Vernacular
is NOW, not
the future
A $300 Bn Opportunity Today
Perspective on Vernacular Advertising Opportunities July, 2019

Vernacular
is NOW, not
the future
A $300 Bn Opportunity Today

1. Preface 4
2. Glossary 5
3. Executive Summary 8
4.Agenda 10
• Monetizable Internet Users 10
• Monetizable Vernacular Users 19
• Opportunity for new-age full stack content players in 2023 29
LOREM IPSUM
LOREM IP
3
Vernacular is NOW, not the future

Preface
As the data prices have decreased post Jio, the growth of
internet users in India has received global attention.
While the profile of an internet user 5 years ago was fairly
uniform (English speaking, Metro or Tier-1 city, Male);
today, it is a lot more heterogenous. The rise of multiple
social media, content and OTT platforms to cater to this
diverse user base is a testament to this.
Today’s advertiser has to navigate through this digital
maze to reach a “monetizable user”. While, in the past,
advertisers have stuck to English users as a proxy; it is
no longer feasible as this user base is growing much
slower than the vernacular user base. There has been
a larger tendency to consider vernacular user base as
non-monetizable but it is increasingly becoming evident
that not only these users have a spend capacity, they are
willing to engage on digital media, given the right tools.
Today, the advertisers are spending more than 90% of
digital ad dollars on English ads largely because there is a
lack of understanding of this user base.
Through this report, RedSeer has tried to break some
long-standing myths as well as create a greater
understanding of the opportunity that the vernacular user
base presents for the advertisers.
Anil Kumar
Founder and CEO,
RedSeer Consulting
We are the largest home grown advisory company in India
An Advisory firm with strong credentials
Strongverticalfocusacross
Healthcare,
Educationand
Retail-CPG
Leadershippositionin
Indian
e-commerce
industry
Haveadvisedfundson
$23Bn+
ofinvestmentdecisions
viaourCommercialDue
Diligence
90 +
ofIndianOnlineGMVis
ourclientele
Clients200+
50+Fundsand
150+Corporates
Engagements
2000+
500+withFunds
Employees 150+
Employees150+
Across5locations
(BangaloreIMumbaiINew
DelhiIDubaiINew-York)
4
Vernacular is NOW, not the future

Glossary
5
Vernacular is NOW, not the future

City Class Definition
Tier-1 Metros (Mumbai, Delhi-NCR, Chennai, Kolkata, Bangalore, Pune and Hyderabad) and
Cities with population more than 10 Lakh (1 million)
Tier 2+ & Rural All of the following categories:
Tier-2 • Cities with population between 5-10 Lakh (0.5-1 million)
Tier-3 • Cities with population between 2-5 Lakh (0.2-0.5 million)
Tier-4 • Cities with population 1-2 Lakh (0.1-0.2 million)
Rest of Urban • Other cities classified as Urban as per Census 2011
Rural • Cities/Towns/Villages classified as Rural as per Census 2011
Economic Class Definition
NCCS A No. of consumer durables is 6/7/8+ and education of CWE is at least College (non-
grad), SSC/HSC, no formal schooling beyond 4 years respectively
NCCS B No. of consumer durables is 4/5/6/7/8+ and education of CWE1is at least College (non-
grad), SSC/HSC, between no formal schooling to SSC/HSC, Schooling up to 9 years,
illiterate respectively
NCCS C No. of consumer durables is 3/4/5/6/7/ and education of CWE is at least College
(non-grad), between up to 4 years of schooling to college, illiterate to up to 9 years of
schooling and illiterate respectively
NCCS DE Rest of the population having up to 3 consumer durables or having lower literacy levels
Glossary (1/2) – City classification and NCCS
classification definitions
1: CWE – Chief WageEarner
6
Vernacular is NOW, not the future

Term Definition
Indian Population
(as of 2018)
1350 Mn = 500 Mn Internet Users (aged above 14 yrs) + 30 Mn internet users (aged
below 14 yrs) + 400 Mn Internet Non-Users (aged above 14 yrs) + 420 Mn Internet non-
users (aged below 14 yrs)
Vernacular Users Users whose preferred language for content consumption on digital media is a
vernacular language (and not English)
Digital Ad B2C advertisements on digital platform including but not limited to social media, OTT,
content platforms, gaming and e-commerce platforms
Digital Media Internet, Online and Digital Media have been used interchange-ably in this report.
It includes: a) both wired and wireless access b) both broadband (3G, 4G etc.) and
narrowband (2G etc.) speeds c) desktop, smartphone and other internet-enabled
devices
Social Media and Content Includes Facebook, Instagram, Twitter, Dailyhunt, Sharechat, TikTok, YouTube,
UCNews, NewsDog and, other similar social media and content platforms
FB Refers to Facebook
OTT Over-The-Top players such as Netflix, Prime Video, Hotstar, Sony Liv, Voot etc.
Gaming Mobile games like PUBG, Candy Crush, Angry Birds etc.
Music Streaming Apps like Wynk Music, JioSaavn, Prime Music, Gaana, Spotify etc.
Conventional Media Non-internet media (Print, Radio and TV)
MAU Monthly Active Users
MTU Monthly Transacting Users
Glossary (2/2) – Other key definitions
7
Vernacular is NOW, not the future

