India Charted: Exploring the Massive Internet Investment Opportunity in India - Part IV

Chart#1: India Smartphone Penetration

India's smartphone penetration today is roughly where China and the USA were over a decade ago.

When India catches up, it will result in over 330 million new smartphone users in one country... the population of the U.S. today.

Millions of new smartphone users will serve as the backbone of growth for the Indian internet economy.

Source: Newzoo, EMQQ Global Analysis

Chart#2: Total Internet Market Cap ($Bn)

The total market capitalization of the Chinese internet sector is 11x larger than India's. Meanwhile India's e-commerce penetration is only 1/5th of China's. Smartphone penetration of roughly 50% in India versus 70% for China. All the right ingredients for tremendous growth.

Source: Bloomberg, EMQQ Analysis

Chart#3: Countries With the Most Unicorns

India is home to more than 100 unicorns. Only China and the USA have more. These young innovative companies will drive the future growth of the Indian internet eonomu. Over the next 5 years, more than 30 new age tech companies in India could join the public equity markets, helpen broaden and enrich the space.

Source: Crunchbase, Inc42

Chart #4: Internet Third Wave

The US and China were key drivers of the first two Internet waves. Both countries produced many of the tech behemoths we know very well today.

India is now the Internet Third Wave. What factors are driving this?

1. Surging smartphone adoption. Penetration less than 50%
2. Declining smartphone prices.
3. Amongst the lowest mobile data costs in the world. Just $0.16 per 1GB.
4. Rapidly growing e-commerce market. Penetration of only 5-6%.
5. Burgeoning startup ecosystem. India home to more than 100 unicorns.
6. One of the most innovative digital payment ecosystems in the world via “UPI.”
7. Government aggressively pushing digitalization via the "India Stack."

Source: EMQQ Global Analysis

Chart#5: Regular Flyers

There’s a huge opportunity for Indian companies operating in the online travel agency (OTA) space.

That's India for you. Lots of categories with low penetration, runway for growth and tremendous opportunities for digitalization.

Source: Statista, New York Times

Chart#6: Smartphone Penetration by Country

Smartphone penetration in India is still very low compared to global standards.

As the country’s penetration increases, hundreds of millions of Indians will enter the digital age for the first time, providing a long-term bump to the local internet economy.

Source: NewZoo

Source:
¹ - India likely to have 900 million active internet users by 2025: Report

About the Author

Akeem Bailey is the Director of Research for EMQQ Global. Previously, Akeem worked at Rondure Global Advisors, where he helped oversee research and due diligence on emerging market equities and at Arisaig Partners, a Singapore-based hedge fund focused exclusively on consumer and internet companies in emerging markets. Akeem began his career living and working in India as a strategy consultant for the Mahindra Group. Akeem holds a B.A. in International Relations from the University of Pennsylvania.

Disclaimer

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.