How Covid-19 Revolutionised Digital Businesses?

A lot has already been written and discussed as to why and how Covid-19 has accelerated and revolutionised digital transformation which has become an inevitable initiative for all types of organisations rather than a choice. This in turn has changed the way we live, behave, and do business and created many new-normals in our way of life. However, the discussion here is not about the impact of Covid-19 on digital transformation pre se but on digital business.

Digital Business

Before we dive into the core question this article is trying to answer, let us clear the confusion, if any, about the difference between digital businesses and digital offerings. The digital offerings are technology add-ons or extensions to existing services or products like an app for your product, a chatbot for customers to contact the support or an interface to control the product or service. Digital businesses are but the models whose businesses depend on and are driven by technology.?

Digital business models have certain characteristics that distinguish them from digital offerings. When you are checking your mobile data consumption or billing details via an app, then it is a digital offering of your internet service provider. When you order a ride via an app like Uber or Ola, then this is a digital business model.

Some characteristics that define a digital business are:

• The value proposition of the service or products is solely dependent on digital technologies. Examples are Amazon, Facebook, Google, Netflix etc.
• An ecosystem where you need to use digital channels to become a customer to use the services.
• The customer is willing to pay for the online services.

Different kinds of digital business models

Let us take a quick look at some popular models of digital business models, though not an exhaustive list.

Ad-supported Free-Model?

Most of us are part of this business model because we are most probably members of all or any of the platforms like Google, Facebook, Twitter, Linkedin, Instagram, WhatsApp etc. They are good examples of how to make use of the ad-supported, free use business model. We don’t pay to join these platforms but they use our data and our presence to make money from ads.?

Freemium Model

One of the most commonly seen digital business models where users get free access to a basic version of the product which is mostly limited in features and functionalities. If you want to use more or full features, then you have to upgrade to the paid premium version.

On-Demand Model

This is a model where the customer consumes the services as and when they require and pay for the usage. AWS, Azure cloud computing environment, OTT platforms, freelance aggregators like Upwork, Fiverr are some examples of this model.?

Marketplace Model?

The two-sided marketplace is something we are quite familiar with by now. These marketplaces are platforms to sell and buy services (Uber, Upwork, etc.) or products (eBay, Amazon, Flipkart). This is different from eCommerce which is a platform used to sell their own stocks to customers.

Amazon is one of the first and by far most successful companies to sell physical products via an online shop. This is arguably the best-known digital business model still on the web.

Ecosystem Model

Digital ecosystems are one of the most emerging digital business models at the moment. Ecosystem players are providing the customer with different services across multiple platforms. Everything or Anything As A Service (XaaS) is the term used popularly as a collective of SaaS, IaaS, PaaS etc.

Sharing Model

The sharing model allows you to pay for a product or service for a preset time without really owning it. This can be renting a car, renting an apartment (e.g., Airbnb, Oyo), or even leasing industrial machinery.

Subscription Model

Netflix or Office 365 are good examples of the subscription model. There the user gets access, updates, services, etc. on a monthly/annual basis. The subscription model is especially used for content, software, and memberships.

Open-Source Model

There are software products like Firefox which are free to download, free to use, and open for the community worldwide to contribute. The business model behind such software is generating royalties.

How certain digital businesses benefited from Covid-19?

The Covid-19 protocols like social distancing, avoidance of crowd and gathering etc. have resulted in revolutionising and accelerating digital businesses though not all. We will take a look at some of the major digital businesses in this article by segment rather than by model.?

Aggregators?

Aggregators gather suppliers of goods and services from a single industry and put them under one brand or umbrella. This model has been in existence much before Covid-19 invaded the world. However, the real utility and potentials of this model have become evident during the pandemic.?

While aggregators like Zomato, Swiggy, DoorDash in restaurant delivery, Big Basket, Grofers in grocery delivery, delivery apps like Dunzo, OTT platforms like Amazon Prime, Netflix have benefited from the pandemic situations, aggregators like Ola and Uber in ride-sharing, Airbnb, Oyo in hospitality, MakeMyTrip in travel, BookMyShow in entertainment have seen the downside.

Retail

The retail segment has undergone major transformations during the pandemic. Many brick and mortar retailers have gone online or hybrid models with more people shopping online. Customer expectation with respect to shopping has undergone tremendous changes. Those who have already been in e-tailing have seen an excellent increase in their business.?

Amazon, Flipkart can be classified either as aggregators or marketplace or e-commerce platforms. However, mom and pop or brick and mortar or kinara shops have transformed to e-tailing for their survival, particularly in metros. However, this would be the new normal for them even after the Covid-19 would come under control when the majority of the population gets vaccinated.

Entertainment

While cinema halls and multiplexes had to shut down, even if temporarily, on-demand OTT platforms have seen growth. Many OTT platforms like Netflix, Amazon Prime, Hotstar have pushed up the production of original movies, series and shows. Along with this, the release of new movies directly on their platform thereby accelerating the new onboarding of subscribers.

Cloud ecosystem

Digital ecosystems are one of the most popular digital business models at the moment. Digital ecosystem providers like Amazon Web Service (AWS), Microsoft Azure, Google etc. have been successful even before Covid-19 but their services have become a must of late.?

The transition of many companies to WFH (work from home) or hybrid working have made the digital ecosystem indispensable for employees to collaborate, communicate, develop applications, process and analyse data, provide solutions etc. remotely.????

Marketplace

Two-sided online marketplaces, different from e-commerce, is of course one of the segments that have seen revolutionary growth during Covid-19. Players like Amazon, Flipkart, eBay etc. have been growing in terms of the orders they process as also workplaces like Upwork, Fiverr, Guru etc. when companies started resorting to freelance or gig workers rather than maintaining permanent employees.?

Financial sector

One segment that has seen revolutionary transformations in the financial sector. The Covid-19 protocol has ushered in the need for contactless payments and online payments have become the normal way of making payments at least in urban areas. Fintech, as the technology related to finance is known, is about online payments, wallets, insurance, securities trading and investments, loan processing etc.?

Education

Educational institutions, particularly schools, have been online for some time now. But the tools used for online classes are digital offerings but edtech start-ups like Byju’s, Upgrade etc. have seen tremendous growth in subscription to their services during pandemics. Students who were using physical tuition centres, entrance coaching centres etc. have migrated to edtech apps.

Free-models

Free- models like Facebook, Google, Twitter, Instagram etc. have seen tremendous growth in the number of members and followers during the period when people were working from home and other socialising avenues were not available. More the members, the more money these platforms make through advertisements.???????