Net users cross 100m, to boost e-commerce

By S Shyamala Nov 07 2011 , Chennai

India has reached a milestone in tele­communications. The country has topped the 100-million in the number of internet users. According to an I-Cube report jointly released by the Internet and Mobile Association of India (IAMAI) and IMRB on Monday, the landmark was reached in September. If that be so, India now has the third biggest population of internet users.

Yet, in internet use India is way behind its own multitude of mobile subscribers. At 100 million, the internet population is just 11 per cent of its telecom subscribers numbering nearly 900 million. Among telecom companies, Airtel, Vodafone, Reliance Communications and Idea each already have 100 million or more phone sub­scri­bers.

Though a mi­lestone, India’s internet population is just a fifth of China’s 500 million. China has been rapidly adding to this population — in December it had 457 million. Yet, India’s is no mean achievement; only a handful of countries can boast of such numbers. The size has got e-commerce players excited.

Google India’s MD and vice-president of sales and operations, Rajan Anandan, told Financial Chronicle: “Hundred million internet users represent a tremendous market opportunity for companies like us. This will also create a great internet eco-system in India.”

Assocham recently estimated that the size of Indian e-commerce market is expected to touch Rs 47,000 crore by 2011.

Sachin Bansal, Flipkart CEO and co-founder, said the 100-million strong internet population validated his belief in India’s e-commerce potential. It would become one of the largest e-commerce-led economies in the world. “We will continue to aggressively invest in this space and contribute in every way we can,” said Bansal, who quit a cushy job at Amazon.com India to start India’s largest online shopping arcade.

The I-Cube report projects the number to rise to 121 million by December. Of them 97 million will be active internet users who access the web at least once a month. And nearly 92 million of them would be in urban India. Not bad, considering that the technologically far more advanced Japan has an internet population of 99 million.

K Vaitheeswaran, foun­der and CEO of Indiaplaza, said that though e-commerce in India had been in existence for some time, it was now that the full potential was being understood. “Over the past year or two real growth started to happen here. In the next few years the internet user base will zoom to between 350 million and 400 million. That makes it quite a large and attractive market for everybody, as there is a piece for everybody to nibble at,” he said.

As per latest Trai data, 12.6 million of India’s net users (as of August 31) connect to the web through broadband (at speeds greater than 256 kbps). Subho Ray, president of IAMAI, said in a statement.

“As before, common access points such as cyber cafes continue to play an important role but their role has suffered a big shrinkage. At 37 per cent access from home “is still not dominant”, said Ray. According to the World Bank’s development indicator, only 5.3 per cent of Indians had internet access in 2009, up from 0.5 per cent in 2000.

(With inputs from S Ronendra Singh and Kumar Shankar Roy in New Delhi)