Covid-19 Accelerated Urgency Around Digitalization In India
Before coronavirus tore our lives apart, took our loved ones away from our lives mercilessly without giving it a second thought, digitalization was just adopted by a few companies, businesses, or people. But just like COVID came into our lives so did the concept of digitalization. Due to the virus when half of the world was facing lockdown, many companies, as well as small retail stores, had to digitalize so that they can reach the peoples who were sitting in the comfort of homes and wanted to buy because that is the only option they were left with. If they choose not to do so they might have lost their old loyal customers. Which of course no one wanted. The Indian government launched Digital India Campaign in July 2015 almost 5 years ago, with the motto ‘Power to Empower. Its main motive was to connect rural India with technology and make them tech-friendly. Somehow due to this effort, the Indian government was able to control the 1st wave of coronavirus to an extent because information, as well as guidelines, reached the remote part of India through various digital means at right time. As per the report published by UnivDatos Market Insights, the Global Digital Transformation Market including India is expected to reach the market valuation of US$ 3,693.8 billion by 2026 expanding at a reasonable CAGR of 16.06% during the forecast period (2021-2026) from US$ 1,180 billion in 2019
Rise in Active Internet Users due to digitalization
- According to a report India has an active internet user of more than 624 million as of 2021
- The number has increased by 8.2% between 2020 and 2021. This may be because be it local grocery stores or a small business everyone was forced to digitalized due to the virus.
- In terms of internet users India is ahead of United States bagging the 2nd position and ahead of India is China which has a total of 989 million active internet users by the end of 2020 which is very close to 1 billion.
- As of April 2021 4.72, billion people are using internet around the world. The more amazing fact is that 332million users have started using the internet in past one year. This clearly shows that due to corona virus not only India, but the major countries of the world have also seen a surge in internet users due to digitalization in most of the sectors.
Rise in Social Media Users
- After the rise of COVID cases around the world when everyone was stuck in their houses and unable to meet their friends and loved ones, data shows that social media came into rescue. Social media users increased by 13.7% over the past 12 months.
- In India a number of social media users increased by21% within a year.
Investments in startups during COVID
- During COVID various Indian startups got a funding of US$10.4 billion in the year 2020 in various sectors. With this India Ranks 4th globally with United Nations, China and UK standing ahead of India in terms of funding.
- But somewhere it is less if we compare it with the investments of 2019 which was almost US$14.5billion. Some experts also say that the various government schemes such as Startup India, Agni and few others helped the Investors to have confidence and faith for investing in Indian startups.
- If we talk globally, various startups raised more than US$308 billion. With U.S getting the greatest number of funding of US$165 billion which is much more than investments done in Indian startups.
- According to a report published by HxGN, ‘Zomato’ attracted more investment than any other companies with a total funding of US$1.2billion.
- The sector-wise data shows that e-commerce bagged the highest investment followed by fin-tech and ed-tech, respectively. There were many companies which bagged the unicorn status even during 1st wave of COVID last year in 2020.
- It has just been four and half months in 2020 and few Indian startups have also stablished themselves as unicorns some of them are: Digit (Insurance company), Meesho (social commerce), Pharmeasy (e-pharmacy), Grow (Stockbroking) and many more. If you see the trends all these sectors are somewhere related to COVID but how?
- Digit which is an insurance company clearly shows that people are very much concerned about their health.
- Meesho a social commerce company which targets mainly housewives shows that in this COVID everyone is searching an extra source of income.
- Pharmeasy which is a pharma company has certainly boosted its income by providing home delivery of medicines in a time when its demand is at its peak.
- Grow a stockbroking company has proved that how COVID has taught Indians the value of multiple income sources and investments.
With digitalization the giant e-commerce and tech companies have also earned a lot of profit. The offices are either empty or less office spaces are required as compared to earlier times which means less cost for maintenance and with the same cost companies can hire more people to get more work done.
Digital Payments and COVID
- Though the digital payment option came before COVID, but the industry saw an exponential growth during COVID as the physical transactions have almost crashed. Before the virus hit our lives digital payment in India was majorly used by those in the metropolitan cities.
- But with increasing demand of contact less payment, COVID acted as a catalyst for fin-tech. According to Statista Research Department 33% people said that they are using digital payment more than before.
- India saw record growth of 70% in digital transactions as compared to the time before covid-19. Out of 2.3 billion transactions, Phonepe bagged the number one position with 42.5% of the total transactions.
Rise in E-Commerce sales
- It is not only India but around the globe digitalization has taken a form of revolution. Because in U.S during February to April in the year 2020, there was a decline of 7.7% in retail and food services when compared to 2019. The scales increased till 16% for grocery stores. In Korea, according to official statistics, the e-commerce transaction saw a growth of 15.8% in 2020, compared to 2019. As compared to other commodities such as food services and household goods there was a severe decline in transactions that involved culture and leisure services. In China between April to January 2020 food products were the biggest game changer with 36% increase in sales.
Investment by Google for Digitization
- To top it all in the annual meeting of Google India, Google, and alphabet CEO Sundar Pichai announced a huge amount of US$10 billion digitization fund. It will help India to accelerate India’s digital economy. Experts say that this is a huge step towards digitalization in India which is going to attract more investors for sure.
Outlook for 2021-2022
It clearly shows that due to COVID, people do not have any choice but to move towards digitization either they like it or not. Be it a consumer or the retailer both are getting benefited from this digitization as consumers can meet their demands sitting in the comfort of their home.