A surge in Internet connectivity in rural India, home to about 870 million people, will lead much of the nation’s e-commerce activity to move into regional areas during the rest of the decade, according to a report by Boston Consulting Group (BCG).
The number of Web-connected rural consumers will more than double to 315 million by 2020 from 120 million last year, fueled by inexpensive smartphones, the consultant said in a report released yesterday.
Such a surge is expected to be a boon for e-commerce and boost companies, such as Flipkart Ltd and Amazon.com Inc, as well as Facebook Inc and Alphabet Inc’s Google, which are charting a path to India’s countryside after focusing on urban areas.
By 2020, about half of all the nation’s Internet users will come from rural areas, BCG said in the report.
The report cites efforts by Alibaba Group Holding Ltd (阿里巴巴) to reach consumers in regional China as a model for tapping rural spending.
The Chinese e-commerce operator has outposts in almost 16,000 villages, where it provides computers and free Web services and gives locals a place to pick up goods they order online, pay bills and book travel, the report said.
BCG said its study surveyed 4,000 rural consumers in 27 villages in 14 of the country’s 29 states.
Currently, rural Internet users are 98 percent male. That differs from urban areas, where 79 percent of users are male and 21 percent female.
Of the rural Web users, nearly 70 percent access social networks, which are their most popular online destination. There they download media, search for information, chat and e-mail.
Separately, Indian Minister of Finance Arun Jaitley has approved a proposal that clarifies how Apple Inc could open stores in the fast-growing economy without initially having to source components locally, people familiar with the matter said.
Jaitley ratified a proposal that gives the information technology ministry the power to label a retailer of a single brand as a provider of cutting-edge technology, the people said. Such a classification would give Apple a three-year exemption from rules that force some foreign retailers to procure 30 percent of components in India, they said.
The company makes most of its goods in China.
The maker of iPads and iPhones can now reapply to open stores in the nation with greater odds of winning the waiver because of the latest decision, the people said.
An earlier application failed to get the exemption after a finance ministry department hesitated to take a call on whether Apple products are cutting edge.
The latest step is an effort to clear up that confusion, the people said.
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