Latest news with #McKinsey&Company
Time of India
3 days ago
- Business
- Time of India
Only 20-25% of India's 850 mn internet users shop online, shows untapped potential: McKinsey Report
India's e-commerce sector is set for significant growth in the coming years, according to a report by McKinsey & Company. The report noted that only 20-25 per cent of India's 850 million internet users shop online. This is much lower as compared with mature markets like the United States and China, where over 85 per cent of internet users make purchases online. The report said, "Out of the country's 850 million internet users, only about 20 to 25 per cent shop online". The report also highlighted that India has seen a strong rise in e-commerce activity over the past few years. The country is not just catching up as a fast adopter of online shopping but is also emerging as an innovator in the field. This is especially visible in the rapid growth of quick commerce platforms that deliver goods in a very short time. However, e-commerce still accounts for only 7 to 9 per cent of India's total retail sales as of fiscal year 2023. This share is expected to more than double to between 15 and 17 per cent by 2030, showing the huge potential for expansion. New business models are changing the shape of the e-commerce industry in India. Quick commerce and social commerce together make up more than 15 per cent of the e-commerce market today. Their share is expected to exceed 25 per cent by 2030. E-commerce companies are also finding new ways to serve consumers. They are expanding into new categories such as instant bookings for domestic services, professional help, and even medical aid. The next wave of growth in Indian e-commerce is likely to come from two main factors. One is the increasing entry into new segments like B2B (business-to-business) commerce and building materials. The other is the rising demand from tier-two and tier-three cities. These cities are seeing faster income growth than metro and tier-one cities. Monthly incomes in tier-two cities grew by 18 per cent between 2023 and 2024, which is higher than the growth seen in bigger cities. The report suggested that e-commerce in India will go beyond simply disrupting traditional retail. It is expected to reshape the entire retail system, including areas like last-mile delivery and logistics.
Time of India
3 days ago
- Business
- Time of India
Only 20-25% of India's 850 mn internet users shop online, shows untapped potential: McKinsey Report
New Delhi: India's e-commerce sector is set for significant growth in the coming years, according to a report by McKinsey & Company. The report noted that only 20-25 per cent of India's 850 million internet users shop online. This is much lower as compared with mature markets like the United States and China, where over 85 per cent of internet users make purchases online. The report said, "Out of the country's 850 million internet users, only about 20 to 25 per cent shop online". The report also highlighted that India has seen a strong rise in e-commerce activity over the past few years. The country is not just catching up as a fast adopter of online shopping but is also emerging as an innovator in the field. This is especially visible in the rapid growth of quick commerce platforms that deliver goods in a very short time. However, e-commerce still accounts for only 7 to 9 per cent of India's total retail sales as of fiscal year 2023. This share is expected to more than double to between 15 and 17 per cent by 2030, showing the huge potential for expansion. New business models are changing the shape of the e-commerce industry in India. Quick commerce and social commerce together make up more than 15 per cent of the e-commerce market today. Their share is expected to exceed 25 per cent by 2030. E-commerce companies are also finding new ways to serve consumers. They are expanding into new categories such as instant bookings for domestic services, professional help, and even medical aid. The next wave of growth in Indian e-commerce is likely to come from two main factors. One is the increasing entry into new segments like B2B (business-to-business) commerce and building materials. The other is the rising demand from tier-two and tier-three cities. These cities are seeing faster income growth than metro and tier-one cities. Monthly incomes in tier-two cities grew by 18 per cent between 2023 and 2024, which is higher than the growth seen in bigger cities. The report suggested that e-commerce in India will go beyond simply disrupting traditional retail. It is expected to reshape the entire retail system, including areas like last-mile delivery and logistics.
