It is now clear from the events that transpired over the past year that the country has experienced a paradigm shift in terms of customers moving online. While the digitization of India has continued for a few years now, the increasing smartphone usage, internet penetration, and the pandemic have left a lasting impact on Indian businesses. Changes are observed also in the means adopted by customers, as they aren’t shying away from online shopping. From the initial months of the lockdown, people were confined to their homes, and this has impacted the shopping choices, giving brands across industries an opportunity to leverage e-commerce portals and other models like D2C.
The government’s actions to develop home-grown solutions through the ‘Atmanirbhar Bharat’ initiative could bear fruit, as we are experiencing the making of a self-reliant economy, with an India-centric vision. This further identifies the opportunities offered by the digital space in the post-Covid era, which holds the promise of fulfilling our longstanding desire of ‘Digital India’.
Every industry that usually involves physical presence for sales had to move their operations online, and adopt methods that adhered to social distancing norms and contactless delivery. I came across several reports and surveys suggesting that almost 60% of consumers have increased the frequency with which they are purchasing online, altering shopping habits as a result. It applies largely to brands in segments like groceries, health & beauty, food deliveries etc., which capitalized on the requirements for the home delivery services.
The rise of the online entertainment segment can be attributed to the fact that public gatherings have been severely restricted everywhere. It is no surprise that several regional and national OTT platforms have come up in the entertainment segment, rivalling giants like Netflix or Amazon Prime. Even the groceries, home decor, and education segments are drawing in the money from investors and VCs, as they can see its potential beyond the pandemic, nudging users to change behavior online. While brands are riding the new growth wave brought in by the proliferation of digital, the foundational changes were made by advancements in the BFSI sector.
As a keen observer of the FinTech space, I am impressed by the speed with which remote areas have been provided access to financial services online. Digital payment solutions have evolved to a point where we are a step closer to becoming a cashless society. It is no mean feat that FinTechs are achieving this by delivering state-of-the-art technologies that ensure data security, fraud prevention, and cashless transactions. The integration of essential services, local merchants, and customers into the financial system, has transformed how money is managed. Digitization of financial markets has brought hope to rural India, as affordable brokerage and commodity trading services are helping them invest in a system that has largely kept them outside.
The success of digital payment gateways, mobile banking, and online payments in the pre-Covid years helped us prepare and orient our financial system towards contactless transactions last year. In my opinion, the rolling out of payment services by biggies like Google and Whatsapp is a testament to the burgeoning fintech ecosystem. With the right business environment and regulatory framework, we could have a tremendous opportunity at hand in becoming world leaders, and build a robust and self-reliant industry. Interestingly, the National Payments Corporation of India (NPCI) has decided to cap third parties from processing more than 30% of transactions through UPI a.la digital payment gateways, in a bid to stall any chance of monopolies taking over. In an industry that is witnessing double-digit growth, the new set of regulations that will come into force from January of 2021, will create a conducive environment for entrepreneurs and startups to flourish.
For marketers, it means that an increase in activity on OTT platforms, e-commerce portals leads to increased ad spends on digital marketing, especially performance marketing, as it provides direct tangible results. Owing to the sheer size of digital and its accelerated growth, several opportunities for digital and performance marketers will open up even more in the coming years. At the same time, the evolved state of FinTech will be a strong enabler of this increased consumer activity, further adding to the overall scale of the digital ecosystem