How India and China Will Dominate Global IT Commerce

How India and China will dominate global IT commerce

The International Data Corporation (IDC) estimates that in 2013, IT spending will increase in emerging markets by 8.8 percent, accounting for about 34 percent of IT spending worldwide. Growth in these markets represents 50 percent of all new growth in IT commerce. Productivity catches on, increasing assimilation into the worldwide market, progressive macroeconomic policies, burying the center class and better health and education are shifting economic power worldwide to developing countries, especially India and China.

India and China will dominate IT Commerce within the approaching years and here are the explanations why:

India and China account for 38 percent of the world's population and population penetration of it's faraway from saturated. Data from the United Nations/ International Telecommunications union shows that population penetration of Internet in China is about 42 percent, which of India could even be a mere 11 percent. The projected growth of Internet users in China is 10 percent year-on-year, which of India could even be a whopping 26 percent year-on-year. the info clearly shows the massive IT growth and investment opportunities in India and China.

India and China even have an enormous demographic advantage compared to the remainder of the world that features a rapidly aging population. China has absolutely the best number of working age individuals within the earth . At its current rate of increase , its working age population will peak in 2016. India's working age population is steadily rising and should peak around 2039.

How does this help India and China dominate IT commerce? a search by Accenture found that India and China calve activists and thus the world's deepest users of corporate information technology. The survey shows that young Chinese within the workforce spend 34 working hours hebdomadally on technical communication tools, compared to 11 hours spent on the typical by the rest of the world . Chinese youth also spend 5.1 hours shopping on the web and 5.3 hours within the virtual world. this is often often often in contrast to the quality 1 hour and 0.4 hours spent respectively on these activities by the remainder of the world . Current data thereon commerce in India and China:

FlipKart is currently the foremost important online retailer in India with estimated annual revenue of over 64 million pounds. the situation has 7.4 million unique visitors per month and is growing at 431 percent annually. Snapdeal, another online retailer, comes during an in depth second at 6.9 million unique visitors per month. Among online travel sites in India, IRCTC (Indian Railways), MakeMyTrip and Yatra are the foremost visited.

On the infrastructure end, the Indian Ministry of Communications and it's launched an enormous project that when completed will connect 250,000 Gram Panchayats (local self-governments at the village or village level) across the country through 100 Mbps of glass fiber cables. Once implemented, this digital highway will pave the way for huge e-commerce growth in smaller towns and villages, as two-thirds of India's population reside in rural areas.

Its e-commerce sector grew by 45.3 percent year-on-year, consistent with figures published by China's Ministry of Industry and Knowledge Technology (MIIT), increasing revenue by £ 52 billion within half 2013. Consumption of knowledge products and services grew at a rate of 20.7 percent to £ 22 billion.
Challenges:

For continued dominance in IT Commerce, spending power is that the key. For this, the economies of both India and China must still grow at an above average rate. There are several challenges that both countries need to be address to require care of this rate of growth. Their topmost concern is resources like water, energy and food to support their growing population. Another concern is that the likelihood of concentration of wealth among high-income households.

A challenge specific to China is its one child policy to curb increase . because of this policy, China's working-age population will peak by 2016 and China will join the ranks of aging nations by 2020. albeit it'll still be an economic powerhouse, its economic dominance will gradually decay unless it addresses the problem .

Some of the challenges for India especially include poor infrastructure, corruption, inefficiency and restrictive labor laws. India may have a democratic government, but bureaucracy severely compromises its governance capacity. India should make a focused effort to show its youth to use their favorable demographics.

What does this mean for US and Europe?
IT companies across US and Europe are already tapping into the massive revenue potential from these emerging markets.

Amazon entered the Indian market in June 2013 by launching amazon.in. the company is actively stepping into tie-ups with local retailers and internet portals like Croma and Gadgetsguru to make its user base.

Social networking giant Facebook generated £ 159 million in 2013 revenues of £ 1.2 billion from the Asian market. India is that the fastest growing small and commercial marketplace for Google AdWords. Google India reported revenue of £ 116 million for the quarter ended March 2012, a rise of 36 percent from its previous filing. Whereas, Google's AdMob unit has 10,000 registered developers in China. Its servers receive 7.9 billion requests a month to point advertisements to mobile-app users within the country.

According to CyberMedia Research, Microsoft's revenue in India is about 640 million pounds annually, 90 percent of which is from domestic sales and thus the remainder from exports. While China has been a piracy trap for Microsoft, the company hopes to make its comeback in China with the launch of Windows Azure's own cloud computing platform in partnership with neighborhood company 21ViaNet.

China and India are the second and third largest Asian markets, respectively, for French three-dimensional modeling software manufacturer Dassault Systems. While the French company doesn't provide a national breakdown of revenue figures, it does show that the Asian region brought in 27 percent of its E1.78 billion revenue last year.

According to the most recent International Bank for Reconstruction and Development report, India and China will dominate global saving and investment by 2030. In IT, India and China will capture quite 50 percent of IT spending because of their oversized share of industry growth. While China is already dominating IT Commerce because of domestic demand, India is just starting out. China will still dominate the market till the mid-2020s, when India will take over as demographic trends shift in its favour.
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