The Indian economy is fueled by private consumption and investors are looking to the country’s digitally-connected population to build a source of income. Mumbai resident Shivam Vahia, 24, is representative of this growing trend, tapping his phone to make nearly all of his basic needs purchases. Indians have some of the cheapest mobile data rates in the world and almost 700 million smartphone users, consuming an average of almost 17 GB of data per day. This type of intense digital engagement has opened the door for global companies, digital platforms, and private investors looking to tap into India’s increasingly affluent and aspirational population.
Companies like Zomato, Nykaa, Delhivery, and Paytm have made their initial public offerings to attract investors. Bain & Co estimates that India’s online shopping market hit a whopping $50 billion in 2022, making India’s online shoppers the third biggest behind China and the United States. This energy has pushed India to exceed the World Bank’s GDP per capita threshold and indicates a sharp trajectory into the future, though weak job growth and income inequalities are risks to be considered.
Traditional businesses like clothing, food items and healthcare products have low per capita usage, presenting a unique opportunity for investors. This means that despite the current high valuations of publicly-traded companies, there is still long-term potential in the Indian market. Making money in India may require investors to be patient, but the growth potential for products and services across the country could make the wait worthwhile.
