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Industries accelerating amid the pandemic

IBEF, Knowledge Centre

May 28, 2021 15:00

Overview
COVID-19 and the subsequent, lockdown have dented the economy and affected various industries. As a result, many businesses are battling to stay afloat. While some industries have posted growth and are likely to continue expanding after the pandemic, others continue to struggle—hoping to bounce back once this crisis is over.

For some of these sectors, the new normal would open the door to untapped opportunities such as digital platforms and tools, remote working, etc. Let us discuss some of the opportunities being explored by start-ups and companies at large across industries:

Education (EdTech)
With shutdowns of schools, colleges and other educational institutions and regular sessions coming to a halt, online learning has emerged as the most viable platform for educators to ensure minimal impact of the pandemic on the academic progress of students.

Virtual classrooms and digital education have swiftly become the new norm (as opposed to novelty), even as traditional models are being restructured to make learning more customized, engaging and interactive. Even before the COVID-19 outbreak, the Indian online education market was forecast to grow to US$1.96 billion by 2021. EdTech got a massive boost with inflow of investments, acquisitions, upgrades in offerings and more players quickly shifting to online education and enrolling more students amid the COVID-19 crisis. Currently, there are 4,500+ active EdTech start-ups in India, of which ~435 were founded in the last 24 months.

The pandemic has only been a catalyst in expediting adoption of more efficient online processes and tools among educators and learners. With the economy normalising, disruptions and innovations that emerged as new trends will become key growth drivers for the industry in the future. The Indian online education market is now expected to grow by US$ 2.28 billion (20% CAGR) from 2021 to 2025.

Health & Wellness
COVID-19 has made people realise the importance of physical and mental well-being. This presents a big opportunity for the health and wellness sector to cement its perception as a ‘necessity’ among consumers and explore the huge growth potential. Promoting it as pivotal and much essential support method, this industry is already on a rise to becoming the one with most growth prospects in the future. Growing consumer awareness, increasing disposable incomes among the Indian middle class, a desire among the millennial population to transform their lifestyles amid increasing prevalence of lifestyle-related diseases is fuelling the demand for wellness products and solutions among Indian consumers.

The fear of immunity deficiency is making people grab any means or methods to help them stay fit and healthy. Further, several advisories published by authorities worldwide have led to unwanted publicity pertaining to the importance of physical and mental well-being. The demand for health & wellness programmes has skyrocketed, with existing players having to bite off more than they can chew. Government initiatives such as the ‘National AYUSH Mission’ were the major growth drivers for the health and wellness sector in India before COVID-19. Going forward, emphasis on initiatives such as ‘Make in India’ and ‘Start-up India’ are going to boost the sector.

SaaS & Remote Working Tools
COVID-19 has forced companies to turn to remote working for survival. This transition was reasonably smooth due to the successful implementation of SaaS & remote working tools. With remote working as the new normal, SaaS applications & remote working tools would facilitate ongoing projects and pave the roadmap for similar uptakes. These applications will act as the founding stones for most business activities and a safe harbour for the existing ones.

By 2022, Indian SaaS companies are expected to generate $18-20 billion revenue and hold a 7-9% share in the global market as they develop new technologies to fuel the next wave of growth, with powerful COVID-induced tailwinds driving collaboration and productivity tools and remote working pushing businesses to digital channels.

Corporates have realised that to maintain productivity, the right tools and policies must be in place so that employees are able to work in a flexible manner even after the pandemic. These will be the key growth drivers for the industry in the future.

E-Commerce
E-commerce is booming with lockdowns imposed in various states, and people maintaining social distancing and avoiding going to markets, grocery stores and public places. E-commerce provides a safe and distanced way to procure essential and non-essential commodities and promotes the ethos of taking precautionary measures during COVID-19.

This industry was already on a growth trajectory in tandem with the global tech revolution. But, the recent turn of events has just taken the entire game to a whole new level. People who refrained from using online websites to order utilities, services and commodities are now adapting to procuring their daily supplies through digital channels.

While most Indian consumers still depend on their neighbourhood stores for grocery, many ardent advocates of the mom-and-pop model have lately been switching to online retail platforms. Players in the space are capitalising on this trend to be an integral part of the daily grocery fulfilment value chain. Huge discounts are being offered on various items to ensure that all consumer needs are fulfilled. Given the rising demand, most players are recording a 20-80% surge in order volumes despite challenges such as order delays and cancellations. In a way, the lockdown is gradually changing the mindsets of consumers and encouraging them to switch to online retail platforms. This indicates that e-commerce will be a sunrise sector in the long term even when the COVID-19 chapter ends.

OTT Platforms & Online Gaming
Over-the-top (OTT) media and online gaming have trumped the traditional ways of entertainment during the pandemic. With shutdowns of movie theatres, gaming hubs and other recreational & amusement centres, the platforms and online gaming have boomed—becoming a major source of entertainment for viewers. In India, more than 30 platforms have mushroomed and are being watched by majority households.

Soon enough, those who were not accustomed to these channels will also become habituated as the need to head out for entertainment continues to dwindle. These have also proven to be time & cost efficient and provide a more personalized version of the same experience.

Increasing penetration of affordable broadband and smartphones, customised OTT apps with innovative pricing models, along with the sheer convenience, have only added to the popularity of OTT platforms.

Managed Office Spaces
Managed office spaces for companies, start-ups and commercial real estate is another area projected to outperform other industries post COVID-19. The current wave of the remote working culture, coupled with companies' aggressive cost-cutting efforts, has created a need for cost-effective, convenient managed office spaces.

With people unlikely to travel for work, such office spaces will be a good fit for the situation. Start-ups, SMEs and even large corporations are exploring ways to cut costs and balance budgets, rendering these spaces as the ideal solution.

The Road Ahead…
To overcome slowdown in industries brought about by COVID-19, digital uptake seemed like the obvious choice to keep sailing and tap various opportunities. Gradual shift of consumers to the new normal in their professional and personal lives has also opened new opportunities for multiple industries. The opportunities aren’t limited to just these industries, but also many others in the Indian economy. It will be important to see how these transformations play out for the current systems, infrastructure and the wider population, as the economy gradually returns to normalcy with the easing of lockdowns.

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