E-retail, foodtech, fintech, and edtech are driving India's internet economy, a new IAMAI study finds. SMEs are expected to drive future growth.
India is one of the fastest-growing internet economies in the world and the internet services industry is estimated to create 12 million new jobs in the country by 2022, a study by the Internet and Mobile Association of India (IAMAI) reveals. At present, the sector employs 10 lakh (one million) people.
By this period, the $33.8 billion industry will grow to $124 billion as more stakeholders throng to the internet economy, IAMAI’s ‘Economic Impact of Internet Services in India’ states. Sectors driving this growth include e-tail, foodtech, fintech, edtech, advertising and entertainment, etc. IAMAI reckons these sectors have “gained critical mass” in India.
IAMAI, however, notes that these are “conservative estimates” and “in the coming days the internet service sector may witness sea-changes that can well inflate the overall numbers substantially.”
Job creation, the study says, would take place on three levels:
Meanwhile, e-tail or ecommerce will form the core of the growing internet services pie. The sector is estimated to be worth $58.2 billion by 2022 riding on a rapidly-expanding user base, increasing consumption and selection of goods, and industry-wide consolidation in the wake of the Walmart-Flipkart deal, which is said to be a watershed moment in the Indian startup ecosystem.
According to IAMAI, “The internet will fundamentally change the way the needs, aspirations and demands of the consumers will be addressed.”
Sectors like agritech have not been included in the study because they are “yet to gain any critical mass that could be used as benchmark for future projections”. Even emerging technologies like AI, ML and IoT have been “kept outside the ambit of this study because the real impact of these sectors is difficult to determine at present.”
SMEs are expected to contribute significantly to the industry growth. There are close to 51 million SMEs in India currently. Over 117 million people are employed in these enterprises. They contribute approximately 37 percent of the manufacturing output, and 46 percent of exports, IAMAI states.
However, only two percent of these SMEs are digitally enabled right now. These “digitally enabled” ones generate 2X revenues as compared to offline SMEs. It is due to the access to a wider base of customers, newer geographies and markets, additional sales channels, etc.
Hence, “there is a conscious effort by government agencies and internet businesses to digitise SMEs. With advances in digitising existing offline businesses, promotion of industry 4.0, digital on boarding of micro-entrepreneurs, etc the impact of the internet services can potentially be greater with newer service categories emerging in the near future,” IAMAI states.