We believe that India is on the cusp of the second stage of the Internet evolution, where the 3G infrastructure and the payment and delivery models have started to take shape. Ecommerce players have developed viable models of merchandising, settlement and
fulfilment, all of which should lead to a shift in the buying behaviour of consumers towards the online channel.
The primary focus of players in the second stage is likely to include: 1) customer acquisition ? establishing awareness of online shopping options through both offline and online marketing; 2) establishing the acceptance of secure online payment options; and 3) gaining
consumer trust by minimising fraud.
According to the IAMAI, Internet users in India will likely surpass 300mn in 2015, indicating a penetration rate of c24%. We believe the Internet ecosystem in India lags China and Brazil by about six years and Russia by about four years. While broadband penetration in India remains muted (c25mn users vs. >200mn users in China), we expect mobile data usage to compensate for this technological deficit. In fact, India?s model is likely to be unique given that the US and BRIC nations have all witnessed increasing penetration via broadband connections.
