Digitalization or Digital Transformation has rapidly grown in the past couple of months. It is estimated that the current digital market which is at USD 470 Billion will grow at a rate of 16-17% CAGR and be at more than USD 100 Billion by 2025. It is very important to understand what has led to this sudden increase in its growth rate. While it was growing at a steady rate in the past couple of years, however according to studies what has led to its rise in the adoption of digital technologies is COVID 19.
The COVID-19 pandemic has led to millions of people losing their jobs. It was like a tsunami that hit global trade and investment at an unprecedented rate. Jobs were lost, businesses were shut and the stock market was at its all-time low. The entire supply and demand chain was disrupted as more and more people decided to stay at home. A study showed that in the unorganized sector, the most affected were the retail stores primarily the mom-and-pop ones.
Having all the information it becomes very important to analyze the situation and understand what opportunities cropped up during this pandemic and how companies leveraged digitization to grab hold of these new upcoming trends. Many organizations had already started to reduce their costs by optimizing techniques. A lot of the processes were automated to save on the variable cost and these companies were least hurt in their particular sectors.
- Amazon used its cloud services to pitch companies to save their costs. They leveraged their AWS revenue and increased it by 30% in the quarter ended in June 2020. AWS helped companies manage in-store inventories using technologies like Artificial Intelligence and Machine Learning during the times of COVID.
- Byjus increased its sales to become a 10$ Billion company during the times of COVID. With online classes and social distancing becoming the new norm, Byju’s took aggressive utilization of this period to become the most valuable Ed-Tech start-up in the country.
- Zoom also leveraged the new digitization normal to increase its user base by 30x times and the app has risen to the top free app in the USA. Around 300 million customers used Zoom App every month during the past few months.
- Google Pay is another app that rose to prominence in Asia during the last few months. It drastically increased its subscriber base to become a top competitor of Paytm and Phone Pe.
- Netflix is also another company that realized the significance of digitization, especially during COVID. They enhanced their algorithms using Artificial Intelligence to provide the continuously increasing customer base during the pandemic when everyone’s screen time increased being at home.
Banks have transitioned to remote sales and digital programs have been launched to make flexible arrangements for loans and mortgages. There has been more focus on data than ever before and digitization helped companies gain more insights from their customer data. There are a lot of companies who have shifted to remote working models and data shows that they have saved a lot of costs and by 2030 many organizations intend on adopting a 100% work from home model. It has become common for companies now to refocus their digital efforts towards changing customer expectations.
The opportunities in digital transformation during COVID has increased tremendously. Customers in the last few months have moved drastically towards online channels. We have seen rapid growth in funding for digital companies. Adoption of virtualization and cloud technology is the future in all sectors. This will in turn help greater and better utilization of IT resources which leads to a better return on investment. Improved cybersecurity via digitization also helps companies build customer trust and helps retain B2B customers. The main idea in these challenging times is to blend the physical world with the digital world and digitization helps in doing this.