India's $350b m-commerce opportunity

Tarik Husain/Sybase 365
15 Dec 2011
A colleague of mine recently travelled to Mumbai, India for the Mobile Money Southern Asia Conference & Expo, and returned to Singapore full of new insights into the subcontinent’s booming mobile payments market.
India is set to become the world’s most populous country in 2030. Currently second only to China in population – the South Asian nation grew by 18 million in the past decade alone. With 1.21 billion people, India’s population is now nearly equal to the combined populations of the United States, Indonesia, Brazil, Japan, Bangladesh, and Pakistan.
According to Boston Consulting Group, there are already 771 million mobile subscribers in India, with 548 million considered to be active, compared with the 240 million people holding bank accounts. Most of the people in urban India have bank accounts but 90-95% still mostly use cash for their day to day needs.
While mobile commerce might be still nascent in the country, there is a tremendous opportunity in servicing both urban elites and the large numbers of the un- and under-banked in rural India via the mobile channel.
BCG’s analysis suggested mobile payment and banking transactions would reach $350 billion by 2015, measured against approximately $235 billion of credit and debit card purchases at present. Peer-to-peer remittances are expected to deliver $70 billion by 2015, mostly as people in metropolitan hubs transferring funds to their families in rural areas.
Transaction volumes and fees might be small, but anticipated economies of scale have triggered a wave of notable alliances between banks and telco operators in India. (WARC noted the following recent partnerships: Bharti Airtel with the State Bank of India, Vodafone and ICICI Bank, Idea Cellular and Axis Bank.)


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