Consumer Demography

Let me start with some key facts on the consumer demography in India.

Online user base touching 50 million in India, 1 in 5 users coming from rural areas.

The total base of internet users in India stands at 49.4 million currently (late 2008).

82% of online Indians come from the urban areas and 18% from the rural areas. At these levels, the penetration of internet stands at 4.5% of the total population of India. The penetration levels within the urban and rural population stands at 12% and 1.1% respectively. Compared to 2007, in 2008, the penetration in urban areas has gone up noticeably, from 9% to 12%.

Within the total base of online Indians, 71% are ‘regular’ internet users (defined as those internet users who use the internet at least once a month). The balance 14.31 million online Indians, or 29% of them are ‘occasional’ users of the net (defined as those internet users who use the internet less than once a month).Within the base of 40.34 million urban online Indians, 30.03 million, or 74% of them are ‘regular’ internet users. In contrast, the number of ‘regular’ internet users in rural India stands at 5.06 million, implying that only 56% of rural online Indians qualify as ‘regular’ net users. From a practical point of view, 28.2 million internet users (57% of online Indians) are on the net daily.

A year of ‘healthy’ growth in urban user base.

The overall internet using population in urban India grew by 33% during April 2007 – April 2008 (as compared to 28% in the previous year). More importantly, the added new users are as many ‘regular’ internet users as the ‘occasional’ ones (4.86 million & 5.16 million respectively). The growth percentage and number of urban users from April 2008 is unavailable at this point.

The bulk of regular internet users come from the non-metro towns.

After inclusion of the ‘rural’ internet users, only 30% of all regular internet users came from the top 8 metro cities. The tier 3 & 4 towns, non-metros and rural areas account for the bulk 52% of the regular online Indian population. Yet, almost 70% of the regular internet users continue to constitute what is perceived as the ‘urban consuming class’ (SEC ‘A’, ‘B’ and ‘C’).In terms of socio-economic classification (SEC), 56% of regular internet users came from SEC ‘A’ and ‘B’ groups in the year 2007, whereas in 2008 their share went down to 50%. SEC ‘C’ accounts for 19%, while SEC ‘D’ and ‘E’ put together account for 16%. The balance 15% come from the rural SEC groups - with R1, R2 and R3 combine accounting for 10% and R4 and R5 for approx 5%. (R1, R2, R3, R4 and R5 are rural classifications)

Internet user base is increasingly skewing towards the ‘younger’ India.

The proportion of ‘Under 25’ years age group net users have grown into the ‘majority’ now, accounting for 52% of the total internet user base in Indian. At 44% the 19-24 year age band emerges as the ‘single largest’ age group of regular internet users in the year 2008.

Social interactivity and entertainment related content are the most popular online

On an average an online Indian undertakes over 15 activities online. Communication and social interactivity activities (emailing, instant messaging/chatting, dating/friendship and matrimonial search) and entertainment activities (news, sports, movies/music, and cricket) stand out as the most popular online activities.

The emergence of the ‘local language website’ users

Almost 1 in 3 online Indians (34%) is already using local language websites (up from just 12% in 2007). Further, the proportion of internet users who generally prefer to read in local language has also gone up from 59% in 2007 to 72% in the year 2008.