India had an active internet user base of 530 Mn
users in 2018, comprising 260 Mn “monetizable” users
(NCCS A/B/C), which is expected to grow to 400 Mn by
2023 owing to expedited growth in the overall number
of internet users. Consumption of digital content in
vernacular language is a preference for 80% of all
monetizable users, i.e., 210 Mn users with an annual
spending power of $300 Bn. However, the low quality
perception of online vernacular content forces a high
proportion of these users to access Facebook in English,
leading to a whitespace.
A growth in the number of vernacular monetizable
users is expected to create a $3 Bn vernacular digital
ad opportunity for new-age full stack content players in
2023. This opportunity is also driven by the growth of
digital media, currently growing at 2X as compared to
conventional media.
Executive Summary
$3 Bn Vernacular Digital Ad opportunity is expected to
be generated in 2023, driven by growth of monetizable
vernacular users

Monetizable Internet Users
260 Mn in 2018, and will add 140 Mn to reach 400 Mn by 2023
• Out of 530 Mn internet users, 260 Mn users are “monetizable” (NCCS A/B/C), and also
account for almost all of online transactions.
• 80% of current internet non-users are expected to adopt internet by 2023, to take the
overall count of internet users to 850 Mn by 2023.
• Driven by the growth, number of monetizable users are expected to grow to 400 Mn by
2023 i.e. 140 Mn to be added in the next 5 years.
Monetizable Vernacular Users
210 Mn in 2018 (80% of all monetizable internet users, expected to grow at 10% for the
next 5 years to reach ~340 Mn)
• 80% of all monetizable users i.e. 210 Mn prefer content in vernacular language. These
users will drive the growth of Consumer Internet with USD 300 Bn annual spending
power .
• These users are spending ~56% of their time on the internet (esp. on smartphones) as
compared to other media (TV, Print and Radio).
• ‘Social Media and Content’ drives their consumption of time in internet, with rural
consumption higher than that of urban. However:
• 80% of the vernacular user base accesses FB in English due to low quality
perception of online vernacular content. This base can be tapped if quality of
vernacular content can be improved.
• In addition, non FB media also needs to be focused as FB is losing time share to
other social media / internet media.
Opportunity for New-Age Full Stack Content Players in 2023
$3 Bn Vernacular Digital Ad
• Growth in the number of vernacular monetizable users will make vernacular digital ad
spends grow by ~10x, translating into a $3 Bn opportunity in 2023.
• This is also driven by growth of Digital media, which is growing at 2X as compared to
conventional media, and is likely to reach USD ~10Bn in 2023.
• Non Google / FB players will see a business growth by ~6X ($600 Mn to $3.5 Bn).
• Video ads will grow by ~7X, to double their share of digital ad spend.
9
Vernacular is NOW, not the future

Agenda
Monetizable Internet Users
260 Mn in 2018, and will add 140 Mn to reach 400 Mn by 2023
• Out of 530 Mn internet users, 260 Mn users are “monetizable” (NCCS A/B/C), and also
account for almost all of online transactions.
• 80% of current internet non-users are expected to adopt internet by 2023, to take the
overall count of internet users to 850 Mn by 2023.
• Driven by the growth, number of monetizable users are expected to grow to 400 Mn by
2023 i.e. 140 Mn to be added in the next 5 years.
10
Vernacular is NOW, not the future

Internet Users
India’s internet adoption reached 530 Mn at a run rate of 65 Mn
users per year in the last 2 years - ~8x of 8 Mn users added per
year from 2000 to 2009
Internet adoption started in India at the onset of the new
millennium. Early adopters received low-speed internet
(56 kbit/s) on dial-up modems. Desktop computers were
the devices used to access the internet. The average rate
of adoption was 8 Mn users per year. The story started to
change as low cost 2G enabled phones started flooding
the market and websites became mobile friendly. On
an average, 36 Mn people per year got access to the
internet.
Soon after, a seismic shift was witnessed on two fronts
– in internet technology with the introduction of 3G and
in internet-enabled devices with the introduction of
affordable Android smartphones. The faster 3G speeds
and the affordability of smartphones increased the
adoption rate to 45 Mn users per year. But the biggest
disruption was yet to come.
In Sept 2016, internet was essentially commoditized with
the entry of Reliance Jio in the market. Data costs fell
by 93% from pre-Jio rates.. A phenomenal 65 Mn users
on an average adopted internet every year from 2016
onwards. With close to 530 Mn internet users, India has
the world’s second largest internet user base, presenting
a huge opportunity in terms of digital market size.
2000 CY09 CY12 CY16 CY18 Year
72 Mn
530 Mn
180 Mn
360 Mn
65
45
36
8
Desktop Internet
Internet enabled
2G phones
No. of
Internet
Users
Low cost 3G enabled Smartphones
Jio - Affordable 4G LTE
Key Drivers of Adoption
Million Users
added per Year
X
Digital Users
# of internet users (Mn); CY2000-CY18
11
Vernacular is NOW, not the future

