Confluence of the Digital and the Traditional: Gateway for SMEs

Shailaz Nag, COO & Co-Founder, PayU India writes that the winners will be those who provide a seamless experience for the customer across both offline and online mediums.

The line between the online and ‘brick & mortar’ business models is fast blurring as India takes a leap to be in the league of developed nations. Most businesses have started realizing the need to be present in both the formats. The conventional way of buying a product offline from a store has rapidly given way to full-fledged e- stores. The Indian online industry has seen a tectonic shift in past one decade. There is no doubt that the growth has been driven by rapid adoption led by the increasing use of smartphones, tablets and speedy access to internet through broadband, 3G etc. However one of the key reasons behind it, is the ‘trust’ which has been generated through secured online payments that have encouraged more and more users to welcome the online industry with open arms in India. 

The critical element to notice about the adoption of the brick & mortar business models into the new age online avatar, is the human experience.

The experience of buying a product offline cannot be replicated by buying the same online. However the online medium can add to the ‘convenience’ and ‘ease’ of buying which in itself are major factors to lure the customers. Today’s customer has evolved. He or she is ready to pay for the convenience and ease of buying. They have started understanding the benefits of buying online. In a country where bargaining is almost synonymous with buying, heavy discounts, cashback and reward points offered online have seen a steep rise in consumers.

While there is a growing awareness on the consumer side about the online business models, the merchants are equally keen to bring their existing businesses online or start an altogether new one. Though this is not as easy it may sound to the readers. This requires a certain cost in setting up an online store, as well as lot of documentation for integrating a payment gateway to start transacting. This has slowly lead to an accumulation of large number of small merchants or SMEs which are left out as they are unable to manage the cost involved in bringing their business online. The 2012 ASSOCHAM survey titled ‘Spreading Sickness in the SME sector’ points out that payment is one pain area which is leading to a closure of around 25 percent of SMEs across various parts of the country.

PayUmoney identified this gap as we understood that SMEs form the backbone of our economy. We designed a new product altogether with such ‘brick and mortar’ merchants in mind who are unable to bear the cost of bringing their business online. The free to use payment solution PayUmoney provides 7 specially designed online tools to suit various requirements faced by the merchants. One of these tools also gives an option to the merchant to make a free web store. Interestingly the whole system requires just a PAN number and merchant’s IFSC bank code. All the tools including the free web store integrated with a state of art payment checkout option is ready to be used in just one hour. We boast of empowering over 75,000 SMEs across different parts of the country and the number is growing even while you read this.

The Indian market has already displayed immense potential which has led to some of the most known ecommerce behemoths to enter the Indian market. International investors have also taken an active role in supporting the growth of the industry as it continues to look up with each passing day. New initiatives such as Indian government’s ambitious ‘Digital India Program’ which comprises of various projects worth about 1 lakh crore to transform the country into a knowledge economy, are ensuring that the industry gets a rock solid support and a fertile ground to flourish in the time to come.

India’s overall retail opportunity is substantial, and coupled with a demographic dividend (young population, rising standards of living and upwardly mobile middle class) and rising internet penetration, strong growth in online sector is evident.

We are at a point when the dynamics of the market are fast changing globally as well as in India. The understanding and adaptability of the online market has given new opportunities for various businesses to grow rapidly.

The line between online and brick & mortar business might soon become a thing of the past, however as the world goes digital, ultimately the winners will be those who provide a seamless experience for the customer across both offline and online mediums.

Amit Shah is the Editor of CFO Insights Magazine and President, Corporate Marketing, Strategy & Communications, YES BANK