Rural India is a fascinating sector for e-commerce companies, and it is all set to receive a further boost.
In the Union Budget 2018, which was presented yesterday, Finance Minister Arun Jaitley announced that the central government would set up five lakh WiFi hotspots which would provide broadband access to five crore rural citizens.
This initiative is a part of BharatNet, the government’s ambitious scheme, to connect the country’s villages with a high-speed optical fibre network, and it has allocated Rs 10,000 crores for this purpose.
Phase 1 of BharatNet connected one lakh gram panchayats and enabled broadband access to over 20 crore rural Indians in about 2,50,000 villages.
This announcement is of particular significance for e-commerce companies, as rural India is driving the growth of the industry itself. Major players like Amazon and Flipkart are all focusing on getting the small-town Indian consumer to shop online, and the focus seems to be working.
According to RedSeer Consulting, an advisory firm, shoppers in Tier II and smaller towns grew three-fold compared to metro shoppers and accounted for nearly 41 percent of the overall online shoppers in 2017.
The same study also estimates that residents from non-metro cities will account for 55% of all 185 million online shoppers, in 2020, and that e-commerce firms in India had a 33% rise in monthly active shoppers in 2017; 20 million as opposed to 15 million in 2016.
E-commerce firms entice rural customers with lucrative schemes. While Flipkart’s no-cost EMI scheme is for customers who don’t have a credit card, Amazon’s assisted e-commerce initiative, Udaan, allows customers to buy on Amazon through offline shop-keepers.
Since most tech-company products cannot function in areas without or with poor network coverage, this move by the Government is a game-changer.
However, there is more than what meets the eye, according to Jasminder Gulati, who told YourStory, that people in rural areas have internet access. While working in Soda, a remote village in Rajasthan, he noticed that pretty much everyone has a smartphone and at least 1 GB data, but are not gainfully employed. He opined that going beyond access when it comes to digitisation, and merging it with livelihood, would genuinely help these people.
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The plan, of the Union Budget, to empower rural India with Wi-Fi should open new opportunities, for e-commerce companies, and the people in those areas as well.