Indian consumer technology sector set to touch $300B by the end of 2027: Chiratae

Strong digital public infrastructure and population scale solutions will drive consumer tech growth in the country, according to a report by Chiratae Ventures in collaboration with Google and 1Lattice.

Indian consumer technology sector set to touch $300B by the end of 2027: Chiratae

Wednesday December 13, 2023,

3 min Read

The potential of India’s consumer-tech industry is likely to be unlocked by the strong digital public infrastructure and population scale solutions, according to a new report by early-stage venture capital firm Chiratae Ventures in partnership with Google and 1Lattice.

The report noted that strong growth is also expected to help the consumer tech industry reach a total addressable market (TAM) worth $300 billion by 2027 from the current $100 billion.

“With a current market worth $100 billion and an expected surge to $300 billion by 2027 (CAGR 25%), India's consumertech isn't a fleeting but a substantial force,” Roma Dixit, Director of Financial Services at 1Lattice, said.

“This growth potential is underscored by the ambitions of Indian homegrown startups, driven by robust revenue growth and eyeing global expansion, fuelled by an ever-growing digital native user base,” Dixit added.

The report—Cracking the Code: Unveiling India’s Consumer Landscape—delves into trends within the consumer tech industry and provides in-depth analyses of gaming, ecommerce, fintech, entertainment, and healthcare sectors.

Over 500 million Indians now actively seek entertainment and gaming services daily while over 1.2 billion people need good healthcare. More than 1.1 billion people have a bank account and seek to invest in financial services while 880 million people in India aspire to spend on fashion and apparel. 

The rise in demand for services has resulted in an increased focus on personalisation, a growth in experiential retail, and a growing influence of social media.

At present, mobility—which includes ride-hailing apps, automobile marketplace, and online car rental market—dominates the market with a share of 30%, followed by entertainment (print, digital and television media) at 20%.

However, by 2027, fashion is expected to overtake entertainment as the second leading sector with apparel and accessories, beauty and personal care, footwear, jewellery, and watches, according to the Chiratae report.

The top emerging trends shaping the global consumer landscape include social commerce, immersive shopping experiences, and mobile gaming, especially in the US, Europe, APAC, and MENA regions. Meanwhile, the Indian consumer technology sector is experiencing a swift rise in over-the-top (OTT) services on the subscription side, increasing involvement of women in gaming, commerce, and social media, and a notable rise in green mobility solutions such as EV sales, the report added.

Dynamics of the Indian consumer

Indian consumers, on average, dedicate over four hours daily to their smartphones. Fintech apps dominate usage followed by entertainment apps capturing a significant share at 70%. On-demand services are perceived as essential expenses in the daily lives of about 70% of consumers, according to the report.

Gaming, ecommerce, and healthtech are also gaining traction among Indian digital consumers. Online and professional gaming is rising in India, with an increasing number of active female gamers. 

The growth of the ecommerce sector is seen due to the shift from offline to online channels for apparel and groceries because of the discounts and offers available. Healthtech is growing at a CAGR of nearly 40%, with online pharmacy being the most used platform in Tier I cities, the report stated.

“We believe that the consumer tech sector is both a horizontal and a vertical play with winners at the intersections of horizontal technology disruption and vertical domains such as health, finance, education, agriculture among others,” Sudhir Sethi, Founder and Chairman of Chiratae Ventures, said.

Chiratae Ventures continues to invest in companies such as Agrostar, Healthifyme, Miko, Artium, and a new breed of consumer deeptech companies such as KBCols and Aether, Sethi added.

Edited by Affirunisa Kankudti