Economic Times
3 days ago
- Business
- Economic Times
Only 20-25% of India's 850 mn internet users shop online, shows untapped potential: McKinsey Report
Synopsis A McKinsey & Company report indicates significant growth for India's e-commerce sector. Currently, only 20-25% of Indian internet users shop online, but this is expected to rise substantially. E-commerce accounts for 7-9% of total retail sales, projected to more than double by 2030, driven by new business models, expansion into new categories, and rising demand from tier-two and tier-three cities. ANI Representative image. India's e-commerce sector is set for significant growth in the coming years, according to a report by McKinsey & report noted that only 20-25 per cent of India's 850 million internet users shop online. This is much lower as compared with mature markets like the United States and China, where over 85 per cent of internet users make purchases report said, "Out of the country's 850 million internet users, only about 20 to 25 per cent shop online".The report also highlighted that India has seen a strong rise in e-commerce activity over the past few country is not just catching up as a fast adopter of online shopping but is also emerging as an innovator in the field. This is especially visible in the rapid growth of quick commerce platforms that deliver goods in a very short time. However, e-commerce still accounts for only 7 to 9 per cent of India's total retail sales as of fiscal year 2023. This share is expected to more than double to between 15 and 17 per cent by 2030, showing the huge potential for business models are changing the shape of the e-commerce industry in India. Quick commerce and social commerce together make up more than 15 per cent of the e-commerce market today. Their share is expected to exceed 25 per cent by 2030.E-commerce companies are also finding new ways to serve consumers. They are expanding into new categories such as instant bookings for domestic services, professional help, and even medical next wave of growth in Indian e-commerce is likely to come from two main factors. One is the increasing entry into new segments like B2B (business-to-business) commerce and building materials. The other is the rising demand from tier-two and tier-three cities are seeing faster income growth than metro and tier-one cities. Monthly incomes in tier-two cities grew by 18 per cent between 2023 and 2024, which is higher than the growth seen in bigger report suggested that e-commerce in India will go beyond simply disrupting traditional retail. It is expected to reshape the entire retail system, including areas like last-mile delivery and logistics.
Indian Express
4 days ago
- Business
- Indian Express
‘Insurance industry on track to more than double, set to hit Rs 25 lakh crore by 2030'
India's insurance sector is projected to witness robust expansion, with gross underwritten premiums (GWP) expected to more than double — rising by 123 per cent to Rs 25 lakh crore by 2030 from Rs 11.2 lakh crore in 2024, according to a report by the Insurance Brokers Association of India (IBAI) and McKinsey & Company. This surge is likely to lift insurance penetration from the current 3.7 per cent to 5 per cent, bringing India closer to the global average of 6.8 per cent recorded in 2023. Between FY 2020 and FY 2024, the industry saw strong double-digit growth, with total premiums across life and non-life segments increasing from Rs 7.8 lakh crore to Rs 11.2 lakh crore, the report said. 'India's insurance sector is entering a new era of opportunity, with the potential to more than double by 2030,' said Narendra Bharindwal, President, IBAI. The report said the retail segment could attain GWP of around Rs 21 lakh crore by 2030, of which over 90 percent is driven by the life segment. 'Around 65 per cent of the retail opportunity is present at the extreme ends of the customer pyramid-the ultra-high-net-worth individuals (UHNI) and high-net-worth individuals (HNI) at one end, and the mass-market customers at the other end,' it said. The intent to buy insurance is missing, despite awareness, the report said. In the retail segment, among affluent and ultra-high-net-worth and high-net-worth customers (UHNI and HNIs are individuals with household personal financial assets over Rs 8.5 crore), 60 per cent customers believe that their ideal life insurance cover should be 10 times their salary, yet only 30 per cent have this cover. Similarly, in the institutional segment, 70 percent micro and small enterprises purchase insurance because of regulatory or client mandates. 'By 2030, UHNI and HNI customers could account for around 20 per cent of the total projected retail insurance value pool, while the mass-market segment is expected to account for nearly 45 per cent,' the report said. While nearly 70 per cent of affluent and UHNI / HNI retail customers purchase insurance on the recommendations of trusted advisors, 45 per cent of mass market customers rely on the recommendations of friends and family, it said. The claims experience is a key differentiator in the insurance journey. As many as 50 per cent of affluent and HNI+ customers considered switching their insurers or channel of purchase and nearly half of them switched due to dissatisfaction with the claims process. Similarly, over 55 per cent of SMEs have had their claims rejected, and over 75 per cent seek assistance with documentation and paperwork in the claims process, the report said. 'These segment-specific insights are derived from the IBAI Insurance Insights Survey, which reveals the behaviour and pain points of 2,500 retail customers,' the report said. GWP for the institutional segment, largely in non-life insurance, is expected to grow nearly three times to reach Rs 2.8 lakh crore by 2030. 'While the SME segment currently has a contribution of only close to 10 percent, it is expected to grow the fastest. Around half of the total SME opportunity lies in clusters across 17 Indian cities, in nearly 10 leading, capital-intensive industries such as textiles, automotives, pharmaceuticals, and industrial goods,' the IBAI-McKinsey report said. This segment lacks the intent to buy insurance, often because the enterprises do not entirely believe it is critical, and because lack of guidance and handholding, as well as persistent margin pressure cause them to deprioritize it, it said. The IBAI survey revealed that when SMEs do buy insurance, it is driven by the need to comply with regulatory and client mandates. 'They lack internal risk-management expertise, seeking advisory and guidance, products tailored to their needs, and support on documentation and claims processes. Equipping them to foresee their risks and empowering them through products customized at the sector level could draw them into the fold of insurance protection,' it said.
