Best Performer In A Supporting Role
What would have happened if the ecommerce sector had not held sufficient market share as the covid-19 pandemic struck immobilising the country and the economy? Looking back at the past nine months, when the GDP contracted a record 23.9 per cent in the first quarter and followed it up by a fall of another 7.5 per cent in the second quarter and how the country dealt with the disruption, you would realise that the role of e-commerce has been very significant.
In the initial stages of the pandemic, e-commerce had provided an efficient channel to deliver and distribute essential household goods and items while maintaining the required proper social distancing norms. Due to the on-ground restrictions, sellers had to shift their business to online channels. In the same manner, e-commerce enabling companies like Shopmatic, ANS Commerce, etc. turned facilitators. Shopmatic provided services to five lakh merchants during the pandemic while ANS Commerce was able to add 30 more brands in the last few months while working with 60 brands. Because of this, sellers were able to retain their sales during the worst periods.
Throughout the year, in fact, e-commerce giants like Amazon India, Walmart India were focused on finding ways for manufacturers whose units were shut, heavily struck supply chain partners, and so on in counteracting the effects of the pandemic. Amazon India extended its global $25 million relief fund to its delivery partners who had taken a hit due to the coronavirus pandemic.
India's unemployment rate rose to 27 per cent in May from 11 per cent before the pandemic, as per Centre for Monitoring Indian Economy (CMIE). In such a scenario, e-commerce was able to provide a much-needed helping hand. "Not only did it facilitate the distribution of goods and services but also played a critical role in generating employment for small businesses, delivery boys and other displaced sections of the Indian economy," states Anand Ramanathan, Partner, Deloitte India. In July, to give an example, Amazon India conducted a skilling programme across its various warehouses in Delhi, Mumbai, Bengaluru, and Hyderabad for the roles of warehouse associates and process associates. Similar hiring programmes were conducted by other e-commerce firms.
During the festive season, e-commerce's order volume grew 56 per cent year-on-year. Moreover, heavy discount pricing and offers across all categories saw customers shopping across categories and not just confining themselves to essentials like before. Reports shared by the e-commerce firms showed a huge number of first-time buyers and many of them from Tier-2 and Tier-3 cities -- not a bad sign for the economy.
Rajneesh Kumar, Chief Corporate Affairs Officer, Flipkart Group, said, "Flipkart's purpose has been elevated this past year, as we continue to play an important role in ensuring the safe delivery of products to consumers' doorsteps through a safe and sanitised supply chain. This past year, we have strived to expand our offerings across categories to ensure our consumers are well equipped with everything that they need. We have consistently worked towards creating an ecosystem that serves consumers' growing needs and also helping Indian sellers and MSMEs access the pan-India market more effectively and efficiently."
Fintech as Facilitator
The success story of e-commerce could not have been complete without the role of fintech companies. As per a report, in 2020, 48.02 per cent of transactions in online shopping are happening through UPI, and 37.84 per cent through card. UPI adoption on the Flipkart platform increased 4.5X from January 2020 to August 2020, nationally.
Mumbai-based fintech firm Kissht, which works with more than 200 online partners, gained major traction during the pandemic. Manmeet Singh, CMO of Kissht says, "During the sale days offered by leading e-commerce players, we saw an almost 80 per cent surge in volume for shopping vouchers and credit lines from our customers. We see this as a huge pent-up demand owing to the lockdown phase that helped us and all leading ecommerce players rebound during the last three months."
For long, both e-commerce and fintech companies have faced strong competition from traditional banks and brickand- mortar stores. However, thanks to the Covid-19 outbreak, the two segments were able to break more geographical barriers and expand their reach across the country. Mandar Agashe, Founder, MD & Vice Chairman, Sarvatra Technologies says, "By providing seamless access to financial services, our company has played a critical role in the rise of e-commerce during Covid-19, especially in the rural areas. Through our UPI and IMPS switches, we are facilitating the penetration of digital payments in the hinterlands, banking on the ubiquity of smartphones in the country."
Looking back at 2020, e-commerce played a stellar role at multiple points - from supporting and helping businesses to sustain themselves to creating and providing jobs to Indian youth. Going forward, e-commerce firms, with the support of digital technology from fintech firms, are going to play a major role in aiding the recovery of India's economy in the new year.
Not only did e-commerce facilitate the distribution of goods and services but also played a critical role in generating employment for small businesses, delivery boys and other displaced sections.
