India tops a list of the world’s major economies for the greatest share of Internet traffic happening on smartphones and the country’s online shopping companies see a greater share of shoppers transacting on smartphones than even China, data collated by technology analyst Mary Meeker in her latest Internet Trends report showed.

Of all the Internet traffic in India, 65 percent was accounted for by access via mobile phones, according to a Statcounter survey, and 41 percent of all Indians who made online purchases did so on their mobile phones in 2014, the report said, citing Morgan Stanley Research. This is more than in any other major economy including China and the U.S.

India’s smartphone boom has created many a first time user of the Internet directly on the mobile phone, rather than on the PC.  KPCB/Internet Trends Report

Meeker, an analyst at venture capital firm Kleiner Perkins Caufield Byers, said India “appears to be at an Internet penetration growth inflection point,” citing data from World Bank and Hillhouse Capital Management Ltd., a privately held investment management firm.

India’s smartphone boom is set to rapidly increase the number of people with Internet access. Various industry estimates expect the number of Indians with Internet access will double to over 500 million by 2020.

In 2014, India added 63 million new Internet users to take the total to 232 million, 37 percent year-on-year growth, according to Meeker’s report. This made India the world’s third-largest Internet market by users. China and the U.S. are the top two.

That growth has also put India in the top two positions for all the major Internet companies, as a base of monthly active users: India is the second largest base for Facebook Inc. and Linkedin Corp., the largest for messaging app Whatsapp, and the fastest growing user base for Twitter Inc., according to data collected by Meeker in the report.

India’s online shopping scene is evolving into one led by smartphone adoption. Shoppers are using the mobile phones to make impulse purchases and online shopping companies in the country have seen their mobile apps downloaded in the millions.  KPCB/Internet Trends Report

India’s online shopping companies Jasper Infotech Pvt. Ltd., with its shopping site snapdeal.com, and Flipkart Internet Pvt. Ltd., with its eponymous online marketplace, have a far greater proportion of customers using mobile phones to make purchases than larger Chinese companies Alibaba Group Holding Ltd., JD.com Inc. and America’s eBay Inc. the report said.

Flipkart has already announced its strategy of going mobile only in the near future. Myntra, its fashion unit, is now accessible only via a smartphone app.

According to a study released by market research firm, Zinnov, “right from user research to product anytime and anywhere, smartphones are an emerging point of purchase and to address the demand from upcountry markets and changing consumer shopping pattern, e-commerce companies are increasing their focus on mobile commerce”.

The survey found over 91% of the consumers had researched a product or service on their phone while online transactions on the smartphone platform rose between 30-50% in the upcountry areas.

Further, it said 54% of the consumers have purchased either a product or a service from their smartphones.

It opined that major e-commerce players like Flipkart and Quikr are serious about their plans to augment the m-commerce platform.

In 2014, 81 million units of the smart gadget were shipped to the country.
“Smartphones are already outpacing the growth of feature phones and are expected to show a massive 36% CAGR over the next five years making it to the 651 million mark by 2019… The unstoppable surge of smartphones in India continues with 29% of urban population with a base of 409 million users adding to its adoption,” the research firm said in a statement.

  • Excerpts from Times of India Articles.

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Bhaven Shah