Amidst the economic slowdown, the digital industry continues to gain momentum. Sandeep Balani of Outbrain maps out how…
The last three quarters have seen a decline in the overall GDP growth rate in India. Auto-sales hasn’t been spared by this trend as well, with car sales statistics taking a 20% hit with each preceding year. Economic slowdown has been real.
The signs are all indicating an adverse economic growth shift in just about all industries and economic sectors across the board; despite these negative growth indicators in most sectors, the digital industry seems to be on a trajectory of its own.
Instead of its growth rate plummeting like the rest of the industries, it seems to be gaining momentum in these tough times.
The irregularity of the digital industry’s growth rate is however not at all a myth. It has always been a unique sector whose performance is not necessarily affected by regular economic factors. Let’s just quickly examine some of the factors that are keeping it alive and thriving despite the overall decline in most sectors.
1. Continued growth in Smartphone Sales:
The demand for Smartphones in India doesn’t seem to be declining in the least. Consumers may have cut down on the purchase automotive or other investments but their spending on smartphones has actually increased during the same period. Impressive growth in sales of 14.8% quarter-on-quarter has been observed just this year. During this past festival season, Samsung experienced a 5-fold increase in sales compared to the previous one. One Plus also experienced the same with recorded sales well over Rs. 700 crores according to amazon.in.
2. Digital consumption is at an all-time high:
According to PwC, the video streaming industry is expected to grow at a CAGR rate of 21.82% to reach Rs. 11,977 crore by 2023. Platforms like Netflix have become increasingly popular with consumers across the globe, leading the pack with the highest average watch time of more than 120 minutes in 2018. Other similar services like Amazon prime observed a double increase in subscribers in just 18 months while Hotstar recorded a whopping 150 million active users and over 350 million downloads by the end of the year 2018. OTT platforms are also scaling up and getting a significant chunk of the timeshare of audiences. On average, time spent on digital video platform by consumers has increased drastically to about 1 hour 29 minutes.
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3. Jio Fiber launch’s Impact on the usage of Digital Platforms
RIL’s Jio Fibre launch introduced eye-catching offers which will take over most of the offline operators. The firm has invested Rs 3.5 trillion for digital infrastructure and fiber network. The services on offer include premium video streaming and instant access to movie releases on your device. The fiber launch guarantees a flawless streaming experience with double the normal speeds as before.
4. Affordable and Static Data Rates
The introduction of Jio in 2016 has afforded Indian consumers a sweet deal as far as data rates are concerned. The country currently enjoys the cheapest data prices on the planet and the trend is not set to change any time soon due to high competition levels among service providers. This stiff competition is largely benefitting consumers as each provider seeks to gin mileage over the other with attractive tariffs.
5. The Automation Process Continues to Empower Offline Industries to Come Online
IRCTC was one of the first websites to automate ticketing systems in India and now their IPO has been subscribed 112 times already. It is considered to be the most transacted website in the entire Asia Pacific region. With President Modi’s government digital manifesto program, more can be expected on the horizon as far as online Government services are concerned. These efforts are bound to improve the necessary infrastructure and means of connectivity for the ease of doing business.
This piece is authored by Sandeep Balani, Head of India at Outbrain.