Indian Businesses Are Betting Big On Web3 and Metaverse, But Hesitancy Exists From a provider and developer perspective, India is one of the fastest-growing countries when it comes to Web3 and Metaverse. But can the same be said for India as an adopter and user?
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India, as a market for Web3 and Metaverse technologies, is one of the fastest-growing ones in the world. It is expected to touch $1.1 billion by 2023 at a CAGR of 57 per cent, according to a white paper released at the 'Entrepreneur Web3 Summit' in Bengaluru back in March 2023.
There are over 450 Web3 startups in India, including four unicorns. India is home to the third-largest Web3 pool in the world, comprising over 11 per cent of the total talent with over 20,000 active cryptocurrency and Web3 developers.
So, from a provider and developer perspective, India is one of the fastest-growing countries when it comes to Web3 and Metaverse. But can the same be said for India as an adopter and user?
According to a recent report released by PwC India Report titled "Our Take- Embracing the Metaverse", the overall engagement rate has been 90 per cent. After surveying 150 Indian businesses, 39 per cent reported believing that Metaverse will be a social platform and the company will treat it like current platforms, and 9 per cent believed that it was set to be the next incarnation of social media.
However, 24 per cent were unsure about what they took Metaverse to shape up as, whereas 8 per cent believed the vision will never be materialized.
But are 150 respondents able to reflect the country's Web3 acceptance? For Pratik Gauri, Co-Founder and CEO of 5ire, the report's hesitancy rate is unsurprising. "Given that only 1% of the global population has adopted blockchain technology, and a few people even understand the characteristics of blockchain technology and the Metaverse, the results are unsurprising. However, the response is encouraging from those with knowledge and exposure to blockchain and the Metaverse. The adoption of blockchain and web3 will be faster than that of the internet, which took 20 years. The shift will be much quicker with the economic model favouring web3 technologies."
This percentage view is bleak and pessimistic compared with the PwC 2022 US Metaverse Survey, which showed that only 5 per cent of business leaders felt that Metaverse would never materialize, and 4 per cent were unsure about it. The India report also highlighted that on being asked, 'To what extent are the following technologies embedded in your company's strategy?', respondents shared that 75 per cent, 67 per cent and 50 per cent had no plans to embed cryptocurrency, NFTs and enterprise blockchain, respectively.
"Any new technology takes its time to find acceptance, and India is a very peculiar market. The acceptance is, more often than not, exponential in nature. It might initially seem that the acceptance is quite slow. However, when the momentum catches up, it would have spread to all corners of the country even before people realize. We have seen this happen with mobile phones and digital payments… And we can expect the same to happen in the space of Web3 as well," shares Ramkumar Subramaniam, CEO and Co-founder, Guardianlink.
Meanwhile, the US report shared that 25 per cent, 24 per cent and 23 per cent of businesses had no plans or had paused their strategic plans on NFTs, mixed reality and cryptocurrency, respectively.
"Only two-fifths (consumers) call it a fad, and only a third express scepticism that a true metaverse will be achieved. This vision of optimism mixed with fear, may reflect experience with the internet, which advanced quickly — but often at a cost. For the Metaverse, it may be that the companies that will enjoy lasting success will get two things right: They'll use the Metaverse and its component technologies to create products, services and experiences that truly transform the brand-consumer relationship, and they'll act early to make sure that these initiatives inspire trust," the report also read. KPMG India, with respect to its conduction and result of a digital transformation survey from April to May 2022 across 350+ respondents, shared that among all base technologies (cloud, industry 4.0/IoT, big data) and augmented technologies (AI/ML, AR/VR/MR, blockchain, metaverse/NFTs), metaverse/NFTs maturity was at the lowest with about 35 per cent of large global enterprises lagging on implementing it.
Sharing data and analysis on 'Hype versus Reality', the KPMG report shared that cryptocurrency will take 4-6 years to mature where the present reality is that "While NFTs and cryptocurrencies are a part of the metaverse and web 3.0 ecosystem, they are not necessary; central banks are still trialling CBDCs. Hence widespread adoption is missing."
So, how can the mindset be changed among Indian businesses? "Lack of clarity on the part of the government with regard to crypto assets and NFTs is making brands choose options with limited exposure to these areas. The policy and regulatory part is still very vague. So, companies are operating in a sphere where they still have little clarity on whether crypto or any virtual digital asset (VDA) can gain transactional value or can be stored as an asset or both. This is in stark contrast to the US, where brands like Nike, NBA etc, have aggressively adopted NFT and Web3 into their ecosystem, targeting the millennials. Global brands will be the first to explore these concepts, and we will see Indian brands increasingly following suit. All that matters is this: is there a global shift towards Web3 and NFt? And, we will see quick adoption in India as well," shared Vikram Subburaj, CEO, Giottus Crypto Platform.
"So far, the signs have been quite encouraging. Looking at the startup scene, of the roughly 450 startups registered in India, Indian Web3 startups have boosted crypto adoption by racking up a 37x growth over the last two years. The explosive Web3 growth in the country is further exploded by an increasing talent pool, which surprisingly makes India's demand-supply gap the lowest when compared to the United States, China, and the United Kingdom. It is peculiar that a new platform, unknown to the public, is often the last thing to adopt or invest in. But with the right economic incentives, this will happen faster than previous innovations," shares Gauri.
"Sometimes, it is difficult for people, especially traditionally rooted business owners, to understand that technology might be able to do a few things better than certain usually followed methods. In the same way, the entire concept of metaverses and Web3 might seem a little overwhelming for businesses, and they might not be interested in displacing their current investments. However, when a lot of people get into the ring of adoption, it is quite possible that all businesses step into the Web3 revolution," adds Subramaniam.