Authored by Sameer Bhatia, Head of Product, ePayLater
India’s retail sector contributes about 10% to the country’s GDP and has witnessed remarkable growth from a valuation of $450 bn in 2012 to $690 bn in 2021. Despite the notable evolution, the one factor that has remained constant - organized retail accounts for only 12% of the total market size, while the majority is still dominated by unorganized retail at 88%. These are your friendly neighbourhood kiranas, street vendors, hawkers and peddlers who sell products that are trending and on-demand, ranging from essentials, electronics, and apparel.
The pandemic-induced lockdown created a devastating impact on small-scale retailers, leading to unemployment, business shutdown and migration. On 12th May 2020, the Hon’ble Prime Minister announced the start of Atmanirbhar Bharat Abhiyan, an initiative to build India into a self-reliant economy to bounce back, along with comprehensive packages to support, allocating a budget of INR 20 lakh crores, equivalent to 10% of India’s GDP. This clarion call to the nation was crucial given that by then, India's GDP had taken a massive dip of 24.4% between April - June 2020, and the rate of unemployment in the country rose to 23.5% in April and May 2020.
The Atmanirbhar initiative gave a huge push to digitisation, thus marking another step toward building a Digital India. Today, we are a country with 600+ mn active internet users, and 100 mn users transacting online, which makes us one of the fastest digital adopters in the world, as per a recent McKinsey report. Data from the Ministry of Corporate Affairs shows that India registered 1.67 lakh new companies during FY 21-22, which is the highest so far, beating the previous year’s record of 1.55 lakhs. Adding to this, RBI’s data indicates a 98.5% rise in the total volume of digital transactions during 2020-21; a 99.3% rise in 2021-22.
Charting the path to self-recovery:
While the pandemic propelled digitization, it also kindled a shift toward online shopping which led to an enormous boom in e-commerce. Consumers preferred purchasing even their groceries online out of sheer convenience and constantly navigated between delivery apps, which left the mom-and-pop stores cornered.
Eventually, kiranas and local retailers upskilled themselves and digitized their businesses to reach a wider pool of customers. Not only did they adopt digital payments, but also offered value-added services like home delivery, and WhatsApp orders, and ensured customer satisfaction even during the toughest times. A 30-day survey conducted by Deloitte revealed that 72% of Indians were willing to shop from local stores due to the trust that kiranas had built during the pandemic.
Digitization has come with a plethora of opportunities for small businesses to self-educate and stay up to date with trends to manage their businesses better. Small-scale retail owners get adequate exposure to new products and technology that helps improve their customer service. Today, the internet is filled with case studies, reviews, and information available for business owners to access, analyse and apply to their businesses. Retail businesses have evolved beyond vanilla payment consolidation features to the point where they are on the lookout for 360-degree financial management to take care of their financial management needs.
FinTech ecosystem to the rescue:
The FinTech ecosystem has played a notable role in easing the digital journey for kiranas by providing user-friendly solutions that are more than just digital payments - be it affordable PoS devices, platforms to build online stores, digital bookkeeping features, or instant loans. FinTech companies who primarily operated as payment aggregators or capital providers have also expanded their offerings to features like online stores and cash flow management to provide a one-stop solution for retailers to manage their businesses online.
ePayLater provides an incredibly easily accessible line of credit in just a few minutes with minimal documentation. This is the first introduction to financial literacy for a vast number of people, who only further develop this through a very easy-to-use, and easy to understand user experience. The app also helps small businesses create and maintain credit history for these small businesses, which proves to be invaluable when they need to get a larger loan in the future.
ePayLater has been created specifically with the needs of small businesses in mind. With the need to have flexible working capital, ePayLater offers a line of credit of up to 25 Lakhs for up to 14 days at zero per cent interest. Another pain point ePayLater helps to address for these business owners is that the line of credit is offered without the requirement for any collateral.
By understanding the needs of small business owners and the changing trends in the industry ePayLater has strived to create an app that is optimised for small businesses, and ready to evolve to best serve their needs.