The growing importance of m-Commerce: How to achieve 500 million rural Indians

According to SAP Survey released on October 2013, 80% of the population makes other uses of mobile phones, other than just calls and text. 63% of the consumers access the internet once a day. 72% of the mobile users do bank transactions on their devices. From those who indulge in mobile purchases, half of them indulge in m-purchases for entertainment purposes. In fact, 30% of Snapdeal sales come from mobile. Therefore, given these statistical insights it is easy to imagine, how mobile influences today's e-businesses.

Furthermore, a recent report from IAMAI found that the number of mobile internet users in India is expected to nearly double between December 2012 and March 2014, from 87.1 million to nearly 165 million. Despite mobile network capacity limitations and a limited consumer embrace of large-screen mobile devices in the Indian market consumers overwhelmingly favour mobile Internet adoption because they value the ability to quickly access services and stay up-to-date while on the go. This dynamic will only accelerate in a country with a population greater than 1.2 billion people. 50% of whom are below the age of 26.

TRAI revealed that seven out of eight consumers access the Internet from their mobile phones. A deeper consumer behaviour analysis in rural India reveals that music and movies form a major source of mobile consumption, and they are willing to spend anywhere between Rs.1,000 and Rs.1,600 per month on such entertainment contents. Most people in this segment procure second-hand mobile devices for just between Rs.300 and Rs.600, but with extraordinary speaker and micro SD card facilities. They get the SD cards filled at local shops @ Rs.40/GB with songs and videos. Affording downloads to atleast 50% of these consumers at lower rates, can drive mobile internet subscriptions in this untapped market of over 150 million users.

Secondly, census 2011 revealed that there are 95.8 million cultivators, for whom farming is their main occupation; over 600 million Indians are deployed in an array of related agricultural activities. Weather and crop information will be valuable to this segment. Subsidised, reliable and customised information-on-demand can potentially replace their reliance over the comparatively cost ineffective television and radio media. More people who subscribe to such internet applications, greater the snowballing effect. Even if 20% of this population see value in it, we've targeted 120 million users.

Thirdly, for most of the e-commerce companies, around 30-40% of current revenues come from tier I/II cities. With the growing trends of internet consumption in e-tailing, mid and low socioeconomic classes are expected to drive the future growth of internet consumption. Already, 18% of the lower-income "strugglers" (whose annual household income is less than Rs 1.5 lakh) have Internet access, and 6% are engaged in commercial activities online. Targeting another 20% in this sector builds another 230 million consumers.

All in all, these three broad areas can help in strategic achievement of 500 million netizens.

-       Akshay Kumar (12DM-020) | EBUS | Section A