Considered to be technologically underequipped barely two decades back, India’s spectacular march towards digitisation is today well-documented and widely known. Several large-scale government initiatives such as the Digital India initiative are also abetting India’s technological transformation and digitally empowering its citizens across socio-economic and geographical barriers to fulfil the vision of a tech-driven nation. In such a scenario, with the focus on enabling digital connectivity and establishing robust networking infrastructure, what if someone said that the key to India’s digital-savvy future lies in the offline mobile phone market?

The Online/Offline Conundrum: Why Ignoring the Offline Mobile Phone Market Is Not an Option

Strange as it may sound, the statement does hold true, as a quick look at industry statistics reveals. Despite its rapid growth over the past couple of years, the online mobile phone market in India still has a long way to go before it can catch up with its offline counterpart in terms of market penetration, consumer mindshare, and outreach. According to industry estimates, online sales barely account for 15-18 percent of the total mobile phone business and are largely restricted to urban and tier-1 geographies – markets which are already reaching saturation with respect to mobile phones. On the other hand, the offline channel comprises nearly 75 percent of the overall Indian mobile phone market.

The Offline to Online approach: How strengthening Offline Channels Will Promote Digital Adoption

The disproportionate internet penetration in the country is quite significant, where digital connectivity is concerned. Despite being

home to the second largest internet user base in the world, the internet penetration in India stands at barely 34 percent, leaving nearly 865 million people – almost 65 percent of the total population – untouched by any form of online connectivity. Most of these untapped individuals belong to tier-2/tier-3 cities and semi-urban and rural geographies, where brick-and-mortar retailers and offline channel partners hold greater sway. As a result, nearly 80 percent of the current demand for mobile devices in India is served directly by the offline retail base, with traditional channels contributing an estimated 65 percent to the country’s mobile business. Mobile phones have been playing a vital role in enabling widespread adoption of Information and Communications Technology (ICT) in India. Out of an estimated 462 million internet users currently calling the country home, more than 371 million people are expected to be connected through mobile devices.

Aided by the availability of budget mobile devices with internet connectivity, the country has leapfrogged the personal computer wave to jump directly onto the mobile-first bandwagon. Leveraging mobile devices to enable digital connectivity can also bring down the heavy infrastructural costs that would otherwise be necessitated to develop a country-wide interconnected framework. The low costs of smartphones and internet-enabled feature phones, as well as low data tariffs offered by mobile network operators, allow all key stakeholders, including service providers, the Government, regulatory bodies, and the end-consumer to mitigate the financial burden while ensuring seamless interconnectivity on a pan-India level. This underlines the critical role mobile phones have been playing, and will continue to play, in India’s thrust towards digitisation.

Aided by the availability of budget mobile devices with internet connectivity, the country has leapfrogged the personal computer wave to jump directly onto the mobile-first bandwagon

The Rise of Digital India: The Way Forward

India has established its position as the world’s fastest growing smartphone market, and is also amongst the fastest growing large economies. The country’s position as an increasingly digitally-driven nation however rests squarely on mobile internet connectivity. Offline channels have been integral in extending the benefit of the mobile revolution to the masses. With the assurance of greater market penetration and consumer adoption, the offline medium will continue to play a key role in making the vision of a truly digitally-savvy, interconnected India a tangible reality.