In all fairness, this transition was envisioned and already at a nascent stage. Growing access to internet along with affordable data packages and a large and growing base of digital-natives with access to low-priced yet competent handheld devices all suggested the transition was in the offing. It was expected that these factors would eventually push India towards 300-350 million online shoppers by 2025 from 100-110 million in 2020, marking an increase of around 3x over 5 years.
Retailers move online
Interestingly, this shift in consumer behaviour, helped along by the severe lockdowns, may have triggered another trend that has been equally sudden – the shift of small and medium retailers to online marketplaces.
India's retail market, which is estimated at around $850 billion, is the fourth largest globally, though largely unorganized. Until recently, the penetration of online retail stood at a shade below 3.5%.
However, a CRISIL survey, undertaken in November 2020, which sought to explore the level of change in digital activities and access of the small businesses, owing to the COVID-19 crisis, unveiled some interesting findings. It found that smaller enterprises have shown a big digital shift to shore up sales in pandemic times and the adoption of digital sales channels among micro and small enterprises (MSEs) has increased significantly since the pandemic struck.
More notably, around 60% of the respondents that had adopted digital selling channels stated that it had helped them to tide over pandemic induced stress, while the rest said it boosted sales. In general, respondents who used digital channels were more positive about their near-term business situation than those that didn't.
Interestingly, around 29% of MSEs surveyed were already using digital sales channels, such as online aggregators or marketplaces, social media, and mobile marketing, even before the pandemic struck. However, the percentage shot up to 53% among small enterprises and 47% among micro-enterprises by November 2020. CRISIL also found that despite their limitations, micro-enterprises were not very far from small enterprises in digital adoption.
Virtual Transformation of Retail
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