Half of India's internet users will be rural, 40% will be women by 2020

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According to the report by Boston Consulting Group ( BCG), half of all internet users will be rural, 40 percent will be women, and 33 percent will be 35 or older.

Half of India's internet users will be rural, 40% will be women

The report said that internet penetration has been, and continues to be, mobile first and four out of five users go online with mobile devices.

Today, these devices are a mix of smartphones (with 3G or better connections) and feature phones with primarily 2G connections, but the trend is toward faster connections and more capable devices.

To get a sense of the speed of this shift, consider this: it took nearly eight years for India's mobile market to reach 250 million 3G connections, but the country's Reliance Jio 4G network added 100 million connections in just seven months.

BCG said that "From 2014 through 2016, the number of online buyers rose sevenfold, to between 80 million and 90 million. Digitally influenced spending, currently, $45 billion to $50 billion a year, is projected to increase more than tenfold, to between $500 billion and $550 billion-and to account for 30% to 35% of all retail sales-by 2025."

In our view, however, many companies are basing their plans and investments on the expectation that the Indian digital marketplace will evolve as it did in developed markets. We believe this underestimates the digital potential in India; companies may actually be under-investing for the long term," authors Abheek Singhi and Parul Bajaj said.

Meanwhile, the report said that India will have more than 850 million online users by 2025 more than the combined populations of the G7 countries.

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