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$100-bn digital consumer spending potential by 2020: Google & BCG report

E-commerce for products such as apparel and accessories, consumer electronics, durables, food and grocery, is likely to be the biggest constituent with the market size estimated to reach USD 40-45 bn

Press Trust of India  |  Mumbai 

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is expected to grow 2.5 times to around USD 100 billion by 2020 led by growth in e-commerce, travel and hotel, and digital media, says a report.

Indians at present spend around USD 40 billion through digital transactions.

"Potential exists for digital transactions to triple from around USD 40 billion to USD 100 billion by 2020," the report by in association with the Google said today.

for products such as apparel and accessories, consumer electronics, durables, and grocery, is likely to be the biggest constituent with the market size estimated to reach USD billion by 2020, from around USD 18 billion at present.

Digital payments for travel and hotel is estimated to touch USD 20 billion by 2020 from USD 11 billion at present, to reach to USD 30 billion from USD 12 billion at present, and to reach USD million from USD 200 million, according to the report.

has grown nearly two times in four years to reach 430 million users at present, propelled by cheaper smartphones, cheaper data and more mobile-specific or local language content, it said.

The report found that women, new users from non-tier 1 cities and above 35 years shoppers will drive this growth.

It also estimates that by 2020, the women shoppers will increase 2.5 times and older shoppers will increase more than 3 times compared to today.

"With the improvement of infrastructure, will take off in from cities beyond metros and together it is expected to comprise more than 50 per cent of the total by 2020," it said.

However, it observed that digital transactions in still lag far behind, with it being at nearly one-third of levels and one-fourth of the levels in the US across most categories.

"Only one in five in shop for products online, one in six online and a negligible percentage pay for Even among those who transact online, only 20 per cent spend a significant 60-65 per cent of their total spends online," the report said.

Around 75-80 per cent atill do not spend online currently, the report said, adding, "this underscores that even though the has gained ground over the last few years, the actual digital spending is still in evolutionary stages in India," it said.

It observed that for the price conscious Indian users, discounts can be a good trigger to drive trials and building comfort with digital and guiding them along the purchase pathway.

said, "Digital spending in India are at a cusp of significant wave of change, while we have seen enthusiastic response to adopting newer forms of digital payments in the last few years, the base is still relatively small."

The report said that among occasional shoppers, which comprise 75-85 per cent, value added services will be the key differentiator and for frequent shoppers comprising around 15-25 per cent, it would be imperative to create unique propositions like loyalty programs and develop to drive stickiness.

First Published: Thu, February 15 2018. 17:34 IST
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