90% of Consumers are Connecting More to Virtual World: EY Digital Consumer Survey

Indians are raising the bar on data consumption. The world’s largest consumers of data show no signs of abating. At northward of 11GB per user per month, a 30% spike in usage amid COVID-19 has pushed data consumption two to three years into the future - where virtual is the new real.

The radical shifts in consumption are here to stay. The new normal rides on increased optimism towards a more digital way of life. This is according to EY’s Digital Consumer Survey: shaping the new normal which analyzes views of 2,600+ consumers to highlight the changing behavior and perception toward digital services.

Five levers leaping consumers to a virtual life

1. High-speed broadband to be the pulse of virtual world

The spike in data consumption is in line with the findings of the survey. The survey reveals, nearly 33% respondents upgraded broadband plans for higher data packages. Interestingly, unlimited plans accounted for 40% of total upgrades, underlining the growing confidence to do more digitally.

Many basic users, i.e., those using data only for thin web-browsing, chatting and calling are migrating to high user bucket. Nearly 11% of basic data users upgraded their existing packs to either unlimited or 50%-100% higher data to do more of content streaming, gaming and video calling.

With remote working, it has increasingly becoming commonplace to adopt video conferencing and productivity tools. The survey reveals that as many as 76% respondents are either first timers or have increased the time they spent on video calling.

The reality: the demand for high-speed broadband with increasing remote working population will only spiral to support use of data-intensive tools. As work from home or remote working becomes a reality, the need for stable, high speed internet becomes even more critical.

2. Evolving content consumption habits likely to be everlasting

The survey highlights, 90% respondents are spending more time on digital activities such as content streaming, e-learning, infotainment and social media. The digital makeover in content consumption is underway - evolving in new dimensions as expectations of digital consumer are being driven by intuitive and convenient experiences.

Nearly 61% consumers are streaming more content than they were before the lockdown. Market realties corroborate with the survey findings. Time spent on video streaming has surged 1.2x to average 4.2 hours per user per week.

On demand is in demand. Sixty-percent respondents prefer subscription-based video on demand, while 20% prefer TV entertainment. Nearly 50% of respondents who prefer TV, are spending more time watching movies, shows and news telecast.

The reality: while technology is empowering digital consumers by providing them more choices, relevance of content is paramount. Internet streaming is turning into a competitive medium for content delivery and advertisements exhibit potential. Digital ad spends are likely to exceed over US$8.0b and grow at a Compound Annual Growth Rate (CAGR) of 27% between 2019-2025<1> as digital has the potential to be the fastest growing segment across the mediums.

3. Online education gaining steam to empower a quarter of India’s population

The integration of digital with education is giving a new dimension to the standard of education. The crisis led to emergence of a new breed of digital learners who are adopting technology faster than ever. The flexibility to learn, access the content, virtual classrooms and use of digital tools are reshaping traditional ways of delivering education.

According to the survey findings, e-learning has emerged as the third most-performed digital activity in the past weeks. Nearly 59% respondents are learning online. The preference for learning on digital platforms is here to stay. Nearly 50% respondents prefer learning on EdTech platforms over accessing learning material scattered on web portals.

The reality: the move toward digital learning is set to have a positive impact on the lives of 320 million students<2>. The integration of technology into the classroom experience has the potential to bring unprecedented benefits. With that, scaling network connectivity and access to technologies in far flung rural hinterlands is an opportunity to drive radical socio-economic gains. In times to come, personalized, automated learning services to deliver tailored individual learning take precedence. Digital education holds paramount importance to scale, engage and build next-gen skills in a virtual world. The online education market is racing ahead, expanding at a CAGR of 43.8% from 2019 to reach US$4.8b by 2024<3>^,<4>,<5>.

4. Pacing ahead to a less cash economy

The pandemic has accelerated transition to less cash ecosystem. In the recent weeks, overall surge in consumer traffic on digital payment channels is offsetting the decline in transaction volume resulting from reduced consumption.

Digital platforms are gaining strength as a preferred medium for most purposes, and the survey findings highlight the tailwinds driving adoption. Nearly 38% respondents started using digital payments for the first time. Digital wallets stand strong, with 53% respondents making payments through e-wallets. In fact, telecom operators strategies to monetize digital payments is structurally positive, with 12% respondents leveraging self-care applications for payments.

The reality: new payment channels bundled with cashback and promotional offers are adopting effective customer retention strategies to drive stickiness. The new normal is an opportunity to transition to a less cash economy with the adoption of digital payments scale for consumers across all walks of life. Innovation in business models will pave the way for greater collaboration between industries, banks and fintech for new service propositions. The market is poised for a growth with the digital payment transaction value forecasted to double from 2019 to touch US$135.2b in 2023<6>.

”Digital consumption patterns are evolving in exciting ways. The access and speed to real-time engagement is driving digital adoption to the next level. The new normal is all about creating hyper-personalized and connected experiences for a digital consumer. Now is the time for business models to change and capture a larger share of customers’ wallet and attention. Ecosystem collaboration and partnerships assume importance to increase field of play in emerging growth avenues of education, healthcare and entertainment. The digital services industry is poised for growth, and the right accelerators will go a long way in enabling the lives of 1.3 billion Indians with a click and tick”, says Prashant Singhal, Emerging Markets TMT Leader at EY

5. Customer experience delivered anytime, anywhere

The digital consumer expects speed, agility and self-service, virtually. Omnichannel is the new channel when it comes to managing customer journeys. The interactions on digital mediums are serving more than just a bridge to traditional call centers. According to the survey, nearly 50% of the service requests were raised through chatbots, self-care applications and social media platforms. The change is here to stay. Nearly 70% respondents have indicated preference toward online chats through mobile apps or outreach through instant messaging platforms for service requests. Thirty-percent users indicated preference for digital Frequently Asked Questions (FAQs) or self-help tutorials and videos for troubleshooting. With that, digital trust will matter. Nearly, 51% respondents cited privacy concerns as a top barrier to adoption of digital services.

Now is the time to build the digital bridge and accelerate shift to customer experience transformation hub.

“The new normal is about embedding hyper-personalized and connected experiences for a digital consumer. The move to lean contact centers, conversational Interactive Voice Response (IVRs), cognitive chatbots, social media command centers and improved self-care functionalities can go a long way in driving cost and value benefits”, says Prashant Singhal, Emerging Markets TMT Leader at EY