India to have 237 million internet users by 2015: Report

Boston: India will see its number of internet users triple to 237 million from the current 81 million by 2015, reports PTI.

In a study titled 'Internet's New Billion', the Boston Consulting Group (BCG) said Brazil, Russia, India, China and Indonesia (BRICI) will have more than 1.2 billion internet users by 2015 - well over three times the number of internet users in Japan and the US combined.

In 2009, the BRICI countries had some 610 million Internet users.

"Internet penetration rates in the BRICI countries will experience compound annual growth of 9% to 20% from 2009-2015, driven predominantly by young users who will form the digital-market eco-systems that will be in place for generations to come," the management consulting firm said.

With BRICI countries constituting many of the world's most populous nations, "It may come as little surprise that their digital-consumer ranks will swell so quickly," the report added.

Describing India as a "low-maturity and high growth market", BCG said Internet penetration rate in India is expected to reach 19% by 2015, up from the current 7%.

"There are currently about 81 million Internet users in India - a number that will nearly triple by around 2015 to 237 million," the report said.

India's Internet use is concentrated mainly in the larger cities, where many users are migrants from smaller towns. This group tends to have had limited exposure to the internet and therefore typically has a narrower range of online needs than more experienced users.

"Offsetting this situation is the prevalence of younger Indian users," the report said. Indian Internet users spend only half an hour online each day, on average - the lowest rate among all the BRICI countries.

This average will increase to only 0.7 hour per day by 2015, leaving India still bringing up the rear among BRICI users in terms of daily time spent online.

"However, this is a conservative projection and that there could be some major surprises depending on how quickly pricing comes down and availability increases," it added.

Among the most prominent trends is that BRICI digital consumers are far more likely to be meeting their digital needs through mobile phones than through personal computers.

With PC penetration still quite low, mobile phones are cheaper and more convenient tools for both communicating and seeking out entertainment.

For India, the next big growth opportunity should emerge from the rural market where penetration of mobile phones is far less than in urban markets, which have already begun to show signs of saturation.

"The biggest gap in rural areas has been network coverage and distribution channels - a divide that most companies are currently trying to bridge.

There is an untapped opportunity for improving data usage in all of India's consumer segments," it added.

Indians' mobile-phone activity is limited almost exclusively to phone calls and SMS, although only about half of India's 507 million mobile-phone owners use the latter. Just 5% use mobile video.

"This could change when third generation (3G) and other forms of wireless broadband are launched in earnest."

The BRICI countries currently have about 1.8 billion mobile-phone SIM card subscriptions, compared with a combined total of 394 million in the United States and Japan.

China, India and Indonesia have SIM penetration rates ranging between 41% and 66%.

By comparison, the United States and Japan are both at around 90%.

By 2015, SIM penetration in China and India is expected to reach 84% and 75%, respectively owing, among other factors, to users taking advantage of prepaid plans from different operators.

Currently 60% of BRICI Internet users are under the age of 35.

As they earn even higher incomes and develop more complex online needs, there will be a colossal opportunity for digital companies to monetise services and products.

Given how rapidly the BRICI markets are developing, companies planning entry strategies will have to act quickly - or risk missing the opportunity to connect with consumers now and grow with them throughout the coming decades, BCG said.

"The Internet is already having a fundamental impact on consumption patterns, and the patterns we're seeing are significantly different from those in the United States and Japan," says report co-author David Michael, who heads BCG's Global Advantage practice.

"Companies relying solely on traditional means for reaching consumers in the emerging markets need to understand the impact that the shift to digital media is going to have," the report added.


India loses $65 billion every year due to inefficient supply chain systems

Inadequate supply chain infrastructure, complex taxation laws, high levels of intermediaries, product proliferation and lack of supply chain visibility are a few supply chain challenges faced by the retail industry in India

Though retail in India is making progress and is expected to grow more than $879 billion by 2018, the country loses $65 billion every year due to inefficient supply chain systems, says a study report.

According to the report published by industry body Confederation of Indian Industry (CII) and Amarthi Consulting, India is ranked 47th on logistics and is behind countries such as Japan, US, Germany and China. The report titled, 'Global competitiveness of retail supply chain-Challenges, Strategies and Recommendations', mentions that supply chain costs in India, which deal with the procurement, manufacture and distribution of products and services, and drive the success of the retail sector, are about 12% to 13% of the gross domestic product (GDP) compared with 7% to 8% of GDP in developed countries.

Currently, the retail industry in India is a $410 billion market and is expected to grow to more than $879 billion by 2018. Food and groceries account for 70% of the retailed items followed by textile and apparel at 7%. However, 95% of the retail sector is unorganised and fragmented. The textiles & apparel segment represents about 40% of the organised sector.

According to the study report, inadequate supply chain infrastructure, complex taxation laws, high levels of intermediaries, product proliferation and lack of supply chain visibility are a few supply chain challenges faced by the retail industry in India.

"Post Independence, there has been only 20% capacity addition to the Indian rail network, while traffic has grown tenfold. Besides, due to the complex taxation laws prevalent in the country, a product is taxed twice, once by the Central government and then by the respective state governments," the report said.

Improving supply chain infrastructure, implementation of goods and services tax (GST), reducing intermediaries, and adopting green supply chain practices are some of the recommendations of the report. (Green supply chains involve integrating environmental thinking into the core operations of a company, starting from material sourcing to delivery to end-of-life recycling. It is expected that implementing green initiatives along a company's supply chain can raise productivity, enhance customer and supplier relations, support innovations, and enable growth).

The retail industry is facing challenges in the form of inadequate supply chain infrastructure and the complex taxation laws prevalent in the country. Investments in road infrastructure have not kept pace with the growth in road traffic, the report states. Only 20% of the roads are in good condition. The rail network is congested as freight moves on the same line as the passenger line.

At the company level, retail in India is facing challenges like product proliferation, high levels of intermediaries, fragmented and large number of retail outlets, suboptimal supply chains and lack of supply chain visibility. The report recommends - among other things - that companies should optimise the supply chain network, reduce intermediaries, improve supply chain visibilities and adopt green supply chain practises.

However, despite these challenges faced by the retail industry in the supply chain system, India has the potential to build the best supply chain across the world, feel some industry players.

Anshuman Singh, managing director and chief executive officer, Future Supply Chain Solutions Ltd, a unit of Future Group, said, "We can be flexible, change with the times and as we have no baggage of the past, we can build the best supply chain."

Besides, he also called for priority to be given to the basic supply chain over green supply chains. "(The) green supply chain has (a) great market, no doubt about it. But, let's first get the basic supply chain right," he said.




5 years ago


I see this as an opportunity for myself to do something for India in this field. I'm currently pursuing MSc Global Logistics in Germany. :-)

Sameer Sen

6 years ago

We have to train the industry professionals according the global standards in SCM.

Professional training programs deliver by organizations like ISCEA & APICS can enhance the knowledge of SCM and help them understand how they can add value and make the supply chain more responsive and efficient.


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