Digital India: Small Towns Going Digital

It used to be that big cities offered significantly better opportunities and higher standards of living in India. This gap is being narrowed by the digital economy today. 

The small towns of India are becoming increasingly digital. Affordable smartphones, mobile data revolution accelerated by Jio and then Covid have given digitisation in small towns and villages a massive push. On a recent visit to a small town in Bihar, I was struck by how pervasive digital touchpoints were. 

Women @ Work

I met a few women over the age of 40 who were doing paid work for the first time in their lives. They worked part-time, from home and completely online. They spoke of how work has redefined their lives, bolstered them financially and emotionally. It was fascinating to watch an erstwhile homemaker in Bihar train a folk artist in Andhra Pradesh to start online art classes over zoom. Her confidence and enthusiasm were a demonstration of latent potential of millions of housewives in India. 

With the Female participation in Labour Force declining to 21%, India lags abysmally in creating a conducive environment and providing suitable employment opportunities to its women. About 348 million women of working age who could be economically productive are unable to be so. To what extent can the digital economy bridge the gender gap in employment? Online jobs have the potential to include many women who cannot leave their homes for work. With majority of our population living in smaller towns and villages, the digital economy must reach deep into these regions.

Phones Entertain

What struck me was how rapidly mobiles were overtaking television as the primary entertainment medium. In a household with people across all age groups, television was switched on sporadically and mainly for news. Mobile phones were the primary source of entertainment. Some watched serials, fewer watched movies. 

Small Indian towns have become growth drivers for streaming platforms, contributing to nearly 40% of overall consumption across video-on-demand services. Amazon has reported two out of three new Prime signups coming from Tier II and III cities in 2021. A newly launched OTT platform, Gudsho, focuses mainly on smaller cities.

At a family reunion after years, people had to remind each other to put away their phones and talk. Youngsters were on their phones all the time. With work and study taking place online, one didn’t know when to interject. Adults and children both spent at least an hour on games on their mobiles. 

Phones often were a part of conversation among family members, be it looking at someone’s Instagram feed or discussing an update that had been posted on Facebook. Siblings negotiated with each other and elicited favours in exchange for mobile data.

Beyond Cash

Over 300 million smartphone users in India are using digital payments and small towns have leapfrogged in this area. Digital payments are ubiquitous in the town – in shops, on highways, between people. The stress of carrying cash around was significantly reduced. Elderly and those not fluent with internet depended on digitally savvy family members.

The digital payments (and fintech overall) growth is highlighted in what digital payment companies are reporting. PhonePe, one of the largest digital payment companies in India, records 80% of its transactions from smaller towns. More than 2/3rds of its insurance offerings are purchased by customers in tier III towns and beyond.Digital payments can access areas that banks could not. They are critical to achieving financial inclusion in the country.

Retailing Online

Online ordering is mainstream activity. I was quite surprised to find that Burger King was around the corner and online ordering was common parlance. Covid has led to multifold increase in demand for doorstep deliveries in small towns. Amazon reported 65% of customer orders and 85% of new customers in 2021 coming from Tier II towns and below. Flipkart also reported nearly half of all orders coming from Tier III cities and beyond.

Even regular FMCG purchase and consumption is getting influenced by digital. I observed customers at small local grocery shops. Coupons for free mobile data influenced many purchases of FMCG products.

It is incredible to see how #digital is transforming small town India. This is when internet penetration is only 50% in India. In 2021, there are 845.68 million internet users in India. Active internet users are likely to multiply manifold, especially with affordable Jio phone launching soon. 
Are obsessive discussions on privacy, echo chambers, social media agendas, screen addiction influenced by issues of the privileged? For a vast majority, the digital world can open up opportunities that they wouldn’t have thought possible. So, is digital good or bad?

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