How India has changed through digital and which opportunities for companies are coming out of this development. Presentation held hat Hamburg Chamber of Commerce in the India Week 2015

1. Understanding Indian Consumers -
The Digital Opportunity
AECAL Asian E-Commerce Alliance GmbH
Prof. Peter Kabel

2. While Western countries and China are evolving into a more
mature stage of E-Commerce India is at a starting point
0%
1990 1993 1996 1999 2002 2005 2008 2011 2014 2017E 2020E
20%
40%
60%
PopulationPenetraion(%)
Internet User Penetration Curve, USA / China / India, 1990-2020E
Source: World Bank, Hillhouse Capital forecast for India beyond 2014
Catalyst Companies
Netscape
Yahoo!
Amazon.com
eBay
USA China India
Catalyst Companies
Tencent
Alibaba
JD.com
Catalyst Companies
Snapdeal
Amazon.in
Flipcart
Facebook
WhatsApp
80%
100%

3. India is a mobile and social media game – traditional desktop
computer to be leap frogged
70%
Mobile Subscription Penetration
28%
Mobile Penetration
Mobile in India 2014
19%
Internet Penetration
31%
Urban
69%
Rural1,255,777,000
Total Population
349,000,000
Mobile Users (#2 worldwide)
243,199,000
Internet Users
13 %
Smartphone Penetration159,000,000
Smartphone Users
13%
Social Media Penetration160,000,000
Active Social Media Users
886,300,000
Active Mobile Subscriptions
Source: KPMG

4. Onlythe 4 biggest cities alone have more smartphone users
than whole Germany
M
um
bai
12
8.1
4.7
4.5 29.3
4.4
3.8
2.8
2.7
Delhi
Hyderabad
Chennai
Germ
any
Kolkata
Bangalore
Ahm
edabad
Pune
+ 45 cities with
over 1 million inhabitants
Source: IAMAI
Smartphone users
(in Million)

5. Smartphone users are continously connected
and spend their time in social networks
Global
Global
42%
18%
18%
31%
12%
11%
23%
23%
26%
15%
35% 18%
26%
18%
21%
22%
28%
46%
39% 36%
47%
54%
25% 22%
15%
31%
42%
51% 58%
40%
7%
13%
17% 18%
6%
17%
7% 9% 6% 7%
US
US
Germ
any
Germ
any
China
China
India
India
Frequency of connection
(% of respondents)
Ranking of activities based on
time spend online(% of respondents)
Source: A.T. Kearney analysis
All day long Every hour (> 10 times a day)
2-4 times a day Once a day or less
Social networking Shopping
Online Entertainment Transactional services

6. Kaleidoscope India.

7. Kaleidoscope India. There is not
one India, but many.

8. Kaleidoscope India. There is not
one India, but many. Society
lives in different times side by
side – from hyper modernityto
mid ages. Unifying seemingly
incompatible beleifs and
behaviors.

9. Kaleidoscope India. There is not
one India, but many. Society
lives in different times side by
side – from hyper modernityto
mid ages. Unifying seemingly
incompatible beleifs and
behaviors. Many shades of rich
and poor. Metro Areas, Tier II, Tier
III and rural.

10. Kaleidoscope India. There is not
one India, but many. Society
lives in different times side by
side – from hyper modernityto
mid ages. Unifying seemingly
incompatible beleifs and
behaviors. Many shades of rich
and poor. Metro Areas, Tier II, Tier
III and rural. Different age cohorts
with different backgrounds and
different digital abilities.

12. India will never be the same.

13. India will never be the same.
Enjoying the merrits of
anonymity.

14. India will never be the same.
Enjoying the merrits of
anonymity. Understanding
oneself as part of a group.
Gain voice. Keep contact and
reach out.

15. India will never be the same.
Enjoying the merrits of
anonymity. Understanding
oneself as part of a group.
Gain voice. Keep contact and
reach out. Leveling differences
and intransparencies.

