What comes to your mind when you think of the digital consumer — a 25-year-old, educated, urban professional? That may be true now, but fast-forward to 2020, and the next 350-400 million consumers would include older age groups (those over 25 will be 65% in 2020 vs. 46% in 2015), Tier 4/rural consumers (increase of 40% over 2015 base by 2020) and women (1.5 men for every woman online in 2020 vs. 2.5 in 2015).
It’s unlikely that today’s digital offerings will work for this next wave of consumers. Consumer preferences as well as underlying infrastructure are different for this base and hence to win them, digital players will need to democratise their offerings.
Half of the internet population in India is rural — interestingly, around 60% of these consumers do not have a smartphone and only 10% have a PC. Rural locations primarily have 2G access with download ranging from 144 to 256 Kbps. Even if the highest speed of 256 Kbps were available, it would take nearly six minutes to buffer a three-minute movie trailer on YouTube of average video quality — a waiting time much longer than the content duration itself.
The next wave of digital consumers will also become more vernacular, with more than half seeking vernacular content). YouTube and Google maps will struggle with slow internet infrastructure; social platforms like Facebook and Twitter will not naturally gain traction from vernacular users.
Digital adoption is fuelled by targeted applications. A good example is weather monitoring applications that have a significant uptake in the United States but have not seen much traction in India, given lower variation of temperatures on a day-to-day basis.
On the other hand, file sharing applications are popular in India. For this next wave of digital consumers, the use-cases will need to be related to education, healthcare, jobs and financial services.
In India, digital can help unlock the three-fold challenge in the rural market — reach, affordability and efficacy. Gramvaani reports that in rural India, where the number of primary health care centers is limited, 8% of the centres do not have doctors or medical staff, 39% do not have lab technicians and 18% PHCs do not even have a pharmacist. Around 16% of all villages do not have primary schooling facilities and 17% have just one teacher. Most Indian startups in healthcare, education, jobs and financial services space are in a nascent stage and are primarily focused on the urban consumer.
Examples of focused offerings for rural India are few and far between. The challenge for start-ups has been in creating scale and monetisation. Scale would require working closely with the government given its significant reach.
The government would need to support this digital transformation journey by playing an institutional role in strengthening infrastructure, providing financial support and fuelling offline-online interaction. Then and only then, can we democratise the digital landscape and truly exploit the full potential of ‘Digital India’.
Shweta Bajpai is principal and Sandeep Dalmia is project leader at The Boston Consulting Group
The views expressed are personal