Although India’s internet population is about 530 Mn,
~57% of them (~300 Mn) access internet regularly. The
rest are intermittent users who lack continuous access to
internet for reasons such as insufficient data plans,
unreliable network connection etc. Of the 300 Mn active
internet users, about 2/3rd are online service transactors
– the ones who use the internet for booking tickets,
recharging phones/DTH, paying for utilities, and making
payments via UPI, mobile wallets, mobile banking and
others.
More than half of the online service transactors are
product shoppers who make at least 1 transaction on
any e-tailing platform in a year. Hyperlocal users are
the ones who utilize smartphone based applications for
food, grocery, medicinal and commute solutions. They
are concentrated in the top cities but service providers,
especially food-tech companies and cab aggregators, are
aggressively expanding into non Tier 1 cities. This set of
users is expected to see the maximum growth going
forward.
A deep understanding of the online transaction behaviour
of users would enable companies to advertise on relevant
online platforms basis the type of user and traffic volume
on the platform.
Device: Desktop/Feature Phone/Smartphone
Age Group: 7% of 400 Mn below 14 yrs2; rest are 14+ yrs.
Usage: Both intermittent and continuous
Only continuous usage and may or may not transact
online. Typically accesses for social media, search and
WhatsApp.
Books tickets online from IRCTC or Travel Aggregators,
recharges, makes payments. May or may not shop online.
Performs at least one transaction on any online retail
platform in a year. May or may not be a hyperlocal user.
Orders food, cabs, grocery and medicines online.
(Mn Users, CY18)
India’s Digital Funnel Description of a Typical User
AccessTo¹
Internet
530
100%
300+
~57%
200+
~40%
110
~20%
50
~10%
Active
Internet
Users
Online
Service
Transactors
Products
Shoppers
Hyperlocal
Internet Users
Out of 530 Mn, 57% people are Active internet users (rest have
intermittent access), 20% shop for products online…
Note(s): 1.Access to internet includes users who use internet on a shared device
2. Assuming only 7% of people below 14 years of age have uninterrupted access to internet
12
Vernacular is NOW, not the future

All active internet users may not be monetizable as some
of them may have limited spending ability. Hence, a socio-
economic segmentation of all internet users paints a
clearer picture about the monetizability of the users.
Such a segmentation shows that ~260 Mn internet users
are NCCS A/B/C classified – the ones who have higher
spending ability – and are monetizable. Also, almost all of
the online service transactors are NCCS A/B/C classified.
When it comes to geography, we observe that there’s
a 60%-40% urban-rural split in people having access
Note(s): 1. The population below the age of 14 years (~30 Mn) has not been considered under monetizable population
to internet. A significant bulk of the online transactors
belong to urban areas. We expect this picture to evolve as
businesses expand to reach more of the rural population.
Socio-Economic Segmentation of Internet Users
(Mn Users, CY18)
260
210
Internet
Users
Aged
above
14
years
Hyperlocal
Users
NCCS
A/B/C
NCCS
D/E
30
240
Active
Internet
Users
Aged
below
14 Years¹
Online Product
Service Shoppers
Transactors
Monetizable
90
200
110
50
Smartphone Internet enabled
feature phone
NCCS A/B/C ~240 Mn ~20 Mn
NCCS D/E ~140 Mn ~100 Mn
Monetizable Internet Users
…, and 260 Mn users are “monetizable” (NCCS A/B/C), who
drive almost all online transactions
13
Vernacular is NOW, not the future

Currently, there are ~400 Mn adults who do not have
access to internet. While there are a variety of reasons for
the same, all of them can be broadly characterized by 3
barriers:
Access: This is the biggest barrier in terms of number
of people affected by it – people living in regions where
infrastructure hasn’t developed enough for internet access
or people who belong to the marginalized sections of the
society
Affordability: There are people who may be living in
areas where there is adequate infrastructure, but they lack
the financial means to purchase and maintain a internet
supported device
Aspirations: There is a certain section of people who
»either do not know about the benefits of internet or
» do know about the benefits of internet but don’t
perceive those to be beneficial enough to them
This is the segment of non-internet users who are most
likely to become users as the value proposition for internet
usage grows due to wider use-cases.
Barriers to Internet Usage
Descriptive
40-60 Mn
(10-15%)
-
80-100 Mn
(20-25%)
Not in mainstream economy
Reside in far-flung areas
Low income
Aspiring internet users
Low aspirations
Low awareness of use-cases
XX Population (Mn)
1. Aspirations
No perceived benefits
from internet
2. Affordability
Lack of internet
enabled device
3. Access
Lack of access
to internet
220-240 Mn
(55-60%)
Major Barriers User Characteristics
Growth and Monetizable Opportunity
On the other hand, there are ~400Mn non internet users who
face different barriers to adoption…
14
Vernacular is NOW, not the future