16. India will never be the same.
Enjoying the merrits of
anonymity. Understanding
oneself as part of a group.
Gain voice. Keep contact and
reach out. Leveling differences
and intransparencies. Think of:
Banking, Health services, Rural
services, Information and
decision making on every level,

17. India will never be the same.
Enjoying the merrits of
anonymity. Understanding
oneself as part of a group.
Gain voice. Keep contact and
reach out. Leveling differences
and intransparencies. Think of:
Banking, Health services, Rural
services, Information and
decision making on every level,
E-Commerce and the unleash of
entrepreneural power.

18. > 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Source: Qualitative research / BCG
User Segmentation

19. 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Source: Qualitative research / BCG
User Segmentation
Active Aspirer
2013
28M

20. Name Age City Occupation
Varun 22 Delhi Student
Owns Device(s)
Samsung smartphone, Dell Alienware Laptop
Spends
8-10 hours online
Just bought running shoes through Amazon and recharged is phone via
paytm, where he received a cashback.
Varun is a final year student of Delhi University. He lives with his small famliy in
southern Delhi. His dad is a banker and mom is a teacher. He gets limited pocket
money. For him, being cool and trendy maters but at the lowes cost possible. He
always hunts for discounts.
Online Activity
Playing games, reading news, music/video streaming, shoping - gadgets apparel,
video games, movie tickets booking, chatting, dating, browsing, deals/discounts,
online courses, jobs/internships
Mostly uses boradband connection at home/university. Uses
mobile internet when he is not in WIFI-zone with a prepaid data plan.
Active Aspirer
2013 28M
2018 55M

21. Name Age City Occupation
Anusha 20 Jamshedpur Student
Owns Device(s)
Xiaomi smartphone, HP Laptop
Spends
7-8 hours online
Just bought a red top online through Jabong and received a bonus for
another buy.
Anusha is a second year college student. She lives away from her family in the
college hostel. She uses internet mainly for social media, shopping, deals hunting
and knowledge. She aspires to look trendy and fashionable.
Online Activity
Browsing information, Music/videos streaming, Shopping (gadgets apparel, lin-
gerie, books), Chatting, Social media, Browsing Deals/Discounts, Online Courses,
Jobs/Internships
Mostly uses broadband connection at college and has access to a shared WIFI at
her hostel. She has a data mobile plan but has to manage cost carefully.
Active Aspirer
2013 28M
2018 55M

22. Name Age City Occupation
Arjun 14 Kochi 9th grade Student
Owns Device(s)
Xiaomi Phablet, HP Laptop from older brother
Spends
7-8 hours online
No funds for buying right now ;-(
Although he comes from a well of family, he doesn‘t have a lot of money now.
He tries out lots of different types of apps for games, sports, media and for net-
working. He is keen to learn tips and tricks and shares those on his various social
media accounts.
Online Activity
Chatting, Music/videos streaming, Chatting, Social media, Browsing Deals/Dis-
counts,
Mostly uses broadband connection at home or at friends. He knows every WIFI
between home and his school. On the go he has to be quite cautious because
limited data plan.
Selfie Kid

23. 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Source: Qualitative research / BCG
User Segmentation
Novel Networkers
2013 7M
Entertainment Enthusiasts
2013 23M
Social Shoppers
2013 4M
Professional Pros
2013 7M
Active Aspirer
2013
28M

24. Name Age City Occupation
Neha 25 Chitoor School teacher
Owns Device(s)
Lenovo A6000 smartphone, hp Laptop
Spends
5-6 hours online
Just bought lingerie online on Clovia and a special medical cream for her
mother.
Neha is a school teacher of a private school based in Chitoor (AP). She lives with
her parents. Neha uses internet to keep in touch with her friends. She is a fashion
junkie and keeps an eye on latest fashion trends. She usually shops for brands not
available in her town and is actively researching with reviews before buying.
Online Activity
Browsing information, Shopping (gadgets apparel, lingerie, books), Chatting,
Dating, Social media, Browsing Deals/Discounts, Online Courses,
Streaming Music
Mostly uses the home connection to access the internet. Uses mobile internet
when she is outside with a pre paid plan.
Novel Networker
2013 7M
2018 30M

