Augmented reality (AR) as a technology has been around for a long time and it essentially overlays the digital assets on top of physical content and real world objects. It helps to link text, audio, video, images and GPS data etc. and create a simulation. Thanks to internet revolution and penetration of smartphones, AR is now beginning to find more relevance for many business cases and this emerging technology is being adopted across many different verticals other than marketing. For the end user, AR provides a captivating, interactive and immersive experience, facilitating quicker decision making. For the business, AR brings a powerful way to increase brand awareness and engagement, along with increased ROI.
Globally, the AR market is expected to increase from $2.4 billion dollars in 2016 to $61.4 billion dollars by 2023, growing at a compound annual growth rate (CAGR) of 55.79% during this period. Closer home, Indian AR market is projected to grow at a CAGR of 55% between 2016 and 2023. In the past couple of years, the growth in Indian AR/VR market can be attributed to the increased penetration of head mounted displays (HMD) in the gaming and automotive sectors, rising demand in the healthcare sector and increase in defense spending.
Factors that click for AR in India
Augmented reality is being adopted in the digital space by today’s millennials and in a country like India where smartphone devices are proliferating rapidly, there is a huge scope for AR adoption.
With the spread of 4G network in India thanks to private players like Jio, there has been a leapfrog in the technology used to access the internet. Technological advances like smart glasses and mounted displays are widely expected to advance AR further. Cloud technologies and Internet of things have accentuated the progress of AR and is seen as the gateway for a lot of pioneering technologies.
The current smartphone user base in India is over 300 million making it the second largest smartphone market in the world. Indian smartphone market is growing at an exponential pace and the number of smartphone users is expected to reach 10 billion by 2020.
For today’s generation, mobile is becoming the preferred device for accessing the internet. The number of mobile internet users in India has crossed the 400 million mark in the current year. Mobile has become vital and people accessing the web via mobile has overtaken desktop a while ago. Major retail brands in India like Flipkart and Myntra have tried to capture this trend by adopting the app-only business model.
The offline ad industry in India is estimated to be about 6 billion dollars but measuring the engagement rate has been a challenge. Marketing campaigns executed by companies like Flippar and Adstuck have shown that the engagement rate using AR is over 85%. With the release of ARkit by Apple and ARcore by Google, we are also seeing a huge step towards the standardization of AR technologies.
With many factors that support the adoption of AR across various verticals, this technology has a huge potential to go mainstream. An effective AR strategy by companies with a focus on improvising their products and services that can satisfy the early adopters can help to take this emerging technology from its current state of uncertainty to mainstream adoption in the coming years.
Challenges for the Mushrooming of Augmented Reality
There are still several disparate frameworks and different solution providers providing services at various levels of efficiency. Add to it the uncertainty of vendors on which framework to adopt can affect the implementation of AR. There is a slew of factors that act as a deterrent for the acceptance of AR. At first, it is how AR can ease a person’s life. The other factors that influence it are cognitive and emotional inhibitors.
The inherent customer frustration and reticence in the context of adoption of any nascent technology has been validated by the several papers published on Technology Adoption Models (TAM). With several technologies proliferating the market, customers are most often forced to fall in line with adoption either due to peer pressure or management intervention. Cloud Computing, Internet of Things, Augmented Reality, SMAC stack integration, Geo Fencing, Crowd Sourcing and Social Media Monitoring are all technologies which are caught in this challenge. Mass acceptance of these technologies is slow because of the hurdles that consumers associate with each of these technologies.
In AR, the requirement for a high cognitive effort in assimilating and integrating the real and virtual views could by itself become a cognitive hurdle. With many AR apps requiring location tracking, there is the risk of the individual’s privacy being intruded upon. Other factors that can act as dissatisfiers for adoption of AR are the access to digital assets, internet dependence, end-device constraints and the distractive aspect.
For a country that is still on the cusp of the internet revolution, there is still a lot to be done to reach a point where the majority of the nation uses internet for its daily needs and this aspect is remains a deterrent for AR adoption in India.
The Reality in the Indian Market
AR is one of the fastest growing technologies in the Indian market. AR market share in India for the year 2013-2014 was estimated to be at about $20 million USD. The projected growth rate of AR in India is a CAGR of 55.7%. Based on this stat and facts presented in this article about companies adopting AR and more VC’s attracted to invest in AR, we believe that the current AR market share value in India is nothing less than $75 million USD. We expect it to grow at the same rate, if not more and become at the least a one-billion-dollar industry by the year 2023.
While India missed the desktop internet revolution, it capitalized heavily on the mobile internet revolution. On the same token we believe that while Virtual Reality (VR) has its advantages, Augmented Reality will be the more dominant force in the Indian market in the coming years. Add to this the much acclaimed convergence of AR and the other fast growing technology of Internet of Things (IoT). AR will be to IoT, what the browser was to the Internet. One could not experience the Internet without a browser. Similarly, AR will become the front end for IOT and help visualize all the BIG data generated from millions of connected devices.
Even though we feel India could take more time to wake up to the potential of AR, it is encouraging that there are many companies and startups that have opened the gates for this emerging technology and are making a meaningful contribution in taking AR to the masses. With the potential for expansion, driven by key factors like smart phone proliferation, increased usage of apps and high-quality Internet, AR is definitely the frontier technology which is sure to capture the huge market in India in the near future. AR adoption across various verticals and a huge market are bound to attract the attention of VCs, giving rise to more investments in the Indian AR space.
SMACAR Solutions is a US based start-up with operations in Chennai that aims to combine Social, Mobile, Analytics and Cloud (SMAC) with Augmented Reality (AR). We believe the world is SMAC’ed and we are here to add the visual discovery component, AR. To know more about us, and the products and services we offer, click here.