As the barriers are lowered, the internet penetration will
gradually grow. Most of the people who may not currently
perceive benefits from the internet will eventually become
users as essential systems (like banking, insurance,
passports, utilities etc.) gain mass online adoption.
Recent trends in the market shows that certain telecom
players like Jio are adopting novel customer adoption
mechanisms. Jio is essentially cross-subsidizing low
priced devices by engaging customers through data
or content. This phenomenon is expected to pan out
sufficiently in the next 5 years such that affordability of
internet devices may not be a barrier any more.
a longer time to overcome as it needs to be solved
at a policy level. India, along with assistance from
large corporates, is making progress in developing
infrastructure.
But inclusion is a more complex barrier that will take
New Users Added to Digital User Base
(Millions of Users, CY18-CY23)
Growth and Monetizable Opportunity
…and as the barriers are lowered, ~320 Mn are likely to adopt
internet by 2023, out of which a significant number is likely to be
of active internet users
530
2018
50
Aspirations
90
Affordability Access
180 850
2023F
1 2 3
Very likely to be
‘Active Internet
Users’.
Likely to be
intermittent
internet users
initially.
15
Vernacular is NOW, not the future

With the growth of internet penetration, the number of
active internet users is expected to double in the next 5
years. However, the growth down the funnel is expected
to be higher; with online service transactors growing at
2.1X, product shoppers growing at 2.5X and hyperlocal
users growing at 3X.
A high proportion of the growth in active internet users
can be attributed to the first time users in Tier 2+ cities
and rural areas. As the active internet user base
increases, users are understandably keen to explore the
enhanced efficiency and convenience that various online
services such as shopping, banking, utility payments,
hyperlocal services offer to them. This explains the higher
growth rate down the funnel. The affordability of
smartphones and deeper internet penetration will also act
as enablers for onboarding the new users.
India’s Digital User Base
(Mn Users, CY18)
Access ToInternet 530
100%
300+
~57%
200+
~40%
110
~20%
50
~10%
Active Internet Users
Online Service
Transactors
Products Shoppers
Hyperlocal
# Smartphone Users (Mn) 400 ~730
850
100%
580+
~68%
420+
~49%
270
~32%
150
~18%
1.6x
~2x
2.1x
~2.5x
3x
14%
10%
16%
20%
25%
CAGR
10-15%
CAGR
(18-23)
Orderof
Growth
Growth and Monetizable Opportunity
Therefore, number of active internet users will double in the next
5 years, with growth down the funnel expected to increase even
faster (2 to 3X)
(CY23F)
16
Vernacular is NOW, not the future

Owing to increased internet penetration and the advent of
affordable internet-enabled smartphones which support
various E-tailing applications, the growth in the number of
online shoppers in Tier 2/3 cities and rural areas is
expected to outpace that of urban areas. According to
estimates, almost 70% of E-tailing GMV would come from
Tier 2+ and rural areas by 2023, compared to 40% in
2018.
The rise in disposable income and increased penetration
of smartphones and internet access in these areas is
expected to be the primary growth driver for the advent of
online shopping. User preferences are also expected to
evolve, especially with the younger population in Tier 2+
cities, who are open to experimenting with the enhanced
options that online shopping provides them.
E-tailers are also trying to capture this growing market
by improving last mile connectivity and offering deep
discounts to onboard new users, with the expectation of
converting a high proportion into repeat customers.
Number of Annual Unique Online Product Shoppers E-Tailing GMV by Customer Type
(CY18-CY23F, Mn) (CY18-CY23F, USD Bn, Descriptive)
CY18 CY20F
~110
Mn
~180
Mn
~270
Mn
28%
11%
CY23F
Tier 1 Tier 2 + & Rural
60
83 100
50
60
40
35
65
3.5x
97
170
CY18 CY20F
~$22
Bn
~$40-45
Bn
~$70-75
Bn
CY23F
30
70
# of Tier 2+ and
Rural shoppers to
be more than
# Tier 1 shoppers
# of Tier-2+ and
Rural shoppers to
be 1.6x of # Tier1
shoppers
Growth and Monetizable Opportunity
Growth in online shoppers will be driven by Tier 2+ & Rural/
vernacular users – they are expected to grow by 3.5 X to
become ~1.6 times of Tier 1 users by 2023
17
Vernacular is NOW, not the future

The number of monetizable internet users will grow
by ~140 Mn to reach ~400 Mn by 2023 owing to high
internet adoption amongst the non-internet users and
the transition of several users from NCCS D/E to NCCS
A/B/C. Out of 140 Mn, 100 Mn (~70%) will come from non
Tier 1 cities. This translates to a large spending power.
Presence on digital platforms will give the brands ability
to micro-target these users, which is difficult on traditional
advertising platforms such as TV, Print etc. Also, the
growth in non-monetizable users during the same period
is expected to be 70%. This makes it important for
advertisers to understand the platform’s reach in a more
nuanced manner, to ensure efficient targeting.
Socio-Economic Classification of Digital Users
(CY18) (CY23F)
NCCS
A, B, C
NCC
S D, E
<14 Yrs,
All NCCS
300 380
15
400 410 40
69
5
15
5
100
30
25
NCCS
A, B, C
Tier
1
Tier
2+
&
Rural
NCCS
D, E
<14 Yrs,
All NCCS
200 220
10
260 240 30
Monetizable Users
>14 Yrs
43
0
10
0
60
20
20
Tier 2+
& Rural
Tier 1
>14 Yrs
Growth and Monetizable Opportunity
All in all, India will add ~140Mn monetizable users to reach
~400Mn by 2023, as more people adopt internet, and transition
from NCCS D/E to NCCS A/B/C
18
Vernacular is NOW, not the future

