With the introduction of vaccines and cases under control, there is a new ray of hope. The SME segment in India will gain strength from the healthy moderation in the economy alongside improvement in the general business environment.
The onslaught of Corona has affected business all around the world and the Indian SMEs also faced the heat. The SME segment in India alongside micro enterprises (together they are termed as MSME) play a pivotal role in the Indian economy. As both demand and supply got hampered, SMEs have to face the double whammy. Poor cashflow and poor economic outlook further continued to impede growth in an otherwise buoyant SME sector.
However, the good sign is that post lockdown suspension, the sector showed resilience and made a comeback, underscoring its important role in the nation’s economic revival. Moreover, with the introduction of vaccines and cases under control, there is a new ray of hope which will also help in the faster restoration of the usual growth curve in the economy. The SME segment in India will gain strength from the healthy moderation in the economy alongside improvement in the general business environment.
Besides, new opportunities will emerge from the digitized business models. During the Covid times, many businesses pivoted to the WFH/ remote working model alongside digitization to ensure business continuity. As market normalization is taking place more digitization will occur. This time it will be done with a long-term strategy rather than achieving just operational resilience.
India is on a verge of an online education revolution. Already the sector received investments of around USD 700 million in 2018. However, the real shift has taken place after the Covid crisis. During March- October 2020, the emerging online Edutech sector amassed over USD 1 billion of investments.
During the same period, most of the incumbent players registered a growth in revenue up to 2.5X. Likewise, there was around a 5X surge in user volume. It is still a tip in the Iceberg, as there is huge potential for Edutech to take off in India.
The Covid times were marked by proliferation in telemedicine platforms, health & lifestyle apps, healthcare analytics ventures, etc. Besides new start-ups, regular hospitals and pharma companies are also extending their telemedicine and healthcare verticals to reach out to new customers. In the new normal, digital healthcare will continue to grow steadily.
Even though the booming digital commerce can never replace the brick-mortar business models, digital commerce is the new normal. The lockdown has seen millions of new internet users joining the bandwagon thereby giving a big push to the e-commerce business.
The grocery segment alone, which was valued at USD 1.2 billion, has seen a jump of 60-90% in sales in the first few weeks of the lockdown itself. Going forward, as customer metrics in India are evolving, the USD 1 trillion retail industry in India is set for the spurred organization. A sizable part of retail disbursal will take place through online channels. Online commerce is not just be limited to large metros but is also growing vigorously in Tier 2 & 3 cities.
Content Streaming & Media
Like other parts of the world, India is streaming more than ever. India’s OTT market alone is set to reach 500 million subscribers by 2022 with an average individual consuming 60-70 minutes of content every day. As boundaries between media, telecom, and IT is blurring at an unprecedented pace, IT& telecom companies are also focusing on developing media ecosystems and offer value-added services which will further give positive momentum to the industry.
The USD 2.5 billion Indian fintech space is poised to grow fast in the times come as increasingly banks, lending institutions, and financial organizations will strike partnership with fintech ventures. The growing fintech space in India will also get government backing, as it is believed to be a crucial lever to achieve financial inclusion.
In 2020, online payment has increased by 80%, which is a pointer in the right direction. Increased digital and mobile penetration, reduced information asymmetry alongside the emergence of new start-ups is propelling the digital payment industry in a positive direction. Besides payment, wealth management, insurance, credit disbursal, etc. are also expected to register higher growth.
The growing technological adoption which is also backed by young demographics, cheaper cost of the internet, and rise in disposable income will herald a new era in the Indian business ecosystem. As digitization is on a rise, numerous new opportunities will be unlocked across the value chain from content development & promotion to cloud-based management to analytics & data monitoring to automation, etc. This is also a positive sign for commercial leasing as the demand for new office spaces, co-working spaces, and warehouses will pick-up fast.