The Internet has fundamentally redefined how things are done in the world today. It has not just brought the world closer, it has given rise to new businesses and an economy that exists just by the virtue of the fact it is powered by the Internet.
However, Internet penetration grew at relatively slower pace during its early days. While the U.S. spearheaded much of this adoption, today countries such as India and China are leading the second wave of Internet growth. According to the KPCB Mary Meeker Internet Trends 2015 report, the Internet penetration growth curve for U.S saw an inflection point in 1996 after which the country saw a rapid growth in Internet penetration.
The report attributes this shift in adoption to companies such as Yahoo, Amazon, eBay that proved to be a big catalyst to the growth in penetration that the U.S. had witnessed. In China, this inflection point came at around 2008, with companies such as Tencent, Alibaba and JD.com powering large scale Internet adoption.
India however, is just at this cusp of Internet adoption, with penetration being at a little over 20%. But the opportunity for Internet-enabled businesses is huge. This is because, while the world hasn’t been the same thanks to Internet, when it comes to India, the Internet would have not been the same, had it not been for mobile phones.
Much of the internet growth in India is today attributed to mobile phones, particularly smartphones. Today mobile accounts for close to 70% of all internet traffic in the country. In 2014, India had over 140 million smartphone users. Most of the internet penetration in the country is being driven by these users.
This is because when it comes to India, smartphones are the primary medium for internet access and content consumption. While desktop and broadband internet failed to see wide scale penetration, smartphones made Internet far more accessible for people across the country. And this has resulted in a massive increase in Internet usage and content consumption.
So much so that, for a lot of Internet-enabled businesses, both global and local, today India is the largest or the fastest growing user base. According to the 2015 Internet Trends report, India is the second largest market for both Facebook and LinkedIn, after the U.S. With over 70 million users, India is the largest market for WhatsApp. India is also the fastest growing user market for Twitter.
All this points to the fact that the mobile internet user population in India which is the primary driver for such numbers, has a hunger for content access that is still not satiated. This presents a huge opportunity for businesses to tap into. E-commerce businesses have already been seeing massive growth, powered by mobile internet users. In fact, the report estimates that in 2014, 41% of all E-commerce sales in India came via mobile.
The report also estimates that there is huge opportunity for growth in internet penetration, where a big chunk of the country’s population is still waiting to come online. And when they do so, it will be via mobile. Here is where an opportunity for businesses to be a catalyst to this growth lies.
While companies such as Amazon and Yahoo fueled this growth in the U.S., the Indian market is relatively untapped, waiting for more online businesses to power the internet penetration growth wave. It will be interesting to see how E-commerce and other online businesses taking a mobile-first approach will drive Internet penetration in the country.