India’s Internet market

New Delhi: The number of Internet users in India has shot up from 50 million in 2007 to 100 million in 2010 and more than 300 million in 2014, making India the world’s second-largest Internet market.

Further, the size of the Indian Internet market in terms of gross merchandise value is likely to rise from $11 billion in 2013 to $137 billion by 2020, according to a new Morgan Stanley research report. The market value of the industry could also touch $160-200 billion, the report released on 2 February said.

Morgan Stanley analysts believe that given India’s strong entrepreneurial talent and opportunities thrown up by the Internet and the Internet of Things, the country, like the US, provides a wide assortment of companies that can transform the way more than one billion people live their daily lives.

The $11 billion Indian Internet market in 2013 was dominated by travel ($8 billion) followed by e-commerce (around $3 billion) and classifieds/online advertising ($800 million), the report noted. According to the report, the total Internet market can grow to $137 billion by 2020, a compound annual growth rate (CAGR) of 43% and representing 7% of current gross domestic product (from 0.6% now).

E-commerce is forecast to form the largest part of the overall Internet market ($102 billion, 66% CAGR) followed by travel ($28 billion, 20% CAGR) and classifieds/online advertising ($7 billion, 37% CAGR).

In the US (excluding Google, Facebook and Twitter) and China, e-commerce companies account for more than 50% of Internet market capitalization.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.