The COVID-19 pandemic has hit hard Consumer Internet Sector | Our Diagnosis in this space is covered in Ground Zero Series
As the economic impact of the COVID-19 crisis mounts, leaders in every industry are acting urgently to build resilience and chart out their path to business recovery. Agility and immediate action are critical, but businesses also need inputs on how the crisis is unfolding on the ground in the minds of consumer in order to better inform their next steps.
At RedSeer, through our deep understanding of consumer internet businesses, connects within the ecosystem and our in-house research expertise, we have developed “Ground Zero Stories” – the single point of reference for the consumer internet ecosystem to declutter the many aspects of consumer and it’s implications on their businesses and business strategies going forward. While we have already curated an extensive collection of consumer internet sectors and how to tackle this crisis, in the coming days and weeks, we will keep enriching this site with more updated content, webinars and case studies
What are Ground Zero Stories?
In the past couple of weeks, we were doing a series of stories around the internet space. Backed up by grounds of primary research, these stories would provide a good view of how the internet market should recover and look like in the next few months.
- USD 70 Bn India Internet fell by 90% in April 2020…
The corona pandemic resulted in the central govt. enforcing a nationwide lockdown in the final week of March 2020. Unlike China and other countries, the Indian govt. only partially allowed internet companies to operate hence significantly penalizing the sector in April.
…resulting in a diminished projected across each of the sectors
With the movement of any goods or individuals restricted, no new orders for products or requests for services could be met, leading to a huge downfall of GMV across the sectors.
- With varied impact across sectors in terms of ‘beneficiaries’ and ‘challenged’
eGrocery and EdTech enjoyed massive growth in new users (some of which were first time online shoppers), whereas, Mobility, Travel and Stay suffered the wrath of the pandemic with user activity falling to zero.
- Consumer sentiments remain weak for the purchase of discretionary products both online and offline…
Consumers expect their spending will cut down on non-essential categories owing to the savings mindset induced by the lockdown.
…impacting significantly the time spent on outdoor activities in the near future
Consumers are wary of participating in outdoor entertainment even after the lockdown opens due to the fear of contacting the COVID disease with ~65% expecting the time spent will decrease in the near future.
- However post COVID, we expect the digital story to gain strength across the board…
Even though the overall consumption went down across the sectors, online commerce is witnessing a growing user base with many first-time users who explored the channel post the onset of COVID
…with strong opportunities in ‘Bharat’ cohorts
The lockdown resulted in various first-time online users coming from the rural parts of the country as well, who explored the online channel as a medium of commerce providing an untapped opportunity for the consumer internet players to materialize.
- Overall consumer consumption sentiment shows optimism post COVID
~90% of customers believe that their spending would get to pre-crisis level in 4 months i.e. by late August 2020. Smaller cities seem more bullish on the recovery whereas the view is relatively optimistic with higher income cohorts.
- Basis these sentiments and business metrics we made forecasts around how the sectors will recover in rest of 2020
A. eHealth to witness a fast growth
B. EdTech is having a once in a lifetime growth, to see continuous traction post the crisis
C. eCommerce to have a moderate year due to supply and demand constraints
D. Foodtech, one of the worst-hit sectors due to the pandemic will take time to recover to pre-crisis levels
Ecosystem Engagement in Ground Zero stories