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Driven by vernacular content, rural India sees 45% growth in internet users: Report

Homegrown and global tech companies expect the next half a billion users from rural India to drive their growth.

India is slowly becoming more homogeneous in terms of the spread of internet users which was earlier concentrated in urban areas. Homegrown and global tech companies expect internet users from rural India to lead their next phase of growth.

According to an annual internet usage tracking report by consulting firm Kantar, internet usage in the world’s second most populous country is now being driven by rural India. The report said rural India has seen a 45% growth in the monthly active internet users in 2019. A user qualifies as a monthly active user if she comes online once a month.

The report, based on a survey of about 75,000 respondents across 390 cities and about 1,300 villages, said there are 264 million internet users in rural India currently, and the number is projected to reach 304 million by the end of this year.

Of 1.3 billion Indians, over 850 million people–almost two-third of the population–live in rural areas. Consumer tech giants like Amazon, Flipkart, Netflix, Disney-owned Hotstar, ByteDance, and Tencent, among others, have been eyeing the next half a billion users living beyond larger cities to drive their growth.

The report notes that the local language content, primarily videos, on the top of the affordable devices and data plans has played a crucial role in driving internet adoption by the masses. “The rural population has finally crossed the point of a chasm by embracing the internet in a big way, resulting in a 2.5X growth in penetration in the last four years,” the report said.

Overall, the total number of monthly active internet users in the country is estimated to be 574 million in 2019, up 24% from a year before, indicating an overall penetration of 41%. Kantar projects the monthly active internet user base would grow by 11% to reach 639 million in 2020.

The report said all monthly active internet users use a mobile phone as one of the devices to access the internet, and that about 84% of them access the internet for entertainment purposes. Probably driven by original contents and Cricket (both IPL and Cricket world cup streamed on OTT platforms), 2019 witnessed a surge in OTT (over-the-top services), both audio and video, the report noted.

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The availability of vernacular content is also driving the surge in daily usage. Kantar observed a 60% growth in the daily internet users in the last year and almost nine out of 10 active internet users were accessing the internet daily for entertainment and communication needs.

“The convenience of content availability across devices and on the go low-cost internet service resulted in significant growth in the entertainment consumption in the last year. This is expected to continue in 2020 too, especially in view of the lockdown,” it said.

The lockdown that started March 25 to prevent the spread of the novel coronavirus, and is extended, with some relaxations, till May 17, has increased the internet usage across the country.

“The lockdown and social distancing have pushed users to experiment with various digital solutions, some of them by desire while others due to compulsion,” said Biswapriya Bhattacharjee, vice president, Insights Division, Kantar.

“The comfort of accessing services and availing their benefits from the comfort of home in the times of social distancing will continue to push users to adopt and use multiple internet services. Given this, the year 2020 is likely to see a tectonic shift in both internet adoption and frequency of usage,” he said.

Meanwhile, video, voice, and vernacular will drive higher engagement and frequency of usage, which will help the users mature in their internet journey, the report said.

“At 38%, the school-going children segment in the age group of 15 years or below has shown a promising growth in internet usage,” the report said. “Access to information and education, social media, gaming and entertainment, especially, sports, are driving the adoption.”

It added that children and housewives will be the new internet adopters in the next year or two.

“Most of these users already have internet at home, and it will be more about breaking the mindset barriers to access the web. With the availability of curated content for these groups, the adoption will be considerably faster amongst these segments,” it noted.

According to Puneet Avasthi, senior director, Insights Division, Kantar, “India has achieved strong growth with the addition of over 112 million users last year. The new decade is expected to witness the next wave of Digital India aided by the recent COVID-19 pandemic that has catalyzed the speed at which the already connected consumer is getting further connected with devices, payments, e-medicine, among others.”