Rural consumers in India coming online will drive worldwide e-commerce over the next five years, according to the Boston Consulting Group. The report is a follow up to recent research from BCG and Google that predicts the digital payments industry in India will grow to $500 billion by 2020. E-commerce in the rural areas will contribute mightily to that growth, the company said, as the number of Internet-connected consumers grows from 120 million in 2015 to nearly 315 million in 2020. The base of e-commerce consumption is still quite small in India overall and, the report notes, especially so in rural areas. But, the potential is staggering.
“Understanding the changes taking place in Internet adoption and use in India and how these shifts will affect existing markets and ways of communicating—and create entirely new ones—is essential for anyone doing business in the world’s second-most-populous country, which is also soon to be the world’s second-largest nation of connected consumers,” wrote the report’s authors, BCG Managing Director Nimisha Jain and Principal Kanika Sanghi. “The amount of actual online commerce in rural India is still small, but it is picking up. From 2015 to 2016, the penetration of online purchasing in these areas doubled from 4 percent to 8 percent.”