A highly competitive telecom battleground that offers some of the cheapest mobile tariffs in the world and a marked move by the government away from paper cash to digital currency makes India the biggest growth market for smartphones, research reveals.
As the second most populated country in the world, India took a significant step away from paper cash following the government’s controversial and unprecedented demonetization drive in November 2016. The move rendered 86% of all Indian paper money in circulation obsolete, overnight.
The sweeping reform was introduced by the government as a means to tackle money laundering and hoarding. Further, it was the strongest indicator of a government encouraging the use of digital cash over paper money. The demonetization drive has also fueled in surge in adoption of cryptocurrencies like bitcoin among Indians.
The government’s marked effort to encourage (and track) digital payments is set to trigger a surge in smartphone adoption, according to research firm Gartner.
While Indian citizens are increasingly turning toward using digital payment method research indicates that ‘users are willing to spend more to get a smartphone with better features than simply rushing for lowest price smartphones.’
Notably, the report adds:
The rise of digital currency is bringing a new use case for smartphones, which, in turn, is set to trigger higher demands for smartphones. This opens the opportunity for service providers to launch mobile wallet solution or even vendors to launch their exclusive mobile payment solutions like Android Pay or Apple Pay to build an ecosystem.
Mobile wallet usage has soared among Indians following the demonetization exercise. FinTech platform PayTM, which runs a mobile wallet, saw traffic increase by 435% with a 250% increase in overall transaction numbers and value. At one point, India had been adding a million mobile wallet users every day.
“There might be few POS machines, but most of them have smartphones, which have become the new medium of payment,” revealed Bipin Preet Singh, founder and CEO of MobiKwik, another mobile wallet provider.
As of 2016, smartphones accounted for 50% of overall mobile phone sales in India. That number is expected to swell to 62% of all mobile phone sales in 2018.
Gartner research director Anushul Gupta added:
With the slowdown in sales in major markets, including the U.S., China and mature Western Europe, India represents the largest opportunity because it is the second-largest mobile phone market in China.
The research arm of the Reserve Bank of India – India’s central bank – published a whitepaper at the turn of the year with researchers affirming that blockchain technology had matured enough to support the digitization of the Indian rupee, the nation’s fiat currency.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:55 AM UTC