D-Talks:Bulletin#305 – Top Digital Media Updates For CXOs

India planning to set up over 50 e-commerce export hubs

The commerce and industry ministry is working on a plan to set up about 50 e-commerce export hubs over the next five years as public-private partnerships (PPP), two people aware of the development said, amid low presence in e-commerce exports. Ten of these hubs are planned to be built in the current financial year to accelerate merchandise exports through online platforms, they said, requesting anonymity. A regulatory framework for e-commerce exports is expected to be ready by next month, they added. India’s current e-commerce exports are significantly low at a mere $5 BN, as compared with China’s $300 BN. The new model aims to enhance efficiency, reduce logistical bottlenecks and provide businesses, especially small and medium enterprises (SMEs), with infrastructure and support to access global markets more effectively. Setting up e-commerce export hubs would require enhancing logistics, creating large warehousing facilities, and aligning trade facilitation. These export hubs would also help small producers sell to aggregators, who can then find markets for the products. The proposed export hubs are planned to be set up in cities with strong connectivity via road, shipping and airways. No doubt this initiative will benefit our MSME units and other producers of consumer items like apparel and handicrafts, potentially creating jobs. It is crucial to focus on product quality and ensure that the items meet buyer expectations,” said Sanjay Kumar, former principal commissioner of income tax. According to the commerce ministry’s research body India Brand Equity Foundation (IBEF), India’s e-commerce platforms reached a milestone with a gross merchandise value (GMV) of $60 BN in the fiscal year 2023, a 22% increase from the previous year.

BFSI is gearing up for festive season with digital-heavy AdEx

As the festive season dawns upon India, brands rush to put their strategies and plans in place. The last quarter of the year is not just a time for celebration; it is also a critical period for businesses across sectors, with the Banking, Financial Services, and Insurance (BFSI) industry being no exception. Diwali, Navratri, Dussehra, and Christmas—these are not just festivals but economic events that significantly influence consumer behaviour. It is common knowledge that this period is marked by a unique convergence of heightened consumer sentiment, increased disposable incomes, and a cultural inclination toward making significant financial decisions. The significance of this season for the BFSI industry cannot be overstated. Traditionally, it has been a time when consumers open their wallets wider, encouraged by festive bonuses, tax-saving deadlines, and the general atmosphere of optimism and joyfulness. More importantly, it is a time when financial decisions that have been postponed throughout the year are finally made—whether it’s buying a new home, investing in a mutual fund, or securing health insurance for the family. Financial institutions, therefore, gear up months in advance, crafting marketing strategies that are not just reactive but also predictive, aiming to capture the attention of a diverse and increasingly digital-savvy customer base. The Indian Fintech industry is estimated to be at US$ 150 BN by 2025. India has the 3rd largest FinTech ecosystem globally. India is one of the fastest-growing Fintech markets in the world. The AUM of the Indian MF Industry has grown from INR 9.16 TR (US$ 110.63 BN) in 2014, to INR 54.54 TR (US$ 658.72 BN) in 2024, growing ~6x in a span of 10 years. In recent years, the BFSI sector has undergone a transformation driven by digital innovation, changing consumer preferences, and a deeper penetration into Tier II and Tier III cities. This evolution has necessitated a shift in marketing strategies, especially during the festive season. While traditional media like television and print continue to play a role, digital platforms have taken centre stage, offering BFSI brands a direct line to engage with consumers in more personalized and impactful ways. The integration of data analytics, hyper-local marketing, and the strategic use of influencers are now essential tools in a marketer’s arsenal.

Rural areas will be growth driver of internet, smartphone penetration in India

According to a report by the Internet and Mobile Association of India (IAMAI), the number of smartphone users in India is expected to exceed 1 BN by 2025. This surge in smartphone adoption is driving substantial growth in the digital industry. The report highlights that by 2025, around 56% of all new internet users in India will come from rural areas. This shift represents a significant change in the digital landscape, as rural regions become a major source of new internet users. Additionally, the report also notes a notable increase in female participation in technology adoption. By 2025, 65% of new internet users are expected to be female, reflecting an important step toward greater gender parity in digital engagement. Rural areas are predicted to experience the most significant growth in new internet users, with an anticipated increase of 26% by 2025. In contrast, urban areas are expected to see a more modest growth rate of only 10 per cent. This disparity underscores the rapid expansion of internet use in rural areas compared to urban centres. By 2025, the number of internet users in rural regions is projected to exceed 504 MN, while urban areas will have more than 390 MN users.

Low income groups and small cities drive e-commerce

The lowest income segment forms a significant buyer base for e-commerce platforms, according to a recent report. E-commerce platforms are more popular among income groups below Rs 3 lakh per annum, with this segment using them more than other classes, according to a report titled “Assessing the Net Impact of E-commerce on Employment and Consumer Welfare in India” by the Pahle India Foundation. In a slightly higher income group—between Rs 6 lakh and Rs 9 lakh per annum—only 8% of those surveyed used Flipkart and Amazon. The higher income categories also do not seem to use websites such as Myntra, Snapdeal, Nykaa, Ajio, Reliance Digital, and social media platforms. Tier 2 cities seem to be driving a bulk of the sales for the top five platforms. Among respondents within tier 2 cities, 83% used Flipkart, while it was 77% for tier 1 cities.