Agenda
Monetizable Vernacular Users
210 Mn in 2018 (80% of all monetizable internet users,
expected to grow at 10% for the next 5 years to reach ~340 Mn)
• 80% of all monetizable users i.e. 210 Mn prefer content in vernacular language. These users will drive
the growth of Consumer Internet with USD 300 Bn annual spending power.
• These users are spending ~56% of their time on the internet (esp. on smartphones) as compared to
other media (TV, Print and Radio).
• ‘Social Media and Content’ drives their consumption of time in internet, with rural consumption higher
than that of urban. However:
»80% of the vernacular user base accesses FB in English due to low quality perception of online
vernacular content. This base can be tapped if quality of vernacular content can be improved.
»In addition, non FB media also needs to be focused as FB is losing time share to other social
media / internet media.
19
Vernacular is NOW, not the future

A Pan-India survey was conducted by Redseer, spread
across demographics and internet usage patterns to
determine the importance of the vernacular user in the
present day digital space. This was one of the largest
surveys designed to try and understand the impact of
monetizable internet users. An important aspect of this
wide-reaching survey was understanding the preferences
and consumption patterns of English-first Vs. Vernacular-
first users.
Note: This map is intended only as an indicative representation of the country and may not have been prepared for or suitable from a legal/geo political standpoint
26 cities
26 cities
23 cities
24 cities
West India
North India
South India
East India
North East India
Areas Covered Research Coverage
121
Cities & Towns
5
Geographies
2400
Internet Users
600
Non Internet
users
22 cities
Research Methodology
We conducted 3000 surveys in 121 cities across India, with
the samples spread across geographies, and internet usage
patterns
20
Vernacular is NOW, not the future

Note(s): 1. Can switch keyboards between English and Vernacular
Vernacular users can be classified into three broad
segments:
Vernacular Pure: These users have a strong preference
for their vernacular language and their basic phone
usage (phone settings, keyboard), social engagement
via phone (social media, communication, etc.) and online
content consumption is in their vernacular language. They
comprise 20% of all monetizable users.
Vernacular Intermediate: These users prefer English
as the basic phone usage language, while social
engagement and online content consumption is in
the vernacular language. They comprise 30% of all
monetizable users.
Vernacular First: These users prefer English for basic
phone usage and social engagement, whilst preferring
to consume online content in their vernacular language.
They comprise 30% of all monetizable users.
Classfication of Users (CY18)
(Basis propensity to use Vernacular Vs. English)
Vernacular
Pure
Vernacular
Intermediate
Vernacular First Mostly English
Users
BasicPhone
Usage
NCCS D/E
Phone Settings
Keyboard1
Engagement Social Media
SMS/WhatsApp
Content
Consumption
Videos
News
Movies
Music
% of All Monetizable Users (Mn Users) 20% (52 Mn) 30% (78 Mn) 30% (78 Mn 20% (52 Mn)
Vernacular Monetizable Users ~210 Mn (80% of all monetizable users - 260 Mn)
Vernacular User Base
There are ~210Mn internet users who prefer consuming content
in vernacular languages, and are monetizable
21
Vernacular is NOW, not the future

Vernacular monetizable internet users have a 3X total
spending power when compared to monetizable English
internet users. With approximately 210 Mn monetizable
users in India, with a per capita average annual spend
of $1400-$1500, the total annual spending power of this
segment translates to ~$300 Bn. In comparison, the total
annual spending power of monetizable English users is
$155 Bn.
This highlights the importance of the vernacular user in
the evolving digital space. While advertisers are reaching
English users, it is only 25% of the total spend capacity.
Almost 75% of the spend capacity is still untouched
as Vernacular-first users are less likely to engage with
English ads.
Segment-wise Total Annual Consumption
Economic Value of Vernacular Users
These vernacular-monetizable internet users have a total
spending power of ~USD 300 Bn i.e. ~2x when compared to
English Internet Users
-750 Mn ~375 Bn
-50 Mn
-
$3000-$3200 $155 Bn
-210 Mn $1400-$1500 ~$300 Bn
<$500
Monetizable English
Internet Users
Population
(Mn People)
Per CapitaAverage
Annual Spends
(USD)
TotalSpending
Power
(Mn People)
Non Monetizable
or Non Internet
Users
Monetizable Vernacular
Internet Users
~2x
Note(s) and Assumption(s):
1. Children below 14 yrs of age are excluded in this analysis
2. Income inflation 2015-18 is 6%
3. Average Savings rate of 30%
4. Effective tax rate of 25%,15% and 5% for relevant income bracket
5. 1 USD = INR 65
22
Vernacular is NOW, not the future

