Time to hit reset and accept the new normal. Our series of in-depth stories and analysis on the changing dynamics of India’s tech landscape in a post-Covid19 world — from how industries and sectors are transforming to new opportunities, evolving consumer behaviour, the new rules of venture capital, M&A and more.
In the last decade, ecommerce has evolved to the next level. Concepts like social commerce and video commerce gained prominence in Tier 2 and Tier 3 cities, while heavyweights Flipkart and Amazon attracted users with heavy discounts on the platform.
However, the ecommerce sector is still only a fraction of the $1 Tn retail industry. But experts believe that the gap is shrinking and thanks to the coronavirus outbreak, even offline players are coming online now. For instance, Berger Paints, a leading paint company in India, has now launched a consumer application named Berger Visualizer for online shopping and selection. Also, ecommerce players like Amazon and Snapdeal are witnessing a surge in the number of signups and queries from new sellers. Amazon said that the platform has over six lakh sellers now, up from 5.5 lakh in mid-Jan.
Even when the current lockdown ends, the threat of Covid-19 is expected to linger on until a viable vaccine is made available. Many offline businesses must, therefore, be thinking about whether consumers will feel safe enough to venture out to retail spaces such as malls, markets and restaurants again. Will the fear and panic drive even tech-shy consumers online?
According to Lightbox venture partner Siddharth Talwar, all large and medium brands will have to shift to a direct-to-consumer approach enabled by digital tools and ecommerce. it could result in a larger explosion of digital platforms. He added that these brands have to rethink how their forward supply chain works as they want better control and understanding of their customer. “The only way through brands can reach to consumers is by online discovery and doorstep delivery,” he added.
“In the same manner that Domino’s took us out of restaurants, and food delivery companies ended ordering on phone calls, coronavirus is accelerating the change in behaviour patterns of how people buy essential items for everyday use,” – Siddharth Talwar.
The Time For Ecommerce 2.0
In times like these, it’s not just small and big brands, but also neighbourhood stores and kiranas that are moving online. As of now, retail stores are fulfilling the demand for groceries and staples for online platforms. These micro players are now looking at the opportunities that exist in the online space.
For Paytm’s chief Vijay Shekhar Sharma, it’s ‘ecommerce 2.0’. During an interaction with Inc42’s CEO and cofounder Vaibhav Vardhan, Sharma said, “Ecommerce 2.0 will be about stores sending products to the home.”
Sharma is hopeful that many stores will move online once the lockdown ends as people will be more concerned about their safety. He said the psychic fears which have increased in the backdrop of the coronavirus outbreak will lead this digital transformation of nearby shops.
“If they feel safe paying online, they will use digital transactions. Similarly, if they feel shopping online is safe, they’ll buy only from ecommerce stores,” – Vijay Shekhar Sharma.
The Big Consumer Migration
In 2016, demonetisation and its aftermath impacted India for close to two months. During this period, India’s fintech segment saw tremendous growth. Sharma compared that time with the current lockdown scenario and said that while it was fintech which benefitted in 2016, it’s the turn of ecommerce now.
Given the circumstances, every player is expected to come online. According to Talwar, it’s not going to be offline vs online anymore. “The real question is here that with everyone online now, can you compete in this environment?”
At the moment, the offline-to-online migration of businesses and consumers is taking precedence, and Paytm chief Sharma believes that while retail commerce was always competition for ecommerce, this will only intensify with the arrival of more retail players going online. The hope is that this healthy competition could end up benefitting the consumers in the long run, with a plethora of choice and models, just like in the fintech industry.