COVID push: Indian small-town retailers going digital with business activity back to normal levels – reveals Ok Credit data

  • 16 out of 36 States and UTs witnessing business activity levels higher than pre-Covid times; Karnataka, Maharashtra, Gujarat, Andhra Pradesh, Tamilnadu & Delhi are trending at 90-95% of their pre-Covid activity levels
  • Businesses in tier 2 and tier 3 cities witnessing faster recovery than tier 1 cities
  • OkCredit witnessed double-digit recovery in business from medical and kirana stores in September 2020
  • More than 5.5 million small business owners across 2800 cities and nearby rural areas today deal in over 100 types of businesses using OkCredit to track their account receivables and payables

Business activity among the micro, small and medium enterprise sector which are regarded as the backbone of the Indian economy is fast reaching near normal levels and they are rapidly adopting digital business tools to drive efficiency and growth, reveals data gathered by OkCredit, the pioneers in digital bookkeeping apps which are fast becoming a new rage among hereto unorganized retailers and traders in India.

According to data gathered by OkCredit basis the behavior of the users, the micro retail players are increasingly taking up digital bookkeeping solutions, as it makes their book-keeping task simpler, digitized and secure and there is stronger demand coming from small towns and hinterlands.

In the unlock phase of Covid pandemic, OkCredit has witnessed strong recovery in demand for its app from tier 3 cities followed by tier 2 and tier 1 cities. OkCredit’s business from tier 3 cities witnessed 33% growth in the period of February – September 2020 while Tier 2 and Tier 1 cities registered 30% and 28% growth respectively during the same time. This is after a dip of 26%, 31% and 38% in business from tier 3, tier 2 and tier 1 cities respectively in April this year.

On a pan India basis, data among the digital bookkeeping users points to a sharp recovery with smaller businesses in tier 3 and tier 2 towns growing faster than tier 1 cities. Sixteen of thirty-six states and union territories have recovered to business activity levels that are higher than pre-Covid times. Bihar, Haryana, Assam, Rajasthan, and Himachal are the states where business activity is 10+% higher. Uttar Pradesh, Madhya Pradesh, Chhattishgarh, Odisha, Jharkhand, Uttarakhand, and Punjab are the others that are already exhibiting higher business activity. Out of the 19 states that are yet to recover, Karnataka, Maharashtra, Gujarat, Andhra Pradesh, Tamilnadu & Delhi are trending at 90–95% of their pre-Covid activity levels.  

At a business category level, different magnitude and pace of recovery was observed by OkCredit since February 2020. The company witnessed double-digit growth in business from medical and kirana stores at 21% and 15% respectively in September 2020. This was after a dip of 12% in business from medical stores and 22% from kirana stores in April this year. Both mobile recharge and electronics category registered modest growth of 5% in September 2020 after a dip in April this year.

According to Harsh Pokharna, Co-founder and CEO, OkCredit, “The best part for us today is that we are able to get a pulse of the business situation among the trader segment which have traditionally been off the radar for all other retail tracking studies, as they largely belong to the unorganized cash economy segment of the country. It is interesting to note that amid the Covid pandemic, remote towns are emerging as the torchbearers for the digitization of the MSME segment. And they are showing exciting activity and growth as the economy pushes hard for a V-curve recovery”

“We have solid proof coming from remote regions of the country where OkCredit app is being adopted like never before and is recording strong growth in transactions. These trends point to a sharp recovery from pandemic induced slowdown among businesses in tier 2 and tier 3 cities as compared to the tier 1 cities,” he added.

What has been helping OkCredit in its growth journey is its differentiated strategy which has also allowed the pioneer to maintain a lead over its follower competitors. Unlike its competitors, who are burning investors cash on marketing spends to primarily acquire downloads, OkCredit has focused on building a robust, feature rich product that improves the transparency in business transactions and facilitates a higher degree of trust among the participating individuals. This has helped, OkCredit to not only deliver better customer retention but also generate positive word of mouth through merchants who have found the platform to be simpler and easy to use leading to a strong referral triggered growth pattern. As a result of best-in-class user experience, merchants/retailers today see OkCredit as an integral part of their business. This is further validated by the fact that post-Covid recovery of OkCredit usage has mostly been organic.

Positive word of mouth by migrant population who have experienced digital tools is driving the adoption of digital bookkeeping tools among small businesses in remote towns of India. This bodes well for India’s digitally connected future and presents a big opportunity to technology service providers to further capitalize on the digital bookkeeping opportunity presented by the MSME segment. MSMEs are essential to the economy because of their huge commitment to GDP and business, and a solid and productive MSME base which can extend territorially and globally will support broader national economic stability and growth. Empowering micro and small businesses are crucial for the next stage of social and economic growth. Given the current scenario due to COVID-19, more and more consumers are looking online, it provides the potential for MSMEs to transform and build on digitisation of their businesses. This presents a strong market opportunity for pioneers like OkCredit to continue its consistent and sticky growth journey.


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