The projected growth in the vernacular monetizable user
base would create a sizeable monetizable population,
boosting vernacular digital ad spends. Vernacular
platforms offer higher engagement as compared to
English platforms. This, in combination with maturing
vernacular platforms translates into a $3 Bn opportunity
for vernacular digital ad spend.
Monetizable Digital Population 2018-23 Digital Ad Spend - Vernacular v English
(Mn. Users) (USD Bn.)
Vernacular monetizable users will increase
to ~340 Mn in 2023…
… which will drive 10x growth in vernacular
digital ad spend
2018 F2023
80%
English
Monetizable
User
Vernacular
Monetizable
User
85%
20%
~260 Mn
~400 Mn
15%
2018
$3 Bn
Opportunity
F2023
5-10%
25-30%
70-75%
90-95%
CAGR
~75%
CAGR
~32%
$10Bn
Vernacular Digital opportunity
Growth in number of vernacular monetizable users will make
vernacular digital ad spends grow ~10x, translating into a $3 Bn
opportunity in 2023
23
Vernacular is NOW, not the future

The media consumption pattern of these users highlights
their viability as a target segment for digital advertising. It
was abundantly clear that the internet was the main mode
of media consumption in 2018, with users spending 56%
(189 mins) of the time. This translates to a 19% growth in
the time spent on the internet for media consumption over
2015.
Smartphones have enjoyed a rapid growth in the Indian
market in recent years and this is highlighted by the fact
that smartphones emerged as the preferred medium
of consumption for most internet-based activities such
as social media and content, OTT Platforms and online
shopping.
The growth in internet consumption at the expense of TV
and Print can be attributed to a combination of content
and convenience based factors.
• Ability to view more personalized content.
• Convenient availability of a larger assortment of
content.
• Better control over viewing time.
• Higher mobility.
• Real time news and updates
Television viewing could be increasing on overall base
owing to low-income population spending more time on
the same.
2015 2018
36
56
(189
mins)
38
26
30
14
308
mins
337
mins
-16%
-5%
+19%
For social media
and content
Smartphones is the preferred
medium
For OTT
Platforms
For shopping
online
84%
90%
76%
Desktop
2%
15% 1%
6%4%
36%
Desktop &
Smartphone
Smartphone
Internet TV Print & Radio
Internet has surpassed all other media
consumption modes…
… with Smartphones emerging as the preferred
consumption medium.
Media Engagement by Vernacular Users
These users are spending more time spent on the internet
(esp. on smartphones) as compared to other media (TV,
Print and Radio)…
24
Vernacular is NOW, not the future

While music streaming, gaming and OTT platforms
together accounted for 31% of the time spent on the
internet (across both rural and urban areas), social media
and content took up a staggering 69% of the daily time
spent browsing the internet by vernacular users.
Rural consumption of social media and content is ~18%
greater than that in urban areas, fueled by a markedly
high non-video consumption. Approximately 30% of
India’s internet has been online for less than 3 years.
This new user base is increasingly addicted to consume
content online. The sheer amount of time spent daily on
these platforms gives advertisers an opportunity to target
these users. The higher video consumption in urban areas
is due to higher internet speeds and a more evolved user
base.
69%
Social Media
and Content
OTT
Gaming
Music Streaming
Short-Format
Videos
Non-Video
19%
6%
6%
Urban Rural
59
56
67
93
Average Daily Time Spent on Internet
(Mins per Day)
187
mins
126
mins
149
mins
A largely similar
trend is observed
in urban as well as
rural areas.
2015
Note(s): 1. Non-video means content browsing, news and photos on platforms like Facebook, Instagram, Dailyhunt etc.
2. Short format videos are defined as videos with duration <10mins – could be on the above platforms ordifferent.
Media Engagement by Vernacular Users
…, and most of the share of their time spent on internet is on
Social media and Content, with rural consumption higher than
that of urban
25
Vernacular is NOW, not the future

2015 2018
80%
Disagree
U
s
es
F
B
in
English
Strongly
Agree
Agree
U
s
es
F
B
in
vernacular
43%
Others*
20% 56%
111 Mins
per day
189 Mins
per day
2015
Vernacular Monetizable
User Base
2018
you agree that quality
vernacular content is not
available online?
80%
12%
21%
20%
67%
210
Mn
189 Mins
per day
Mostly
Vernacular
platforms
Share of FB is going down as most of the
vernacular users are moving to vernacular
platforms.
80% of vernacular monetizable users use FB
in English driven by negative perception of
vernacular content quality.
Vernacular users are spending significantly lower time on
Facebook. From spending 80% of the time spent on social
media and content on Facebook in 2015, users were
allocating only 43% of their time on Facebook in 2018.
Another issue is the negative perception of vernacular
content quality. This has forced almost 80% of the
vernacular monetizable users to use Facebook in English.
Facebook was one of the first popular social media
platforms, and a lot of newly onboarded internet users
started their online journey with Facebook. As users are
evolving, they are looking for more personalized and
engaging content. Users still perceive Facebook to be
an English-first platform and hence, find other avenues
for vernacular content and social media needs. This
represents a huge opportunity for other social/content
platforms to attract the vernacular user base.
Media Engagement by Vernacular Users
Vernacular users are spending significantly lower time on
FB, which is being replaced by mostly vernacular platforms
26
Vernacular is NOW, not the future

