Demonetization has Been A Blessing for These #4 Companies' Growth in the Long Run
Businesses that warmed up to digital payments had the opportunity to tap the demonetization drive.
Demonetization slowed down most business for a brief period last year, with some sectors still reeling from its effects. As the Prime Minister voiced his vision for a ‘Digital India’ every business that warmed up to digital payments had the opportunity to tap the demonetization drive. But the larger benefit came to those who dealt in essential goods and services.
B2C startups that entail technology as their core competence, benefit the most for it, be it wallet companies or hyper-local services.As we usher in the one year anniversary of demonetization, let's see how these comapnies benefit from the drive, that not onyl helped them post the decision, but set a long-term business base for them.
The seven-year-old startup has been by far the biggest beneficiary of the policy, with cash-strapped Indians resorting to other forms of payments like wallets. Paytm among the wallets commanded the largest consumer market position and had effective tie ups with most popular billers in the country from telecom companies, ISPs, electricity boards, to even toll plazas. Suddenly, anyone and everyone was using Paytm, leading to 20 million users adopting the wallet, just between November 10 and December 20 last year.
The startup which is backed by China’s Alibaba Group, racked up over seven million transactions per day – more than the combined average daily usage of India’s 24.5 million credit cards and 661.8 million debit cards, within just two weeks of the demonetization announcement.
Of course there was criticism to insensitive advertisements, technical glitches and overload of the system. But the startup not only went on to become one of India’s biggest Unicorn ventures but put its founder, Vijay Shekhar Sharma on his maiden listing on the Forbes List for the Richest Indians, among the likes of Ambanis and Birlas.
Bangalore-based BigBasket was founded in 2009 by Abhinay Choudhari, Hari Menon, and Vipul Parekh who scaled up the venture to be the largest online grocer in India.The venture saw a 25% jump in new customer base just a month within demonetization was introduced.
The boost was mainly due to the inability of the neighbourhood-based stand-alone retailers not being prepared to accept other modes of payments, as they were very heavily dependent on cash. Consequently customers chose to make a gradual shift to ordering the essential foods online, as BigBasket made its services available to a wider market.
The startup raised $8.02mn in its latest round of funding from four of its existing investors, Abraaj Basket, Bessemer Venture Partners along with International Finance Corp and Sands Capital.The company is also planning to get involved in B2B businesses by offering meats, private labels, staples and gourmet items to various top hotels, restaurants and caterers.
Ola and Uber
Although Ola and Uber have been growing in size since they started, the demonetization drive gave passengers the extra fillip to save their cash. The immediate period post demonetization saw users surge on both platforms, the bulk of whose payments were being made digitally.
Ola also introduced its credit limit offer, wherein passengers could ride free until they billed up to Rs 750. The ride-hailing app saw a 3X increase in their usage post demonetization, with large volumes coming in from Tier II and Tier III cities where they operate.
She was generating stories out of Bengaluru for Entrepreneur India. She has worked with leading national and international business publications, including Newsweek, Business Standard, and CNBC in the past.