Demonetization or Coronavirus? Which one really pushed Indian Inc to become a digital business? While demonetization helped digital payment providers to onboard most of MSME businesses including our street corner kirana shops, Coronavirus has really thrown a spanner in the works of many of non-digital businesses.
First, when you look at demonetization, which was declared all of a sudden during November 2016, most of the MSME businesses were caught off guard since they were all thriving in cash economy. In India, cash was still the king then and digital payments were yet to gain momentum. It came as a blessing in disguise to many of the digital wallet/payment companies like Paytm, PhonePe, Google Pay and many more. They quickly understood the magnitude of this and partnered with almost all of the MSMEs to roll out the digital payments within couple of weeks. All of us witnessed that amazing shift when we were able to pay even our street cart vendors through digital payment modes.
But did we succeed and were we able to sustain those digital payments even after cash got into circulation again? The answer would be a big 'NO'. People started to revert to cash payments again because it was just a supply issue and they resorted back the moment they got surplus cash. But the Coronavirus pandemic triggered digital payments is one-of-a -kind because it is not due to a lack of supply but because of people becoming wary of physical interactions and turning to digital modes for their own safety. So, in a way, I would say this is a consumerled move to digital payments and it is here to stay for a long time.
Other than helping digital payments, this pandemic has helped a lot of MSMEs businesses to consider a digital channel as part of their Omnichannel reach out to their customer base. This is not just specific to one industry like retail e-commerce but it has opened the doors to almost all the industries. For instance, personally I went through a digital consultation with my doctor as part of my quarterly wellness checkup, which would not have been possible without this pandemic.
Not just healthcare sector, we are seeing a similar trend across many industries that want to build their digital presence either to do direct business or to connect with their customers. Digital business is all about digitizing business models to create new value for companies by connecting people, products and experiences. Small and micro enterprises shifted to digital sales, online aggregators/marketplaces, social media and mobile marketing aggressively to survive the slump.
Digital business is all about digitizing business models to create new value for companies by connecting people, products and experiences
For instance, whilst 29 percent SMEs transitioned to digital business before the pandemic, the pace accelerated to nearly 53 percent for small enterprises and 47 percent for micro enterprises during the pandemic. The number is only set to accelerate with the ongoing pandemic.
In a way, while you can’t change any business into a 100 percent digital one, people are made to believe that they can get things done digitally as well. So, I am very hopeful that all the industries would allocate some budget for digitizing a part of their businesses going forward, irrespective of whether we end up living with this pandemic or beat it to death. They say the proof of the pudding is in the eating and at least I am seeing this personally across our clientele where there is an unprecedented rush towards digitization.
This is here to stay. What demonetization triggered is finally getting fulfilled by this pandemic. Till today, the IT industry has braved many computer viruses in the past but this is the first time we are fighting against a real biological virus which has helped us keep our house and business clean. I want to finish this with a long live salute for coronavirus but fearing the backlash, let me say ‘long live digital.’