The Star
7 days ago
- Business
- The Star
Spy cockroaches and AI robots: Germany plots the future of warfare
MUNICH/BERLIN/FRANKFURT: For Gundbert Scherf – the co-founder of Germany's Helsing, Europe's most valuable defence start-up – Russia's invasion of Ukraine changed everything. Scherf had to fight hard to attract investment after starting his company – which produces military strike drones and battlefield AI – four years ago. Now, that's the least of his problems. The Munich-based company more than doubled its valuation to US$12bil (RM 50.60bil) at a fundraising last month. "Europe this year, for the first time in decades, is spending more on defense technology acquisition than the US," said Scherf. The former partner at McKinsey & Company says Europe may be on the cusp of a transformation in defence innovation akin to the Manhattan Project – the scientific push that saw the US rapidly develop nuclear weapons during World War Two. "Europe is now coming to terms with defense." Reuters spoke to two dozens executives, investors and policymakers to examine how Germany – Europe's largest economy – aims to play a central role in the rearming the continent. Chancellor Friedrich Merz's government views AI and start-up technology as key to its defence plans and is slashing bureaucracy to connect startups directly to the upper echelons of its military, the sources told Reuters. Shaped by the trauma of Nazi militarism and a strong postwar pacifist ethos, Germany long maintained a relatively small and cautious defence sector, sheltered by US security guarantees. Germany's business model, shaped by a deep aversion to risk, has also favoured incremental improvements over disruptive innovation. No more. With US military support now more uncertain, Germany – one of the biggest backers of Ukraine – plans to nearly triple its regular defence budget to around €162bil (RM 802.11bil or US $175bil) per year by 2029. Much of that money will go into reinventing the nature of warfare, the sources said. Helsing is part of a wave of German defence start-ups developing cutting-edge technology, from tank-like AI robots and unmanned mini-submarines to battle-ready spy cockroaches. "We want to help give Europe its spine back," said Scherf. Some of these smaller firms are now advising the government alongside established firms – so-called primes such as Rheinmetall and Hensoldt – that have less incentive to focus primarily on innovation, given their long backlogs for conventional systems, one of the sources said. A new draft procurement law, approved by Merz's cabinet on Wednesday, aims to reduce hurdles for cash-strapped start-ups to join tenders by enabling advance payment to these firms. The law would also entitle authorities to limit tenders to bidders inside the European Union. Marc Wietfeld, CEO and founder of autonomous robots maker ARX Robotics, said a recent meeting with German defence minister Boris Pistorius hammered home how deep the rethink in Berlin goes. "He told me: 'Money is no longer an excuse – it's there now'. That was a turning point," he said. Germany in the lead Since Donald Trump's return to the political stage and his renewed questioning of America's commitment to NATO, Germany has committed to meet the alliance's new target of 3.5% of GDP on defense spending by 2029 – faster than most European allies. Officials in Berlin have emphasised the need to foster a European defence industry rather than rely on US companies. But the hurdles towards scaling up industry champions in Germany – and Europe more broadly – are considerable. Unlike in the United States, the market is fragmented in Europe. Each country has its own set of procurement standards to fulfill contracts. The United States, the world's top military spender, already has an established stable of defence giants, like Lockheed Martin and RTX, and an advantage in key areas, including satellite technology, fighter jets and precise-guided munitions. Washington also began boosting defence tech startups in 2015 – including Shield AI, drone maker Anduril and software company Palantir – by awarding them parts of military contracts. European startups until recently languished with little government support. But an analysis by Aviation Week in May showed Europe's 19 top defence spenders – including Turkey and Ukraine – were projected to spend US$180.1bil (RM 759.57bil) this year on military procurement compared, to US$175.6bil (RM 740.59bil) for the United States. Washington's overall military spending will remain higher. Hans Christoph Atzpodien, head of Germany's security and defence sector association BDSV, said one challenge was that the military's procurement system was geared toward established suppliers and not well suited to the fast pace that new technologies require. Germany's defence ministry said in a statement it was taking steps to accelerate procurement and to better integrate startups in order to make new technologies quickly available to the Bundeswehr. Annette Lehnigk-Emden, head of the armed forces' powerful procurement agency, highlighted