25. Name Age City Occupation
Sikhander 28 Jabalpur Sales manager
Owns Device(s)
Micromax smartphone, Acer laptop
Spends
8-9 hours online
Just bought bus tickets online through Redbus and unlocked pay-level in
Implosion his favorite game app.
Sikhander is a sales manager at Mahindra Tractors. He lives in the small town of
Jabalpur. He is getting married in 3 month. He is a ardent fan of Indian music and
cricket. Most of his time on internet is for chatting, social media and watching vi-
deos. He likes shopping online but most of the ecommerce companies don‘t ship
to his place
Online Activity
Information browsing, reading news, music/video streaming, social media, chat-
ting, playing games
Uses the office broadband conncection to access the internet. Uses mobile internet
when he is on the go on a prepaid plan where he consumes more then 2Gb/month
and gets some reimbursement from his employer.
Entertainment Enthusiast
2013 23M
2018 95M

26. Name Age City Occupation
Shalini 31 Bangalore Stay-at-home-mother
Owns Device(s)
Samsung S2, Lenvolo Laptop from her former employer.
Spends
7-8 hours online
Just bought a Saree online and a pink handbag on Myntra
Shalinni is a stay-at-home mother of a 1-year old kid. She is an experienced IT
professional and is currently on a motherhood break. For her, convenience and
quality matters the most. Also, she is the kind of person who loves sharing her
updates with her social media firends.
Online Activity
Shopping (gadgets, apparel, lingerie, baby products, grocery), Information
browsing, reading news, chatting, social media, , online courses, freelance pro-
jects, music/videos streaming,
Mostly uses the home boradband connection to access the internet. uses mobile
internet when she is outside home with postpaid plan from her husband.
Social Shopper
2013 4M
2018 10M

27. Name Age City Occupation
Rohit 28 Chennai IT Professional
Owns Device(s)
IPhone 5s, Apple Powerbook (company), SonyVaio laptop (from college days)
Spends
4-5 hours online beside work
Just bought a present for his girldfriend on snapdeal and booked a flight
trip to Ladakh.
Rohit did his bachelors from BITS Pilani and MBA from IIM Ahmedabad and lives
together with two of his colleagues. He thinks about a digital destination to each
and every tasks of his life and loves travelling and recently did a trip to Ladakh
with his girlfriend, whom he found on the internet.
Online Activity
Information browsing, reading news, music/video streaming, shopping (gadgets,
apparel, books, movie ticktes), social media, chatting, playing games, travel
tickets, banking, taxi services (he loves Olacab)
Mostly uses the home/office broadband connection to access the internet. Uses
mobile internet when he is on the go but tries to stay below the 1GB/month limit
his prepaid plan is allowing him.
Professional Pros
2013 7M
2018 15M

28. 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Source: Qualitative research / BCG
User Segmentation
Late Learners
2013 15M
Novel Networkers
2013 7M
Entertainment Enthusiasts
2013 23M
Social Shoppers
2013 4M
Professional Pros
2013 7M
Active Aspirer
2013
28M

29. Name Age City Occupation
Ajit 54 Pune Business Owner
Owns Device(s)
Nexus smartphone, HCL desktop at office.
Spends
2-3 hours online
Just bought replacement knife set online through Indiamart
Ajit is a businessman who lives with his wife in Pune. He has a small processed
food business. Internet helps him to stay updated regarding the market trends
and prices and for banking. He does not shop online much, but he appreciates the
market transparency coming with the internet. He uses internet to book travel
tickets and read news. And just recently he discovered Whatsapp to exchange
with his family.
Online Activity
Information browsing, reading news, exchanging with family (chatting),
travel tickets booking, procurement for his business.
Mostly uses the office connection to access the internet. Uses mobile internet
with pre paid plan, which his son is recharging for him at the booth in the street.
Late Learner
2013 15M
2018 20M

