Mary Meeker Internet trends 2017 report is out, and this year’s report has a lot of focus on India and how the market is growing, with intense competition and that Indian consumers are winning. For those who don’t know, Mary Meeker is a partner at Kleiner Perkins Caufield & Byers, and her annual Internet Trends report is much awaited and gives an overview of the entire industry.
So what does the Mary Meeker Internet trends 2017 report say about the Indian market? For starters, the report points out India’s Internet users continue to grow, and it now stands at 355 million internet users, which puts India number two in the market. This is just behind China, which is the leader.
According to the Mary Meeker Internet Trends 2017 report, Indian’s Internet popular grew 28 per cent in mid-June 2016, with 40 per cent year-on-year growth. However as the report notes, India’s internet penetration is still at 27 per cent, which means there is a long way to go before we even cross the 50 per cent mark in internet penetration.
The other key highlight for India in the report is that we are now the number one global market for time spent on Android. The number of Google Play downloads in India have crossed the US market for the year 2016, which shows how fast the market is growing. However, this data for India on Android phones comes after excluding China from the dataset. Remember China doesn’t have the official Google Play Store.
The Mary Meeker Internet Trends 2017 report confirms that India’s smartphone shipments continue to grow 15 per cent year-on-year if the first quarter of 2017 is taken into account. On the smartphone market, the report also captures how the Indian market has changed. In the first half of 2017, Chinese players like Xiaomi, Oppo, Vivo continue to make gains with smartphones getting cheaper and better, says the report. It also highlights how Indian players like Lava, Micromax, and Jio are now fighting for the low-cost 4G feature phone.
The report also notes how from 2014 to 2017, players like Micromax, Lava, Karbonn have been fighting for feature phone market share, and how the average selling price (ASP) has also fallen. But the report notes, from 2014 to 2017, the market witnessed the rise of Chinese players and players like Lenovo, Xiaomi, Oppo, Vivo fought for the smartphone market with quality features, online distribution. More importantly the ASP of smartphones has become stable. It also notes how the entry of Reliance Jio’s Lyf branded phones intensified the fight in the smartphone market.
The growth of mobile in India is not surprising. In India, the mobile web traffic is 80 per cent, which is well above the global average, and based on the chart we are second to Nigeria. The fact that India’s internet revolution will be driven by mobile is nothing new, given most first time Internet users are coming online via their smartphone in the country.
Not only is mobile traffic dominating India’s internet usage, but as the report shows, Indians spend 45 per cent of their time on mobile phones, and weekly time spent on a mobile is 7X spent of the time spent on a television set. The top activities for Indians on mobiles: Entertainment, which stands at 45 per cent, followed by Search, Social and Messaging that stands at 34 per cent, with news and media occupying just over 2 per cent.
When it comes to telecom players in India, the report says while Bharti Airtel, Vodafone and Idea collectively maintain over 60 per cent share of broadband subscribers, they’ve also cut data rates thank to the entry of Reliance Jio. This is a trend we saw most of last year, since Jio went on its free trial run, and we are seeing this continue in 2017 as well.
According to the Mary Meeker report, India saw a 10 per cent decline in data costs per GB decline on quarterly basis, while voice costs declined 4 per cent quarter on quarter. Mary Meeker report also notes that after the entry of Jio in the market, incumbent players lost subscribers and cut data prices further. By March 2017, the average cost of 1GB of data was down by 20 per cent among incumbents, and if one were to include Jio, the average cost per GB stood at $0.33 or Rs 21 by March 2017.
When it comes to apps and browsers preferred in India, Mary Meeker’s Report shows some even more interesting data. While Google Chrome has 32 per cent of the market share in India, it is beaten by China’s UC Web which has 50 per cent market share. Also India’s top downloaded Android app is WhatsApp, followed by Facebook Messenger. In the top 10 list, four apps are from the US, 2 are from China (these include ShareIt and UC Web), while only two Indian apps are in the list. The Indian apps are JioTV and HotStar.
According to the Mary Meeker’s report, India’s internet usage is seeing strong growth thanks to low data costs, intense competition as well as government policies. The report also mentions Narendra Modi government’s policies, including Digital India, focus on online payments, UPI as well to showcase these have boosted India’s digital revolution. However as the report notes, data is still expensive for majority of people in the country, and so are the devices, despite falling prices.
On the e-commerce side of things, Mary Meeker report notes while Flipkart, Snapdeal, Paytm, Shopclues and Amazon India are all competing aggressively, it is the American giant which is going all out. As the report shows, Amazon India has increased its inventory and sellers, and is seeing a 3X year-on-year growth on this front. The fulfillment centres from Amazon have grown 30 percent year-on-year in India, which shows the scale of investment from the company in the market.
The Mary Meeker report also talks about the Aadhaar trends data, notes that over 82 per cent of the population is covered under this scheme. It also talks about digital payments an Paytm is rapidly ramping up users thanks to offline and online commerce. Also, according to the report, UPI-based payments, allowing for bank-to-bank transfers via mobile stood at $359 million till March 2017.