Daily Current Affairs – 18th August, 2016

Daily Current Affairs – 18th August, 2016

By 2020- 730 million internet users in India

What?

  • A report ‘The Future of internet in India’ released by Nasscom (National Association of Software & Services Companies) in partnership with Akamai Technologies Inc., a leader in content delivery network services.
  • Aim: to understand the impact of the internet on the way people live, learn, work, shop and connect
  • Focus: on the future trends that will change the landscape of India by 2020
  • Findings: with 75% of new user growth expected to come from rural areas, India is expected to have 730 million internet users by 2020
  • India’s internet consumption has already exceeded US to become No. 2 globally. China leads
  • Globally, the internet users is expected to touch 4,170 million by 2020

Internet and India

  • Internet has successfully created a strong ecosystem for new businesses to tap into growing markets and create solutions to address their demands
  • As per the report, the rapid growth of the internet has impacted the key verticals that include e-commerce, travel and hospitality, financial technology and media

E-commerce market

  • The overall e-commerce market in India was valued $17 billion in FY 2016
  • By 2020, India will have an estimated 702 million smartphones in use
  • 70% of the total online shopping will be preferred to be done by mobile phones
  • With 35% contribution to e-commerce gross merchandise value, fashion and lifestyle segment will be the largest e-commerce shopping category.
  • At present, the e-commerce industry is dominated by consumer electronics segment
  • 39% contribution to e-commerce gross merchandise value is non-travel related section
  • E-tailing is growing 93% every year. The top three e-tailing giants- Flipkart, Snapdeal and Amazon- account for over 80% of the segment in 2015.
  • By 2020, e-commerce is likely to double to $34 billion, mainly driven by the growth in the online retail space

 

Travel

  • Travel across India through online booking will increase
  • There is a huge data of user-generated content online (views on social media, reviews on websites, etc.) which is driving aspirational travel. These have tipped over the scales in favour of trips that were once only contemplated but never undertaken
  • The major share of increase in online travel is also because of competitive pricing offered by IRCTC, online travel agents and aggregators
  • India Brand Equity Foundation (IBEF)
    • By 2020, the total addressable travel market in India is estimated to reach $40 billion and online travel is estimated to account for 40- 50% of all travel related transactions
    • The tourism and hospitality sector is among the top 15 sectors in India to attract the highest foreign direct investment (FDI)
    • DIPP: During April 2000-September 2015, the hotel and tourism sector attracted around $8.48 billion in FDI
  • What drives the growth is demand being generated by younger population which is joining internet
  • KPMG:
    • Government initiatives, diverse product offerings, the growing economy, increasing disposable income levels and marketing initiatives are key in shaping Indian tourism sector
    • Also, there is an increase in number of women and senior citizen travellers, multiple short trips and weekend holidays, and introduction of innovative tourism concepts and customised tour packages.

Over-the-top (OTT)

  • It is the new medium of personal entertainment
  • OTT= delivery of entertainment—including TV programmes and movies—via the internet, without having to subscribe to a cable or satellite TV provider
  • It is given a boost by increased usage of smart phones, reduced data prices and better connectivity
  • It has the potential to merge the worlds of television and digital media once content providers figure out what their audiences want to watch and distributors figure out how best to deliver it
  • There will be various ways such as subscriptions, transactions, or free, but ad-supported, platforms
  • As per a report, India had 12 million active OTT video subscribers in 2014
  • With it, there is social media with VOIP-based OTT players like Skype, WhatsApp, Viber, and SnapChat. It is changing the revenue game in telecom.
  • Messaging has seen a shift from traditional SMS to OTT messaging services
  • Messaging platforms are evolving into destination-content portals

Financial technology

  • The financial services is being disrupted by the Financial Technology (Fintech)
  • Fintech market software is estimated to be at $1.2 billion (13-15%) of total market
  • The remaining 87% focus is primarily in payments and core banking services
  • The Fintech market is expected to grow 1.7 times between 2015 and 2020
  • Cash on delivery the way in online financial market, but payments through mobile banking and e-wallets is also on the rise
  • Government’s Jan Dhan Yojana will help Fintech companies become data-rich, strengthening the unique national identity system (Aadhaar) and the omnipresence of mobile phones in India

Last mile connectivity

  • This is the most important feature of connecting new users to mainstream world
  • The next generation of internet users (rural, mobile-centric, and local-language consumers) have to be brought online by multiple stakeholders
  • The Digital India programme will lead the way by deploying National Optical Fibre Network (NOFN) to provide broadband connectivity to cover 250,000 gram panchayats
  • However, to connect the end user with broadband will be the responsibility of telecom and technology companies
  • The NOFN will have to be linked with telecom towers to deliver wireless broadband services to rural households but setting up telecom infrastructure in remote areas is a challenge
  • To help out, companies such as Google, Facebook and Microsoft are coming up with unconventional methods
  • Google uses helium balloons to relay signals to remote areas, Facebook plans to use drones, and Microsoft is eyeing the unused spectrum in frequencies used by TV channels to carry data.
  • These products are expected to start in 2016-17. The governments and telecom companies should partner with internet-based technology giants to drive up the connectivity.

Connecting the dots:

  1. Internet is silently replacing the conventional methods of interaction. Critically analyse
  2. How is increased number of internet users expected to benefit India? Are there any drawbacks? Evaluate

Uniting the divided world order

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