India internet users set to hit 151 mn by next year

With urbanised pockets of the population, changing demographics and growth in mobile tele-density, tier II & III cities hold immense potential for marketers

e4m by Saloni Surti
Updated: Aug 23, 2013 7:46 AM
India internet users set to hit 151 mn by next year

India continues to witness growth in the number of internet users. India recently surpassed Japan to become the third largest internet population in the world. While marketers are exploiting the medium well, exchange4media takes a look at where this growth coming from and how can it open new doors for marketers.

Change in demographics of India’s internet population
According to a report by eStatsIndia, the Census report of 2011 suggests that India had one of the lowest numbers of households with internet connectivity, which came up to around 3 per cent of the population. 75 per cent of the internet users were below the age of 35 years, with the age brackets of 18 to 24 years and 25 to 34 years driving internet consumption. Total internet population stood at 74 million. Mobile internet users (as percentage of internet users accessing the internet through mobile phones) were around 10 per cent in 2011, which is around 15 million.

The stats also give a view of internet buyers, which stood at 17.59 million in 2011. Out of a total of 6 million mobile internet buyers, only one million were pure mobile internet buyers (buyers who complete the entire transaction purely on mobile itself).

Given the low user numbers in the Census report nobody could have anticipated how much the digital game would change within a span of just two years. Not only have the number of users gone up, market dynamics too have changed completely.

The eStatsIndia reports points out that total internet users shall reach 151 million by 2014 pan India (including 53 cities with more than one million population in India) from 83 million in 2012. The growth is expected to occur at a CAGR of 25.31 per cent. Mobile internet users are expected to grow from 10 million in 2012 to 32 million in 2014 at a CAGR of 80.41 per cent. Pure mobile internet users are seen as growing from two million in 2012 to six million in 2014.

The report further states that the stats of internet buyers also exhibit a northward growth. Total internet buyers will grow at a CAGR of 34.96 per cent between 2012 and 2014, implying an increase from 20 million in 2012 to reach 38 million in 2014. Also, it is anticipated that there will be more travel buyers as compared to non-travel buyers.

Where will this growth come from?
The growth witnessed so far has been skewed towards metros driving a major chunk of internet users and penetration. However, there shall now be growth from tier II and III cities due to the urbanised pockets or strata of the population in these cities. Here, other demographics such as age, education and income also play a crucial role for tier II and III cities, the report explained.

These are the markets that shall be the catalyst of growth and hold immense potential for marketers. As per the report, the top eight metros account for 70-75 per cent of the current total internet penetration in India. However, SEC C, SEC D and SEC E districts and cities are expected to drive the future growth of internet users and buyers in India.

Mobile tele-density is also expected to grow further from non-metros, with major cities already having more than 100 per cent mobile tele-density.

Potential of tier II and III markets is no longer a secret. With huge traction for e-commerce coming from these cities and growing demand for regional content, these markets are already hot spots for a number of brands. Going forward, these markets will require as much attention as the metros in media plans because that is where majority of India’s internet savvy population shall dwell.

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