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    How digital solutions helped India’s small merchants serve customers in lockdown

    Synopsis

    India’s small merchants embraced the changing retail trends during the pandemic.

    Retailers say digital solutions came to their rescue in the aftermath of the Covid-19 pandemic.
    For small businesses, the Covid-19 pandemic was more than just a storm in a teacup, says Karan Shah, director, Society Tea. Economic activity has since picked up, and a reading of the tea leaves, Shah reckons, portends a digital future. “Given the increased digital engagement during the pandemic, we have taken a digital-first approach, ensuring that we are present at all touch points where our consumers are,” he says.

    Society Tea, a century-old Mumbai establishment, has relied on omni channel distribution networks and social media marketing to expand its footprint in other parts of the country. “During the pandemic, we were on various e-commerce retail platforms. Customer engagement and traction on our D2C website was encouraging and we look forward to growing this,” he adds.

    Suumit Shah, founder, Dukaan, believes many small merchants reduced their reliance on third parties for delivery. “They’ve managed hyperlocal delivery by themselves. Delivery is now on their payrolls,” he says. Small vendors have also found buyers outside their local communities.

    He cites the example of a Gujarat-based shoe seller. “This seller had a turnover of Rs 86 lakh last month shipping across India. Sellers from tier-two and tier-three towns are gaining popularity because of the internet,” he explains.

    Changing times
    Samir Bhatia, who heads the fintech company SMEcorner, says the pandemic induced several positive changes that bode well for the future. “Many merchants have either set up their own websites or are selling through aggregator platforms. Digital payment is being accepted. These measures have resulted in a significant growth in operating efficiency and opened up new markets. Consumers also feel a sense of loyalty towards these merchants,” Bhatia says.

    But will small retailers be able to hold their own? KiranaKart co-founder Aadit Palicha believes they can. “Smaller merchants have the ability to cater to demand faster. They understand the local demographics better, and that leads to better stocking of products. Bigger stores are also likely to downsize to save on hefty rentals,” he says.

    Lone option
    Small enterprises were also able to tide over the crisis as they were aided by the government’s loan moratorium scheme, and the infusion of fresh funds. “Last year has been a see-saw ride for the industry. Digital lending saw an upsurge, as small merchants turned to newer fintech companies for business loans. Our lending business grew 10x last year. We are currently facilitating disbursals of around Rs 200 crore every month,” says Suhail Sameer, group president, BharatPe.

    Vedanarayanan Vedantham, who heads the SME business of Razorpay, says digitisation since the lockdown has been greater than post-demonetisation. “Overall, online transactions in 2020 grew by 80 per cent. Tier-two and tier-three towns demonstrated growth of 92 per cent growth compared to 2019.

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