70 per cent in US and 50 per cent in China

Adoption of paid digital media is really nascent in India with only 0.7 per cent of India’s Internet users adopting it, a lot of this is a result of low digital maturity among a bulk of internet users in India

Low spends 

Only 20 per cent of online shoppers spend a significant, 60–65 per cent, of their total spends online

Nearly half of online transactors spend only 5–10 per cent of their monthly purchase basket online

The opportunity

Internet users to grow by nearly 1.5 times, from third of the population to nearly half of the population by 2020

75 per cent of internet users would have digital age more than 2 years

Growth drivers

Women, 35+ year olds and smaller tiers will drive growth

There will be 2.5x women shoppers and 3x older shoppers (35+ years) compared to today

Online shopping will take off in non tier-1 cities as consumers there mature while infrastructure improves, these cities will comprise more than 50 per cent of the online shopper base by 2020

With the profile of online shopers changing, marketers and e-tailers will have to rethink their offering

Source: Digital consumer spending in India, BCG-Google