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Digital India: The Coming Consumer Internet

October 23, 2012
In This Interview
Arvind Subramanian, Partner & Managing Director

Career Highlights

Arvind Subramanian is a partner and managing director in BCG’s Mumbai office. He has worked primarily with industrial goods and technology clients on issues of strategy, operations, and organization. In addition, Subramanian is leading BCG’s ongoing research on the next billion consumers.

Before joining the firm, Subramanian was an officer with the Tata Administrative Service in India, the central management cadre of the Tata Group.


India, a trailblazer in the mobile market but an Internet laggard, has reached an important crossroads in its online life. Although Internet penetration is still only about 10 percent, the number of Internet users recently passed the 120 million mark, and demand is accelerating. With 350 million users expected by 2015, the next few years will be a formative period for consumer attitudes and for new products and services. To get an idea of what lies ahead, BCG’s Center for Consumer and Customer Insight surveyed more than 4,500 consumers in 27 Indian cities late last year, supplementing the findings with additional research last spring. Mumbai-based BCG partner Arvind Subramanian discusses the results.

Is the Internet spreading beyond India’s top-tier cities?

Most definitely. As you’d expect, penetration is highest in major metro areas, but that’s because of how access was rolled out. When you look at demand, nearly 60 percent (as measured in aggregate Internet hours consumers report they consume) already lies outside the largest cities, and it is the midtier towns that will drive growth. For 2015, we project a four-fold growth in Internet hours, with nearly 40 percent of demand coming from tier 4 towns and rural areas; 22 percent coming from tier 1, 2, and 3 cities; and about 38 percent coming from metro areas.