Covid-19 impact: Technology start-ups have multiple silver linings

When Prime Minister Narendra Modi removed his mask while speak during his televised address to the nation on April 14, the business world was gasping. India had been under a nationwide lockdown for 21 days to prevent the spread of the novel coronavirus, and that had kept economic activity across the country on hold. Like all other industries, the tech start-up sector had been hoping for the curbs to be lifted. App-based commerce businesses — from cabs to general e-commerce — had been non-operational for nearly a month.
PM Modi, however, kept the lockdown in place, extending it till May 3. But he suggested all e-commerce services might be allowed from April 20 as part of relaxations for some sectors. And then came the rude shock: Just a day before e-commerce was supposed to open, the government made a U-turn and said the status quo should be maintained.
This back-and-forth by the government, and the uncertainty of the whole situation – a novel virus that has no cure – has been a massive curveball for start-ups, and the impact is still unfolding.
Impact on the tech world
The impact has been disparate across the technology world. Online travel platforms, hotel aggregators, flight booking sites, cab-booking apps and real estate-related services have been shut since March 24. They have had zero sales, and this scenario is unlikely to change for several months.
On the other hand, digital services — from social media, to online video streaming, e-learning, news, digital payments and e-health — are all seeing a boom. But this surge might not be sustainable, say experts, as people would pull back on their discretionary spending in the near future.
The impact is also disparate across segments of e-commerce, India’s biggest start-up sub-sector, where sale of groceries and food-related essentials are permitted during the lockdown. Everything else, including electronics and mobiles, which account of for 60-70 per cent of these companies’ yearly revenues, have been shut.

A study in contrast are food-delivery apps, which have stayed afloat by convincing the authorities that folks need their favourite cuisine delivered to their homes during lockdown. However, as most restaurants stay shut, their services are also limited.