In a new report that shows the pulse of small and micro-businesses across India, OkCredit has revealed that the latest surge in infections has not been as catastrophic for SMBs as last year.
The primary reason for this moderate impact has been the absence of a national lockdown this year as compared to a harsh lockdown in March 2020 which forced several businesses to shut down.
This year, however, states have taken a more relaxed approach towards lockdowns keeping the economy in mind.
According to the study, medical stores witnessed a sharp 32 percent transaction growth this year in comparison to an 18 percent decline in the corresponding period of last year due to a sudden increase in demand for medical supplies and rapid adoption of digital bookkeeping applications by pharmacy stores. The data has been taken for the last week of March 2021 up till May 2021.
Electronics, Fruits, vegetables, and dairy were other categories to register a 5 percent uptick each in transactions. The number of customers per merchant has actually increased indicating that more and more merchants are resorting to digital bookkeeping and enrolling customers when compared to the previous wave.
At a lot of locations, the state government gave prior notice before implementing the lockdown. This gave merchants time to prepare in advance by adding customers digitally.
Kirana stores have seen a 7 percent increase in customers and so have fruit/vegetable dairy shops, mobile recharge stores, and electronics stores. The increment in the number of customers per merchant in essential services implies that a lot of customers might have stocked up goods prior to the lockdown announcement. Within the number of customers, the active customers have seen a drop of only 16 percent vis-a-vis 40 percent in 2020. Active customers in the case of groceries have increased by 6 percent when compared to the pre-covid period last year.
However, there is still a drop of 6 percent when compared to February. There could be two reasons for this decline- for one, this might be because of many customers moving to online retail and second many grocery stores are finding it difficult to procure stocks.
“While the impact has not been as disastrous as last year, the fact remains that small and micro businesses are struggling. For some of them, cashflows have been severely affected and for others, customers have moved online. Besides, the scare of the virus has ensured that a lot of them remain shut”, said Harsh Pokharna, Co-founder and CEO, OkCredit.
During the 2020 lockdown, there was a 32 percent decline in the number of transacting merchants, compared to just 9 percent this year. Categories, where this decline has been minimal, are medical stores, Kirana, hardware, electronics, repair services, and Fruit/vegetable/ dairy.