Note(s) and Assumption(s): 1. Income inflation 2015-18 is 6%
2. Average Savings rate of 30%
3. Effective tax rate of 15% and 5% for relevant incomebracket
4. 1 USD = INR 65
Population Engagement Spending Power
Monetizable
Populationsize
Time spent on
social media
Social media vs.
other Internet
(2018) Per capita annual
average spend
Total spend
potential
(USD Bn.)
CAGR
(2018-23)
Growth in media
consumption
(2015-18)
English
Monetizable
50 Mn
130 Mins
1.7x
$3000-$3200 ~155
4% 13%
Vernacular
Monetizable
210 Mn 150 Mins 2X
$1400-1500 ~300
10% 9%
Vernacular Monetizable Users Key Takeaways
Vernacular users are bulk of the monetizable users and will
drive the growth of Consumer Internet with USD 300 Bn annual
spending power
27
Vernacular is NOW, not the future

Vernacular Digital opportunity
Also, digital ad spend is significantly expected to increase
for non FB / Google internet platforms (6X), and video ads
across platforms (7X) by 2023
Non Google/FB internet platforms are expected to see
a high rate of growth in the next five years. Owing to the
English-first perception attached to Google/FB, other
platforms with a focus on the vernacular-first user base
are poised to fill this gap. Additionally, these platforms
already have a sizeable existing user base (100 Mn+
MAU for certain platforms), thereby having a strong base
for scaling up. Another important enabler for the growth
of these platforms is highly engaging and personalized
content such as hyperlocal content, news etc., enhancing
the relatability of the platform for the vernacular user.
Non Google / FB players will see a
business growth by ~6X
(USD 600 Mn to USD 3.5 Bn)
Video ads will grow by ~7X, to double their
share of digital ad spend
Digital Ad. Market (Google+ FB v Others) Digital ad spend (Video v Non-Video)
(USD Bn.) (USD Bn.)
2018 2023
$10Bn
65%
$3 Bn
20%
80%
35%
2018
$3 Bn
F2023
$10Bn
80% 40%
20%
60%
CAGR
~10%
CAGR
~45%
Video Ads Non Video Ads
Google +
Facebook
Other Players
28
Vernacular is NOW, not the future

Agenda
Opportunity for new-age full stack content players in 2023
$3 Bn Vernacular Digital Ad
• Growth in the number of vernacular monetizable users will make vernacular digital ad spends grow by
~10x, translating into a $3 Bn opportunity in 2023.
• This is also driven by growth of Digital media, which is growing at 2X as compared to conventional
media, and is likely to reach USD ~10Bn in 2023.
• Non Google / FB players will see a business growth by ~6X ($600 Mn to $3.5 Bn).
• Video ads will grow by ~7X, to double their share of digital ad spend.
29
Vernacular is NOW, not the future

Digital media has a current reach of 530 Mn users, in
only 18 years of existence (computing from 2000). In
comparison to ad spends on traditional forms of media
such as TV, Radio and Print, digital ad spends are
projected to grow at almost double the rate in the next 5
years to reach ~$10 Bn. The faster growth in digital ad
spend can be attributed to the following broad factors:
Consumer Internet, which is a large contributor to digital
media ads, has witnessed a steep growth curve in recent
years.
The time spent on digital media is higher than other media
forms.
Compared to other media forms, digital has witnessed
the fastest growth in reach, thereby improving its efficacy
targeting a larger set of the population.
With 530 Mn users reach already, Digital media
is expected to grow the fastest…
…
and is expected to grow at ~2X when
compared to other media (27% vs. 14%)
Ad spend (Digital v Others)
(USD Bn.)
Medium CAGR of
Reach
( CY18-23)
Ad-Spend
on Medium
(CY18)
Reach
(Mn users,
CY18)
Years of
Exis-
tence
Digital 14% $3.0 Bn 530
18
(Since
2000)
TV 8% $4.8 Bn 835
59
(Since
1959)
Radio 7% $0.4 Bn 700
91
(Since
1927)
Print 1% $3.4 Bn 350
238
(Since
1780)
2018
~$12 Bn
F2023
25-30%
(~$3 Bn)
35-40%
(~$10 Bn)
60-65%
70-75%
CAGR
~27%
Digital
Other Media
CAGR
~14%
~$23Bn
Vernacular Digital opportunity
This is also driven by growth of Digital media, which is
growing at 2X as compared to conventional media, and is
likely to reach USD ~10Bn in 2023
30
Vernacular is NOW, not the future

(1) Internet Users
(2) Digital Ad Spends
On Internet
Active Internet
Users
~2x
Growth
~3.3x Growth
Monetizable
Users
~1.5x
Growth
On Vernacular
Internet Platforms
~10x Growth
Active Internet
Users
~1.6x
Growth
On Non-
Fb/Google
Platforms2
~6x Growth
Spending power -
Vernac Monetizable
~2x
Growth
On Video
platforms2
~7x
Growth
CY18
CY18
CY18
CY18
CY18
CY18
CY18
CY18
CY23F
CY23F
CY23F
CY23F
CY23F
CY23F
CY23F
CY23F
300Mn
$3Bn
260Mn
$0.3Bn
210Mn
$0.6Bn
$300Bn
$0.6Bn
580Mn
$10Bn
400Mn
$3Bn
340Mn
$3.5Bn
$650Bn1
$4Bn
Key Takeaways
As internet becomes the most preferred medium, specifically
with significant rise in vernacular users, digital ad spends on
vernacular platforms will rise significantly
Note(s): 1. $650 Bn in CY23 = 340 Mn Vernacular monetizable users (CY23) x ~$1900 per capita annual spend ($1450 annual spend in CY19, increased at 6% yearly inflation until
CY23);
2. For both English and Vernac content / ads;
31
Vernacular is NOW, not the future

