Rural India will now fuel the growth of internet in the country, which will account for nearly half of the country’s total Internet population by 2020. According to a report by Boston Consulting Group, increased access to the Internet will also influence rural shopping patterns, replicating the trend seen in urban India.
The reports states that by 2020, about 315 million Indians living in rural areas will be connected to the Internet, compared to around 120 million at present. That’s about 36 percent of the country’s total online population.
According to a study by the Boston Consulting Group (BCG) titled ‘The Rising Connected Consumer in Rural India’, At present, rural Indians use the Internet mainly for social network websites (around 70 percent of the Internet users living in rural areas) such as Facebook, and for emailing. About 15 percent of rural consumers use the Internet to research products, purchase a product, or register satisfaction or dissatisfaction with a product after the purchase is made, compared with 30 percent of urban consumers.
“The amount of actual online commerce in rural India is still small, but it is picking up. From 2015 to 2016, the penetration of online purchasing in these areas doubled from 4 percent to 8 percent,” noted the study.
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Rural consumers hesitate to buy online because of delivery and returns issues, and a widespread perception that e-commerce is neither safe nor reliable, the BCG study said. “Almost 40 percent of rural consumers feel that their personal information is at risk, while 30 percent believe that products sold online are of poor quality and 25 percent find e-commerce sites and apps hard to use,” it added.
“Companies looking to tap the rural market should first evaluate which touch points in their targeted customers’ purchase journeys are most affected by digital and to what extent… The economics of the Internet give marketers an opportunity to re-evaluate the business case for reaching rural markets,” added the BCG study.
The report is based on surveys conducted by BCG’s Center for Customer Insight (CCI) of approximately 4,000 rural consumers in 27 villages in 14 states in 2015 and 2016. It profiles five different segments of Internet users in rural India – mature, ambitious, late adopters, next wave users and ‘dark on the Internet’.