30. 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Data Discoverers
2013 49M
Source: Qualitative research / BCG
User Segmentation
Late Learners
2013 15M
Novel Networkers
2013 7M
Entertainment Enthusiasts
2013 23M
Social Shoppers
2013 4M
Professional Pros
2013 7M
Active Aspirer
2013
28M

31. 55 years 55-35 years
TierI
34-23 years
TierII-IVRural
22-15 years
1950 1960 1970 1980 1990 2000
Data Discoverers
2013 49M
2018 280M
Source: Qualitative research / BCG
User Segmentation
Late Learners
2013 15M
2018 20M
Novel Networkers
2013 7M
2018 30M
Entertainment Enthusiasts
2013 23M
2018 95M
Social Shoppers
2013 4M
2018 10M
Professional Pros
2013 7M
2018 15M
Active Aspirer
2013
28M
2018
55M

32. Name Age City Occupation
Ifran Ali 26 Rural UP Garment business owner
Owns Device(s)
Micromax smartphone, Dell Desktop at office
Spends
3-4 hours online
Just bought train tickets online through IRCTC
While he travels to collect his garment, he buys tickets online, uses Google maps
to find addresses. He uses facebook and Whatsapp permanently and shares a lot
of content on those platforms. He exchanges messages in his local language. Pre-
sently he is not buying things online, because of lack of delivery in his area. But he
does a lot of business via Whatsapp with suppliers, who share the latest produtcs
as images with him.
Online Activity
Information browsing, Reading news, Music/Videos streaming if bandwith
allows, chatting, playing games.
He uses the office connection to access the internet. At home bandwith is very
poor. When on travel he enoyes higher bandwidth of mobile networks on a pre-
paid data plan. Because of frequent power cuts his mobile phone became the
main device for him.
Data Discoverer
2013 49M
2018 280M

33. Fundamental change
Common belief Reality
• Most users are from metropolitan areas.
• Most users are 18 to 25 years old and affluent.
• 34% of internet users are from smaller urban
areas (tier 2, tier 3 and tier 4 cities), and 25%
are from rurals areas.
• 57% of urban users are older than 25 and
will make up 70% of the urban internet
population.
Who is online?
How do users
access the
Internet?
Why are Indian
users online?
What drives
online traffic?
What impact
does the
Internet have?
• Mobile Internet activity is small and irrelevant. • 45% of urban consumers with access to the
Internet use only mobile devices to connect.
• Most online users are discount driven.
• Deals and discounts dominate online sales.
• Discounts drive 30% of online purchases, but
convenience (37%) and variety (29%) are also
critical.
• Social media create a positive buzz. Internet
users spend most of their time on social media.
• The commercial impact of the Internet is over
stated.
• eCommerce is very limited.
• Search engines drive traffic more than 40%
of the time.
• The impact of social media is limited, driving
just 25% of traffic.
• Among urban internet users, 40% engage in
digital activity at some point in the purchase
process, and 13% purchase online.
Source: BCG

34. AECALwas founded and established by a team with
complementing skills and backgrounds
Prof. Peter Kabel, Managing Director
Marketing and Sales
• Teaching Professor for Media Communications at Hamburg University of Applied Sciences
• Serial Internet- and Media Entrepreneur (Kabel New Media, Trendbüro, Büro Hamburg,
Tone Consultants)
• Experienced Investor in European and Indian Startups (i.a. Ixigo)
• Active in India for 15 years
• Professional background in Consulting, Design and Marketing
Get in touch: peter.kabel@aecal.de +49 1714715606
Dominik Gyllensvärd, Managing Director
Finance and Operations
• Consultant with focus on Digital Transformation with project engagement in over 20 countries
• Active investor in various digital and E-Commerce ventures
• Accenture (strategy consultant)
• Frontlineshop (CFO)
• dgroup/ diligenZ management consulting
Get in touch: dominik.gyllensvaerd@aecal.de +49 1735278789