A number of new age businesses have already taken the first steps towards incorporating vernacular users and tap into
this high potential digital advertisement market. A few use-cases being implemented are as follows:
• Growing transactions from customer
• Growing engagement with partner
• Engaging users through vernacular content assortment
Source(s): Redseer Analysis
* As reported in media
Transactional
Service
Providers
Content
Providers
User Base Vernacular Reach
10 Mn+
(MTU)
Support for 12
languages which
covers majority of
Ola’s Tier-2+ users
Success Factor Challenges
WhatsApp like
booking experience
through integration
with IndusOS
Consistency of user
experience in low-
cost phones
User Base Vernacular Reach
40 Mn+
(MAU)
25% PayTM users
interact in regional
language
Success Factor Challenges
Multilingual App
which supports 11
languages
3rd party extensions
and Payment
Gateways are still in
English
User Base Vernacular Reach
160 Mn+
(MAU)
14 Languages –
potential to reach 234
Mn Indians
Success Factor Challenges
Good quality
vernacular experience
on mobile device
Monitoring content-
(insensitive, fake) in
different languages
User Base Vernacular Reach
100 Mn*
(MAU)
Content in 10+ languages
– ~60% of content
consumed is Hindi (~20%
in other vernacular)
Success Factor Challenges
Native vernacular
users acquired
through Jio’s netwrok
Fragmented labels,
onboarding
Case Studies
Some have already taken the first steps in the vernacular
route and others will follow – Vernacular opportunity isn’t in
the future, it’s NOW
32
Vernacular is NOW, not the future

Authors
Anil Kumaris Founder of Redseer Consulting. He has been part of engagements in Internet, Private Equity, Retail CPG and
Healthcare amongothers. He specializes in growthand investment strategies. Anil is abeliever of the data-driven approach
in solving business problems. His consulting approachleverages Data IP,sector expertise and the client’s core hypothesis.
He holds B.Techfrom IIT-Delhi.
Anil Kumar
Founder and CEO
anil@redseer.com
Abhishek heads the Consulting and Diligence practice atRedseer for the Indian Market. He brings in ~13 years of
strategy and consulting experience in Technology, Telecom, Insurance /Insure-tech, Automotive (Mobility), and
consumer Internet Sectors, both in Indian as well as Global markets.
He is aSP Jain Alumnus
Abhishek Chauhan
Associate Partner
abhishek@redseerconsulting.com
Ujjwalis an Associate Director atRedSeer. He is abigbeliever in the power of technology to disrupt
the status quo. He specializes in due-diligences especially in the consumer internet space. Prior to
joiningRedSeer, Ujjwalco-founded and exited a healthcare start-up. He canbe can reached at
ujjwal@ redseerconsulting.com.
He is an IITDelhi alumnus
Ujjwal Chaudhry
Director
ujjwal@redseerconsulting.com
Raunakis a Senior Consultant withRedSeer and has 5+ years of experience in management consulting and corporate
strategy. He has extensive experience workingacross agamutof strategic engagements including due diligence, business
growthstrategy, market entry and process transformation across infrastructure, government, education and energy
domains.
He is an ISB Hyderabad alumnus.
Raunak Sinha
SeniorConsultant
33
Vernacular is NOW, not the future

Authors
Rishik is an Associate Consultant withRedSeer and has 3+ years of experience working across
Consumer Internet, Media, O&G and BFSI in Data Science, Sales, Marketing, Research and
Strategy roles.
He is an IIMRanchi alumnus
Rishik Debnath
Associate Consultant
Abhijit is an Associate Consultant withRedSeer and has 3 years of experience workingacross Consumer
Electronics, Automobiles, FMCG and BPM in CorporateFinance and Marketing Strategy roles.
He is an IIMLucknowalumnus
Abhijit Routray
Associate Consultant
Eshan has conducted extensive research for market sizing and competitive bench marking across multiple verticals
in the consumer internet sector, he has developed a deep understanding of the supply chain and logistics. He can
be reached at eshan@redseer.com
He is aBIT alumnus
Eshan Tyagi
Business Analyst
Shashank is a Business Analyst having experience e-commerce, e-logistics and has expertise in in due diligence acrossthe
consumer internet verticals. He has worked on strategy engagements with many leading start-ups and VC firms. He can be reached on
shashanks@redseerconsulting.com
He is aBITSGoa alumnus
Shashank Subramaniam
Business Analyst
34
Vernacular is NOW, not the future

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35
Vernacular is NOW, not the future

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