what covid means for start-ups
4 MINs

“Pivot is the new name of the game for all start-ups. Somewhere it is a complete pivot, and somewhere partial,” says Sanjay Mehta of 100x.vc, a newly-founded early-stage venture capital firm. So the secret to success lies in diversification and creative entrepreneurship.

Startups have been the order of the day especially among youngsters and their saviour during the past couple of years. They gave a purpose, employment and a direction to many youngsters. Start-ups were like a rainbow and then came the storm.

The resilience to withstand such a storm was not there in many established businesses let alone start-ups. State borders closed and so did international borders and the challenge for survival was steep for startups. This was another unfortunate fall out of the COVID 19 pandemic.

With the spread of the virus, consumer awareness grew about hygiene and wellbeing so consumer behaviour underwent a sea change. Ecommerce startups need to now rethink their strategies because the demand for essentials grew while niche products were temporarily set aside because not only were they not allowed to be sold they were also not in demand because Man’s survival instinct made him think of his health primarily. In such a milieu, startups have no option but to think of innovative ways to beat the challenge by shifting their focus.

What should their focus be on now?

Ecommerce startups must not just focus on the product but also on advertising who they are. Supply chains disruptions have been the main reason for the fall out during the COVID 19 due to enforced lockdown by Governments. But the challenges come not just due to disruptions in the supply chain but also in procuring the goods since most factories shut down and there may not be ongoing production. Ecommerce is thus getting more and more competitive and challenging and for the startups, these are really difficult times.
  • But the secret to success might just also lie in the company appearing frequently in online searches to stay relevant and acquire customers online.
  • This is the time to be more active and invest in SEO, Content Marketing, Pay per Click or Analytics. This will help them to attain stability which will help in the long run.
  • It’s important to understand what the customer is looking for and what he needs and provide content that meets it.
  • Analytics will help get a clear picture of customer needs and it is also important to update their websites for Ecommerce start-ups to remain relevant during COVID 19. Technical glitches must not be allowed to compromise the game because at this point even a startup needs to be at par with bigger brands to survive.

“For ecommerce, these changes only mean the need to shift marketing focus for a little while, and startups that adapt quickly to them will most likely gain more and more popularity”

Ecommerce startups are likely to be also affected by not being given priority when it comes to fulfilment so the answer to the problem lies in diversification, in opening up communication with diverse markets. If you are a startup that does not fit into the present milieu where there is a demand only for essentials it is time to think differently to survive by trying to capitalize on opportunities from changing consumer preferences. It’s time to sell designer masks for your consumers maybe!

Every problem has a solution. Every problem gives rise to an opportunity and startups must take advantage of the situation by improving upon their operations and product line to stay relevant.

Like all other industries, the ecommerce startup sector had been hoping for the curbs to be lifted but it did not happen soon enough and they suffered a lot because there were zero sales except for those selling essentials and they are new to the field. The worst part is no one knows whether this pandemic is here to stay or when this nightmare will be over.

What has hit the startups hard are salary cuts or retrenchments because people are forced to cut corners and cut costs and the startups are facing an ‘existential’ crisis with investors stepping back.

However, there has also come a cloud with a silver lining in the form of voices raised by people like Paytm’s Vijay Shekhar Sharma who have asked for a ‘robust relief package’ from the Government for startups. Besides this, the Government has stopped FDI without its permission to prevent these start-ups, many of which have a great future from being swallowed up by foreign entities.

“Pivot is the new name of the game for all start-ups. Somewhere it is a complete pivot, and somewhere partial,” says Sanjay Mehta of 100x.vc, a newly-founded early-stage venture capital firm. So the secret to success lies in diversification and creative entrepreneurship.

An example is Grofers, although it’s not a startup, they opened up a new facility in Gurgaon even during the lockdown to deliver essentials and employed a large number of people and mind you it was a warehouse with social distancing norms strictly adhered to.

Start-ups can take a cue from them by being innovative, roping in strategic partners with a minimum capital expense. Besides this, there could be the last option of start-ups merging. The bright side is that ecommerce startups have better chances of recovery post lockdown than other start-ups but as someone said “Consumption is up, but monetisation is a question”, and it all depends on how much money people have left with them to spend.

Learn more to grow more

Get curated industry knowledge delivered to your inbox every week.

Similar blogs

Have a question or comment for Eunimart?

    Want to learn more about the latest tools to supercharge your growth?

    Our omnichannel platform will give you access to 25+ marketplaces and 100+ countries.