From an estimated five million internet users in 2000, India is now home to the second-largest digital user base in the world at 665 million, an increase of 13,200 percent over the last 10 years. The next decade promises to be equally exciting for digital India as the internet becomes more inclusive, and its users more heterogeneous. In order to better understand the segment, KPMG in India has developed broad consumer archetypes that cover the range of digital users found in India today. While there will be continuous evolution and, therefore, progression of users over time, these archetypes will remain relevant as the market grows to a billion digital users by 2030.
At present, India is witness to a high-growth, nascent digital market where most users consume free or bundled content. The mobile phone is the dominant device. This digital mainstream is the main entry point for users in India but with time, prosperity, and growing confidence with technology, these consumers will transition into digital enthusiasts. In addition, most of the early adopters of the internet can also be rightfully classified as digital enthusiasts and comprise an older demographic that is both wealthy and conversant on digital platforms.
The top-end of this consumer pyramid is home to the digital sophisticate who mimics the preferences and behaviors of a global digital user. They are likely to have multiple paid audio and video digital subscriptions, embrace at least partial cord shaving, and complete most financial transactions online.
However, the high barriers to entry on income will ensure that growth in this category comes only through an upward progression of users rather than direct inclusion of the unconnected. Sophisticates will continue to be in the minority in India even in 2030.
As this evolution plays out over the next few years, we can expect to observe the following key changes in the profile of the digital-media consumer and the market itself:
On the consumer side, users will move from consuming to transacting online and leverage the benefits of e-commerce and mobile banking, for example. Cord-cutting will become more prevalent as the entertainment needs of a majority are met by the large and diverse library of digital content available. Users will become increasingly aware and concerned with online privacy and its protection, pushing businesses to act more responsibly in the collection, storage, and use of personal data.
For media and entertainment companies, with a billion people online by 2030, each niche of consumers will be sizeable. Digital enthusiasts in themselves will number over half a billion in 2030. Considerable heterogeneity of users – on socio-economic, linguistic, demographic lines – will necessitate micro-segmentation of markets and users. Collaborations and partnerships will be inevitable and scale economies key to survival.
The common thread, however, will remain the demand for more engaging content online. Leisure – online gaming, music and video – will be the driving force for digital adoption, especially among new users. There are greater differences in the digital behavior online of users in developed and developing countries in such categories as reading the news and accessing health information online but hardly any gap when it comes to their entertainment habits.
The internet will remain the next billion users’ (NBU) primary leisure destination for some time to come, and it is now up to media and entertainment businesses to leverage the opportunity on offer here.