As we move into 2024, India's economic landscape is poised for remarkable transformation. This transformation is driven by long-term digital infrastructure initiatives, first-time, smartphone-enabled internet access, and an increasingly tech-savvy young consumer population. In 2023, India became the most populated country in the world, continuing its climb as an increasingly respected major economy.
Both the corporate and government sectors alike are focused on the continued growth of India’s digital landscape, creating a unique, untapped opportunity for investors. India is home to over 100 unicorns and recently beat economic projections, reporting that the country’s GDP has risen 7.6%.
As India powers its large-scale digital transformation, many parts of its economy will be affected. Thanks to technological advancements, shifting consumer behaviors, and a dynamic business landscape, we see India’s investment potential and believe 2024 will be a landmark year for its continued digitization. Here are some of the key digital consumer trends in India to watch in 2024:
1. Continued Adoption of an Ecommerce-Fueled Economy
As India's digital economy expands, the e-commerce sector stands ready to redefine how Indians shop and interact in the digital era. Unlike the US ecommerce market, which is dominated by Amazon, the Open Network for Digital Commerce (ONDC) initiative aims to enable all sellers in India to sell digitally via a decentralized ecommerce network. The government-backed initiative, a key building block in the “India Stack,” seeks to make digital commerce available equitably to all Indian citizens.
Launched in 2023, ONDC supports a decentralized network that all players can plug into. ONDC enables buyers to discover and connect with any seller with their desired product. We believe this initiative will push more and more consumers and retailers into the ecommerce economy as it continues to showcase its ease and effectiveness. According to a recent joint report by Google, Bain & Company, and Temasek, the Indian e-commerce market could grow by 6x over the next eight years.
2. The Rise of Digital Payments
India has been experiencing a digital payments revolution, with initiatives like Unified Payments Interface (UPI) gaining widespread acceptance. This trend will likely persist, with increased collaboration between financial institutions, fintech companies, and e-commerce platforms to create a seamless and secure digital payment ecosystem.
The momentum gained in digital payments should continue and intensify in the coming year. As more consumers opt for cashless transactions, the e-commerce sector will witness an increased integration of digital payment solutions. This shift will boost convenience and pave the way for innovative financial technologies to redefine the payment ecosystem.
3. Smartphone Penetration to Soar
Thanks to the recent decline in tech costs, data prices in India are now among the cheapest in the world. Low-cost smartphones are enabling India’s consumers to go online, many of which for the first time ever. With only a 47% penetration rate in 2022 and Jio’s recent launch of a $12 smartphone, we project that 84 million first-time smartphone users will join the online community in 2024. For perspective, that’s seven million new users every month or roughly the entire population of Germany for the year.
Source: EMQQ Global, Cable.co.uk, Ericson Mobility Report 2023
2024 holds immense promise for India's digital sectors. As technology continues to evolve and consumer demand grows, businesses in the digital realm must be agile and innovative to survive. The convergence of smartphone adoption, digital payments, and digital infrastructure initiatives will shape a future where e-commerce is not just a transaction but an immersive and easy consumer experience.
The synergy between digital innovation and societal needs is set to shape a more connected, efficient, and technologically empowered India in 2024. For investors interested in capturing the growth of India’s digital economy, the India Internet & Ecommerce Index (ticker: INQQ) is focused on providing investment exposure to this vast and rapidly evolving landscape in the fastest-growing major economy in the world.