India's digital economy set to grow 10x in 10 years: RedSeer

India's digital ecosystem is set to grow by 10x in the next 10 years, RedSeer said on Friday, due to accelerated internet adoption in the country facilitated by the pandemic.

At the TiE Delhi-NCR’s India Internet Day, the internet-focused advisory firm highlighted that the consumer internet spend will grow 22 percent to reach $800 billion by financial year (FY) 2030 compared to $85-90 billion in FY2020.

Online grocery, pharma, edtech, travel, e-tailing, mobility, and bills and recharge, among others are integral to the consumer internet market.

"Democratisation and broad based sector growth to happen in next 10 years (sectors other than e-tailing will also capture major share," RedSeer Consulting said in the presentation at TiE Delhi-NCR's India Internet Day on Friday.

Due to the pandemic-induced lockdowns, many consumers were forced to use digital channels for shopping, basic grocery deliveries, entertainment and education.

People in India on an average spent 4.6 hours everyday on their smartphones compared to 3.9 hours in China and 3.6 hours in the U.S, in 2020.

The growth of time spent online accelerated the need for digital retail. Now online grocery, among other deliveries, is set to leapfrog organised retail.

Short-form content platforms, including Josh and Moj, and over-the-top (OTT) entertainment platforms including Netflix, Amazon Prime and AltBalaji will see more growth than traditional TV.

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People would also prefer to use unified payment interface (UPI)-based payment alternatives instead of cash, and the buy now-pay later schemes, being given out by many fintech platforms, will take over credit cards consumption.

The accelerated internet adoption has also given rise to many consumer-internet startups, in edtech, insurtech, mobility and the foodtech space.

Unlike few years ago, when American or Chinese startups would lead the road, Indian startups are even creating and leading in major categories.

"India has a vibrant homegrown digital ecosystem and is one of the select few countries (incl. China, USA) where homegrown Digital companies dominate the internet market," said RedSeer.

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Currently, there are at least 10 startups --including fintech leader Paytm, beauty and personal care marketplace Nykaa, insurtech platform PolicyBazaar and logistics facilitator Delhivery-- set to get listed.

And food delivery platform Zomato's successful listing has only made other startups more ambitious to file their draft red herring prospectus (DRHP).

The tech initial public offering (IPO) pipeline could add $200 billion India's tech listed market capital. Nifty IT's current market capital is close to $400 billion.