Indian consumertech industry to reach $300 billion by 2027: Report

The Indian consumer technology (consumertech) industry is set to rise as the total addressable market will reach $300 billion by 2027, growing at a compound annual growth rate (CAGR) of 25 per cent, according to a report by Chiratae Ventures, in collaboration with 1Lattice and powered by Google.
 
The report, ‘Cracking the Code: Unveiling India’s Consumer Landscape’, the first instalment of a three-part annual report series, provides in-depth analyses of gaming, e-commerce, financial technology (fintech), entertainment, and health care sectors.
 
The unlocking of India’s consumer potential is driven by digital public infrastructure (DPI) and population-scale solutions. Over 500 million Indians now seek entertainment and gaming services daily.
   

Over 1.2 billion people in India need good health care. About 1.1 billion people have a bank account and seek to invest in financial services.
 
 Around 880 million people in India aspire to spend on fashion and apparel, and 220 million people aspire to spend on on-demand services. This has resulted in an increased focus on personalisation, a rise in experiential retail, and a growing influence of social media.
 
Supported by an increase in disposable income and significant digital adoption, they provided additional tailwinds to solve the above needs.
 
 “It focuses on pillars that will help an entrepreneur who’s starting up today succeed in this particular space. They revolve around building population-scale solutions and services, especially in today’s world, which is backed by DPI. This also includes your ability to access and reach almost 350 million people and probably another 700 million people in three to four years through the public infrastructure as it extends itself,” said Anoop N Menon, principal-investments, Chiratae Ventures, in an interview.
 
“We also do believe there will be opportunities in e-commerce enablers. There is still a large opportunity to cater to a Tier-II and Tier-III audience. There is a clear dearth of options for that audience, and they are willing to pay in those markets,” added Menon.
 
Emerging trends such as social commerce, immersive shopping experiences, and mobile gaming are reshaping the global consumer landscape, impacting regions including the US, Europe, Asia-Pacific, and West Asia/North Africa.
 
Not to be left behind, the Indian consumertech sector is experiencing the swift rise of over-the-top services on the subscription side. There is also an increasing involvement of women in gaming, commerce, and social media, and a notable rise in green mobility solutions such as electric vehicle sales.
 
The current total addressable market of the consumertech industry is valued at $100 billion, with the dominant sector being mobility (30 per cent share of the market) which includes ride-hailing applications (apps), automobile marketplace, and online car rental market followed by entertainment (25 per cent) which includes print, digital, and television media.
 
By 2027, fashion is expected to overtake entertainment as the second leading sector with apparel and accessories, beauty and personal care, footwear, jewellery, and watches.
 
“We have to date invested about $450 million into the sector. Key winners backed by Chiratae include Flipkart, Myntra, Cult.fit, FirstCry, Lenskart, GlobalBees, PolicyBazaar, and Curefoods,” said Sudhir Sethi, founder and chairman of Chiratae Ventures.
 
“We believe that the consumertech sector is both a horizontal and a vertical play with winners at the intersections of horizontal technology disruption and vertical domains such as health, finance, education, and agriculture,” he added.
 
Roma Datta Chobey, managing director, digital-first businesses, Google India, consumers are looking for personalised digital experiences. “These consumer expectations extend to Tier-II+ consumers who have embraced technology,” said Chobey, adding, “They have an even greater openness to experimentation with new brands and products, and the willingness to spend on personalisation and premiumisation.”
 
According to the survey findings, consumers, on average, dedicate over four hours daily to their smartphones. The fintech apps dominate usage, with 77 per cent of respondents leveraging it. Following closely, entertainment apps capture a significant share at 70 per cent. Here on-demand services are perceived as essential expenses in the daily lives of about 70 per cent of consumers.
 
Gaming, e-commerce, and health technology are also gaining traction among Indian digital consumers. Online and professional gaming are on the rise in India, with an increasing number of active female gamers (60 per cent).
 
The growth of the e-commerce sector is seen due to the shift from offline to online channels for apparel and groceries because of the discounts and offers available. Lastly, health tech is growing at a CAGR of 40 per cent, with online pharmacy being the most used platform in metro and Tier-I cities.
 
“India’s consumertech isn’t a fleeting but a substantial force,” said Roma Dixit, director, financial services, 1Lattice.
 
“This growth potential is underscored by the ambitions of Indian home-grown startups, driven by robust revenue growth and eyeing global expansion, fuelled by an ever-growing digital native user base,” she added.