With e-commerce making up just 4% of the retail market, most of the population still yet to be exposed to digital disruption, and a start-up ecosystem only a decade old – India might seem like an unlikely location for fintech innovation.
Yet, in May, Indian company Flipkart became the world’s largest e-commerce acquisition of all time, with Walmart paying $16 billion for the online retailer. This incredible deal shocked the markets but would appear to be a signal that India is poised to become the next leader in fintech, thanks to some unique macroeconomic conditions. In fact, Indian fintech software is projected to become a $2.4 billion market by 2021, doubling in size since 2016 when it was just $1.2 billion.
As Walmart’s CEO stated at the time, India is one of the most attractive markets in the world because of its size and growth rate. It is the world’s third-fastest growing economy, and while digital adoption is currently relatively small it is likely to explode, with projections of rapid smartphone adoption over the next decade. By 2021, the number of networked devices in the country is expected to reach two billion and India is expected to have around 829 million internet users, more than double the number it had in 2016.