drones and AI as emerging fields that Germany needs to develop. "The changes they're bringing to the battlefield are as revolutionary as the introduction of the machine gun, tank, or airplane," she told Reuters. Spy cockroaches Sven Weizenegger, who heads up the Cyber Innovation hub, the Bundeswehr's innovation accelerator, said the war in Ukraine was also changing social attitudes, removing a stigma towards working in the defence sector. "Germany has developed a whole new openness towards the issue of security since the invasion," he said. Weizenegger said he was receiving 20-30 Linkedin requests a day, compared to maybe 2-3 weekly back in 2020, with ideas for defence technology to develop. Some of the ideas under development feel akin to science fiction – like Swarm Biotactics' cyborg cockroaches that are equipped with specialised miniature backpacks that enable real-time data collection via cameras for example. Electrical stimuli should allow humans to control the insects' movements remotely. The aim is for them to provide surveillance information in hostile environments – for example information about enemy positions. "Our bio-robots – based on living insects – are equipped with neural stimulation, sensors, and secure communication modules," said CEO Stefan Wilhelm. "They can be steered individually or operate autonomously in swarms. In the first half of the 20th century, German scientists pioneered many military technologies that became global standards, from ballistic missiles to jet aircraft and guided weapons. But following its defeat in World War II, Germany was demilitarised and its scientific talent was dispersed. Wernher von Braun, who invented the first ballistic missile for the Nazis, was one of hundreds of German scientists and engineers transported to the United States in the wake of World War II, where he later worked at NASA and developed the rocket that took Apollo spacecraft to the Moon. In recent decades, defence innovation has been a powerful driver of economic progress. Tech like the Internet, GPS, semiconductors and jet engines originated in military research programs before transforming civilian life. Hit by high energy prices, a slowdown in demand for its exports and competition from China, Germany's US$4.75 trillion (RM20.03 trillion) economy contracted over the last two years. Expanding military research could provide an economic fillip. "We just need to get to this mindset: a strong defense industrial base means a strong economy and innovation on steroids," said Markus Federle, managing partner at defence-focused investment firm Tholus Capital. Escaping the 'valley of death' Risk aversion among European investors had in the past disadvantaged startups, which struggled to get the capital they need to survive the 'valley of death' – the critical early stage when costs are high and sales low. But a boost in defence spending by European governments following Russia's invasion of Ukraine has investors looking for opportunities. Europe now boasts three start-ups with a unicorn valuation of more than US$1bil (RM4.22bil): Helsing, German drone maker Quantum Systems, and Portugal's Tekever, which also manufactures drones. "There's a lot of pressure now on Germany being the lead nation of the European defense," said Sven Kruck, Quantum's chief strategy officer. Germany has become Ukraine's second-biggest military backer after the United States. Orders that might once have taken years to approve now take months and European startups have had the opportunity to test their products quickly in the field, several sources said. Venture capital funding of European defence tech hit US$1bil (RM4.22bil) in 2024, up from a modest US$373mil (RM 1.57bil) in 2022, and is expected to surge even more this year. "Society has recognised that we have to defend our democracies," said Christian Saller, general partner at HV Capital, an investor in both ARX and Quantum Systems. Venture capital funding has grown faster in Germany than elsewhere, according to a data analysis by Dealroom for Reuters. German defence startups have received US$1.4bil (RM5.90bil) in the last five years from investors, followed by UK, the data shows. Jack Wang, partner at venture capital firm Project A, said many German defence startups – rooted in the country's engineering prowess – are good at integrating established components into scalable systems. "Quality of talent in Europe is extremely high, but as a whole, there's no better country, no better talent that we've seen other than in Germany," he said. Weakness in Germany's automotive industry means there is production capacity to spare, including in the Mittelstand: the small and medium-sized enterprises (SMEs) that form the backbone of Germany's economy. Stefan Thumann, CEO of Bavarian startup Donaustahl, which produces loitering munitions, said he receives three to five applications daily from workers at automotive companies. "The startups just need the brains to do the engineering and prototyping," he said. "And the German Mittelstand will be their muscles." – Reuters
