Internet User Base – India growing the fastest but China has significant lead

Internet penetration is one of the major drivers of growth. It has been established now by various researchers that broadband penetration has a more profound effect on economic growth than even the mobile phones.

The global growth in internet usage is close to 8% and most of this growth is driven by emerging markets like India, Vietnam, Africa. The global internet user base is now 1.5 billion.

ComScore is a leading organization that tracks the internet usage across the globe. The chart below from ComScore shows that India is one of the fasted growing internet markets (Only Vietnam @101% growth & Venezula @61% growth are higher than India but in the chart I have ignored them due to lower base). The number of internet users in India are 60 million but since ComScore does not take corporate and cyber cafe usage into account, I would estimate the actual usage to be higher by 30%.

Given the growth and the increasing large base, I am very optimistic for internet based services for India. Apart from eCommerce, I expect services like e-Governance, digital money to prosper in India. Similar predictions can be made about Russia and Italy which are growing very fast as well. The problem with Italy is the broadband speed which is much below the global average.

China is the biggest internet market in the world and no wonder, it has emerged as one of the largest eCommerce market as well ( Taobao has gross revenues of over $30 billion). US which at one point of time had a dominant position in the internet industry is no longer the force it used to be. I would not be surprised if new online business models start to emerge from the countries like China, India and Russia.

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Disclaimer: The views expressed in this article are my personal views and do not reflect the views of my employer.

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