How Digitization Is Disrupting and Consolidating Conventional Businesses

The success of a business model depends on how the company manages to turn digitization into a competitive advantage and improve the model.

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Business in today’s environment, with ever-evolving competition, is unlikely to succeed if it does not adapt to change. We are living in an era of digitization – where all aspects of human interaction from business to leisure are shifting into the digital world. The adoption of technology in conventional business is leading to enhanced output and efficiency at a speed everyone needs to keep pace with. It is safe to say that digitization has led to a dynamic transformation of organized and unorganized sectors equally. However, the success of a business model depends on how the company manages to turn digitization into a competitive advantage and improve the model.



A paradigm shift can be observed in the unorganized sector, as the government encourages, and new companies adopt technology to interact and transact. The support offered to this mass movement to the digital space also lies in the rapid growth and availability of high-speed internet as smartphone usage grows to over 1 billion devices.

Seeing the mass acceptance of connected digital services by consumers, organizations and government, digitization has emerged as an aid of connectivity between the three. Today, nearly 80% of the startups are technology driven, out of which 50% of these startups are operating on completely digital platforms.

A lot of the entrepreneurial success stories are aimed at shifting a traditionally fragmented and unorganized market into a consolidated, easy-to-access, online model. From waste collection to phone repairs to personalized tailoring services – everything is now available in an attractive digital window.


A developing country like India has a skewed majority of business entrenched in the unorganized and labour-intensive sector. The new generation of entrepreneurs recognize this as an opportunity and are innovating and experimenting with new ways to conduct these traditional businesses. The smart device allows for reach at marginal costs and convenience at the palm of the consumer’s hand. However, though the concept remains strong, only those survive who manage to make the interface engaging enough to surpass or even be referred to the personal human interface.

Example in today's market

An interesting example of this is the insurance industry, which in its current form is driven by agents, taking the consumer through exhaustive documents that form complicated jargon leaving the insured party confused and often unsure of coverage even post-purchase. It is time that the insurance industry pivot towards an online model with policies tailored to an individual’s unique lifestyle-related risks. With the processes of purchasing insurance and applying for claims shifting online, this format makes insurance easy, relevant and accessible. Stronger digital engagement can help the industry acquire new demographics, deepen customer relationships, improve retention, and transform loyalty into advocacy. The economic efficiencies of a labour-less model can then be passed on to customers in the form of better pricing.

A vast variety of fragmented and labour-intensive industries are seeing a sea of change via digitization of their services to a convenient and more personalized interface. Yet, even if the business interface remains offline, with the uptick in e-wallets and digital payments, we see inefficiencies improved. With no minimum denominator of cashless transactions, digital payments are additionally creating an ease of operations, acting as an enabler of the micro-enterprises.

At the end

It’s clear the rise of digitization is leading towards a dynamic change in the Indian marketplace. While the usual suspects are adopting e-commerce platforms as an effective component of their online-offline strategy, what is really exciting to see is the non-conventional businesses which are also innovating to make everyday products and services structured for efficiency.