Report predicts boom in rural Indian eCommerce by 2020

By Jennifer Johnson
According to a new report by Boston Consulting Group (BCG), a large portion of Indias eCommerce activity will originate in rural areas for the remainder...

According to a new report by Boston Consulting Group (BCG), a large portion of India’s eCommerce activity will originate in rural areas for the remainder of the decade.

The report anticipates that almost half of all new Internet users in India will come from rural communities and that rural users will make up about half of the total number of Indian Internet users by 2020.

Last year, BCG predicted that India’s Internet economy could triple in size to US $200 billion in the next five years, driven by growth from rural markets.

The report cites Chinese eCommerce giant Alibaba as a model for how companies can best bring online shopping to rural consumers. In 2014, the company invested $1.6 billion to set up 100,000 service centres in rural China, and now has a presence in some 16,000 villages.

Alibaba's eCommerce ‘outposts’ are equipped with computers, and give users a place to collect their online purchases as well as pay utility bills, add credit to their mobile phones and book travel.

At present, two-thirds of Indian Internet users get online using inexpensive Internet-enabled phones with 2G or 3G connections. BCG based its observations on surveys of 4,000 rural Indian consumers in 27 villages and 14 states. 

Source: Bloomberg

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