Gen Z embraces tech: 73% willing to use AI trip planners

India’s Gen Z travellers, those born between 1995 and 2010, are budget-conscious and blend technology and tradition. Almost 70% are likely to travel with family and most are willing to use artificial intelligence (AI) to plan their itinerary, according to a study by Booking.com. “With 65% of India’s population under the age of 35 years, it is crucial to understand the travel sentiment of the Gen Z travellers as they redefine the way we experience the world,” said Santosh Kumar of Booking.com. As many as 73% of Gen Z travellers will use AI trip planners for their itinerary and 68% trust the technology to recommend “off-the-beaten-path” destinations. Moreover, 76% look for tech facilities in their accommodations, such as robotic services or AI-enabled touch points. As many as 35% of Gen Z travellers look at photos taken on trips to bring that “vacation feeling” back. 

Quick commerce companies increase weight that can be delivered per order as consumers opt for larger packs

Quick commerce companies are increasing the total weight which can be delivered per order as consumers have started doing monthly large pack shopping from 1-10 of every month replacing modern retail stores and other e-commerce platforms. Large fast moving consumer goods (FMCG) companies also want to initiate sales of such packs through quick commerce as they do not want to miss out on the sales opportunity. Till now, most quick commerce operators would deliver up to 15 kgs which industry executives said is getting increased to 35 kg or even a little more. Already, Swiggy Instamart has started up to 35 kg delivery on a bike in certain pin codes and Blinkit too has expanded the weight limit, executives said. Edible oil and staples company, Adani Wilmar chief executive officer Angshu Mallick said the company is in talks with the quick commerce companies to launch more large monthly packs such as 26 kgs of non-basmati rice and 5- litre oil jars which consumers are buying from 1st to 10th of every month as part of their monthly shopping routine. An ITC spokesperson said while earlier consumers would largely buy from quick commerce for impulse, indulgence or convenience, this behaviour has evolved over time with people also undertaking monthly grocery shopping. The company has significantly scaled up its presence in quick commerce. We have launched specially curated large packs on quick commerce in line with consumer preference. Large packs such as Aashirvaad atta 10kg pack, Fiama soaps pack of 8, Dark Fantasy 300g and Marie Biscuits 1kg packs are some that are available on quick commerce,” the person said. Quick commerce has become the fastest growing channel for FMCG companies as consumers in large 10-15 cities are increasingly buying here due to convenience, faster and scheduled deliveries, and better discounts. For most FMCG companies, the channel is already 30-40% of their total e-commerce sales. Tata Consumer Products management told analysts recently that almost 35% of its ecommerce business is from quick commerce.

ONDC Launches Digital Loans; MFs, Insurance to Come Soon

The Open Network for Digital Commerce (ONDC), the aggregator platform that runs on open-source technology, is set to launch insurance and mutual fund products in the next two months and will partner with Mastercard for credit cards. ONDC also launched six-minute digital loans offering unsecured credit to salaried and non-salaried customers. “We have deployed a Marine app, one insurer and two more are coming,” said T Koshy, CEO of ONDC. “For health (insurance) also, we are live, but the partner doesn’t have the licence. The motor (insurance) should happen in the next month or so. And mutual funds will go live next month. We want to hit the 100-200 transactions first.” The platform is also looking to incorporate credit cards in its suite of offerings but hasn’t set a timeframe on when it will be launched. “We have a community volunteer programme, if a certain company wants to help build protocol, we hold the reins and understand that we will release it to the public,” said Hrushikesh Mehta, senior vice president for financial services at ONDC. “Just got Mastercard who is now willing to be the volunteer and build protocols for credit card rollout.” Incorporated on December 31, 2021, Open Network for Digital Commerce (ONDC), a Section 8 company, is an initiative of the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, to create a facilitative model that revolutionizes digital commerce, giving greater thrust to penetration of retail e-commerce in India. ONDC launched fully digital and paperless loans which are available in just six minutes. The new offering is integrated with nine buyer applications (also known as Lending Service Providers) and three lenders. The buyer applications include Easypay, Paisabazaar, Tata Digital, Invoicepe, Cliniq360, Zyapaar, Indipe, Tyreplex and Paynearby. The lenders include Aditya Birla Finance, DMI Finance and Karnataka Bank. “By integrating multiple digital systems into a single process, we are simplifying the borrowing experience and expanding credit availability even for remote and underserved regions,” Koshy said. According to the Economic Survey 2024, transactions on the ONDC have surged past 68 MN since its inception in 2022. As of June 2024, it saw a 12% month-on-month growth in transactions to 9.95 MN. In July, ONDC did 12 MN transactions, said Koshy.

Online teaching content creators surge across tier-2 cities in India

Since ‘Digitization’ is rapidly transforming the education sector in India, online education has significantly expanded, especially in Tier-2 cities. This shift is making quality education more accessible to people at the grassroots level, according to a study by Classup, a startup in education technology. Increasing number of content creators in educational content come from Tier-2 cities like Jaipur, Indore, Lucknow, Nagpur and Patna. 78% of Classup’s content creators come from Tier-2 cities. These educators are making a huge impact on the lives of students in very remote areas, like Tier-3 & Tier-4 towns and villages. For many of these students quality education has become a not so distant dream. This is because the costs of online education are becoming cheaper. In 2023 alone students attempted to solve more than 400 crore questions through apps. This indicates massive reliance on digital platforms for quality education. Classplus’s content creators are now reaching over 5 crore students across more than 3000 cities in India. By leveraging technology, teachers from Tier-2 cities are bringing quality education to the doorsteps of students who would otherwise have limited opportunities.